2000 (6) TMI 802 - AT - Central Excise

Summary

Issues Involved:
Classification of HDPE pipes and plastic parts under Central Excise Tariff Act, 1944; Applicability of Notification No. 46/94; Imposition of duty and penalty; Invocation of longer period of limitation.

Classification Issue:
The dispute centered around whether HDPE pipes and plastic parts used in sprinkler irrigation equipment should be classified under heading 8424.00 or sub-heading 3917.00. The appellants argued that the pipes were specially designed for use solely in the manufacture of the irrigation system, thus falling under heading 8424.00. The Tribunal found merit in the appellants' claim, citing previous judgments and noting the specific design and purpose of the pipes, ultimately classifying them under heading 8424.00 and granting the benefit of Notification No. 46/94.

Duty and Penalty Imposition:
The Commissioner of Central Excise had confirmed a demand of duty and imposed a personal penalty under Section 11AC of the Central Excise Act, 1944. However, the Tribunal allowed the appeal on merits, thereby rendering the point of limitation as only of academic interest. The Tribunal highlighted the various letters exchanged between the appellants and the department, where the nature of the product and its parts were disclosed, and the department's acceptance of the classification under heading 84.24. The Tribunal concluded that the demand was barred by limitation, as the facts were known to the Revenue, and the issuance of the show cause notice in 1997 reflected a change of opinion rather than any suppression of facts by the appellants.

Invocation of Longer Period of Limitation:
The department had invoked a longer period of limitation, arguing that the appellants had misclassified the product despite being informed otherwise by the Superintendent. However, the Tribunal held that the appellants were within their rights to contest the department's opinion and that the demand was indeed barred by limitation. The Tribunal emphasized that the appellants had provided detailed descriptions of their product, and the issuance of the show cause notice in 1997 indicated a change in the Revenue's opinion rather than any deliberate suppression of facts by the appellants.