2011 (1) TMI 979 - AT - Central Excise

Classification - steel tables - Show Cause Notice was issued by invoking extended period demanding duty after classifying the steel tables under chapter 73 of the Tariff and subsequently when it was found that the appropriate classification under chapter 94 of the Tariff corrigendum to the Show Cause Notice was issued - Held that - As the present respondent had not filed any declaration or classification list claiming the classification of goods under chapter 73 of the Tariff. It is only the opinion of the Revenue in the first Show Cause Notice that the goods were classifiable under chapter 73 which were subsequently corrected by issuing a corrigendum. Therefore no merit in the contention of the present respondent that the classification under corrigendum is prospective in nature. The findings of the Commissioner(Appeals) in this regard are not sustainable hence set aside. Merit in the contention of the Revenue that the steel tables supplied to the education department are rightly classifiable under chapter 94 of the Tariff. The findings of the Commissioner(Appeals) in this regard are not sustainable hence set aside. Appellant has produced evidence regarding purchase of the items in question from other units and in respect of payments made to the suppliers. The Commissioner(Appeals) further held that proprietors of M/s.Dulax Steel and M/s.Radha Steel are relations of the present respondent but there is no mutuality of interest and flow back of consideration to the respondents is established. In the present appeal also this finding regarding mutuality of interest is not under challenge. Revenue is only relying upon the letter written to the education department. In absence of any other evidence no infirmity in the impugned order in this regard. If the clearance of bought out items are excluded from the clearance from the respondents regarding manufactured goods the respondents are well within the S.S.I. exemption therefore no infirmity in the impugned order in this regard. Appeal is disposed of as indicated above.

Summary

Issues:
1. Validity of corrigendum to Show Cause Notice
2. Classification of steel tables under Central Excise Tariff
3. Procurement of steel tables from the market

Analysis:
1. The first issue revolves around the validity of the corrigendum to the Show Cause Notice. The Revenue contended that the corrigendum was issued after realizing the appropriate classification under the Central Excise Tariff. The Respondent argued that the corrigendum cannot be issued after the reply has been filed and that the classification claimed by the Revenue is prospective. The Tribunal found that the corrigendum was valid as it corrected the initial classification of the goods. The Tribunal distinguished this case from precedent cases, concluding that the classification claimed under the corrigendum should be considered, setting aside the Commissioner(Appeals) findings in favor of the Respondent.

2. The second issue pertains to the classification of steel tables under the Central Excise Tariff. The Revenue argued that the tables supplied to the education department should be classified under chapter 94 of the Tariff, as they are not household articles but furniture for educational institutions. The Tribunal agreed with the Revenue, finding merit in their contention that the tables fall under chapter 94, specifically sub-heading 9403, as they are meant for use in schools. Consequently, the Tribunal set aside the Commissioner(Appeals) decision in favor of the Respondent.

3. The final issue concerns the procurement of steel tables from the market. The Revenue claimed that the Respondent cannot deny manufacturing the tables as they had previously informed the education department that all tables were produced by them. The Respondent provided evidence of purchasing tables from other units, supported by relevant invoices. The Tribunal noted the evidence presented by the Respondent regarding the procurement of items from other units and payments made to suppliers. The Tribunal upheld the Commissioner(Appeals) findings that there was no mutuality of interest between the Respondent and the other units, concluding that if the clearance of bought-out items is excluded, the Respondent falls within the S.S.I. exemption. Consequently, the Tribunal found no fault in the impugned order regarding this issue, disposing of the appeal accordingly.