9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (12) TMI 989 - HC - Central ExciseExtended period of limitation - suppression, misstatement or misdeclaration - clasification of yarn manufactured by assesse - Chapter sub-heading No. 54.02 or Chapter 56 - Held that - In the light of the facts noted it is apparent that the assessee, initially, was classifying the goods under Chapter sub-heading No. 54.02. However, upon noticing that the Customs authorities were clearing such yarn under Chapter 56, the assessee, sought clarification in this regard was advised that the yarn manufactured by it merits classification under Chapter No. 56 of the Tariff Act. Accordingly, the assessee, after giving intimation to the department, started effecting clearances under Chapter 5606.06 of the Tariff Act. In the light of the aforesaid facts it cannot be said that there was any suppression, misstatement or misdeclaration on the part of the assessee. It is not in dispute that the Customs authorities were clearing such goods under Chapter 56 of the Tariff Act. The assessee, therefore, was entitled to entertain a bona fide belief that the product manufactured by it would fall under the said sub-heading. It is not possible to state that the Tribunal has committed any legal error in holding that the extended period of limitation could not have been invoked. In favour of assessee.
Issues:
1. Invocation of extended period of limitation under the Central Excise Act, 1944. 2. Classification of goods under the Central Excise Tariff Act, 1985. 3. Imposition of penalties under Section 11AC of the Central Excise Act, 1944 and Rule 209A of the Central Excise Rules, 1944. Analysis: Issue 1: Invocation of extended period of limitation under the Central Excise Act, 1944 The appellant challenged the order dated 29 May, 2009, made by the Tribunal, questioning the justification of invoking the extended period of limitation. The Tribunal found that the appellant did not mis-declare the description or manufacturing process, and the Customs House had assessed similar yarn under a different heading. The Tribunal concluded that the extended period should not have been invoked, limiting the demand to within one year. The Tribunal's decision was based on factual findings and upheld that the extended period of limitation was not justified. Issue 2: Classification of goods under the Central Excise Tariff Act, 1985 The appellant, engaged in manufacturing polyester and nylon covered yarn, faced allegations of misclassification under Chapter sub-heading No. 5606.06 instead of 5402.62/61. The Tribunal upheld the Commissioner's order on the classification of the product but set aside the demand beyond the limitation period. The appellant, upon noticing different classification by Customs, sought clarification and started clearing goods under a new sub-heading. The Tribunal found no suppression, misstatement, or misdeclaration by the appellant, justifying the classification change. Issue 3: Imposition of penalties under Section 11AC of the Central Excise Act, 1944 and Rule 209A of the Central Excise Rules, 1944 Separate penalties were imposed on the appellant and the Director, challenging the penalties before the Tribunal. The Tribunal set aside the penalties, citing the lack of justification for invoking the extended period of limitation. The Tribunal remanded the matter to reconsider the duty payable, emphasizing the correct classification of products. The Tribunal's decision was based on the absence of misdeclaration and upheld that penalties were not sustainable due to the unjustified invocation of the extended period. In conclusion, the High Court dismissed the appeals, affirming the Tribunal's decision that no legal error was committed in not invoking the extended period of limitation. The judgment focused on factual findings regarding misdeclaration, classification, and penalties, emphasizing the absence of justification for extending the limitation period.
|
