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2013 (3) TMI 342 - AT - Central ExciseDuty demand in respect of Brass Brazing Granules - clandestine removal - classifiable under 7403.21 OR 7419.99 - Commissioner (Appeals) dropped the duty demand confirmed against assessee - Held that - The Brass Brazing Granules, in question, are made by pouring molten brass in cold water. These pallets/granules are used for the purpose of brazing and welding. Thus the term of article would cover the items made by working on a metal. The goods, in question, are of in the nature of unwrought metal. Heading 7403.21 covers copper zinc base alloys (brass) . Though the goods, in question, are used for soldering and brazing, they are not classifiable under 7406 as the same are not in form of powder or flakes. Therefore, the Brass Brazing Granules/pallets would be correctly classifiable under 7403.21 and since they are other than the items specified in the SSI exemption notification, the same would not be available to them. The impugned order classifying the Brass Brazing Granules under sub-heading 7419.99 is, therefore, not correct. Since, in this case, the respondent, though manufacturing dutiable items not eligible for SSI exemption, had neither obtained Central Excise registration nor were paying any duty nor had intimated to the department about their activity, thus the extended period under proviso to Section 11A(1) would be available to the department for recovery of duty. Therefore, the impugned order setting aside the duty demand and penalty on the respondent is, not correct. The same is set aside and in this regard the order passed by the original Adjudicating Authority is restored. The Revenue s appeal is allowed. Against assessee.
Issues:
Classification of Brass Brazing Granules under Central Excise duty exemption notification. Analysis: The case involved a Proprietorship firm manufacturing Brass Brazing Granules and brass ingots. The firm claimed full exemption from Central Excise duty under Notification No. 8/98-C.E. and its successor notifications. However, after an inquiry in August 2001, it was determined that the goods manufactured were correctly classifiable under sub-heading 7403.21 as Copper Zinc Base Alloys (brass), not covered by the Small Scale Industry (SSI) exemption. A show cause notice was issued for duty demand, interest, and penalties. The Joint Commissioner confirmed the duty demand and imposed penalties. The Commissioner (Appeals) upheld the duty demand for brass ingots but dropped the demand for Brass Brazing Granules, classifying them as "other articles of copper" under sub-heading 7419.99 and eligible for SSI exemption. The Revenue appealed against dropping the duty demand for Brass Brazing Granules, arguing that they should be classified under sub-heading 7403.21 as unwrought copper alloys. The Respondent defended the classification under sub-heading 7419.99, stating that the granules are ready-to-use articles for jointing metals. The Tribunal considered the submissions and examined the nature of the Brass Brazing Granules, which are made by pouring molten brass in cold water for brazing and welding purposes. The Tribunal concluded that the granules, being in the nature of unwrought metal, should be classified under 7403.21 as copper zinc base alloys (brass), not under 7419.99. Since the granules were not covered by the SSI exemption, the duty demand was upheld. The Tribunal also noted the firm's failure to obtain Central Excise registration or pay duty, allowing the extended recovery period under Section 11A(1) for duty collection. Consequently, the impugned order was set aside, and the original Adjudicating Authority's decision was restored. The Revenue's appeal was allowed, and the cross objection by the Respondent was disposed of. In conclusion, the Tribunal's judgment clarified the correct classification of Brass Brazing Granules for Central Excise duty purposes, emphasizing their nature as unwrought metal under sub-heading 7403.21. The decision highlighted the importance of complying with registration and duty payment requirements, allowing for extended recovery periods in cases of non-compliance.
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