2013 (12) TMI 811 - AT - Central Excise

Classification of Goods - Parts of television sets to be classifiable as parts of television sets falling under tariff heading 85.29 or they have to be treated as clearance of complete television sets falling under tariff heading 85.28 Held that - Following Salora International Ltd. vs. CCE New Delhi 2012 (9) TMI 276 - SUPREME COURT - as various parts of television sets were being assembled as television in the assessee s factory and the same were thoroughly checked and it is only upon being satisfied that television receiver are complete in all respects they were subsequently dis-assembled along with relevant material and individual serial numbers the same were sent to various units. Entitlement for Benefit of Notification No. 6/82 - Different rates of duty depending upon the different categories of television sets Imposition of Personal Penalty u/s 11AC Held that - Assessee contended that there was no malafide or mensrea attributable to the assessee so as to impose penalty under Section 11AC the issues are required to be re-examined by the original adjudicating authority the matter remanded back to the commissioner for assessing the duty liability Decided partly in favour of Assessee.

Summary

Issues involved: Classification of parts of television sets under tariff headings 85.29 or 85.28; applicability of Supreme Court decision in Salora International case; duty liability under notification No. 6/82-CE; imposition of personal penalty under Section 11AC.

Analysis:

1. Classification of Parts of Television Sets: The main issue in this judgment revolves around the classification of parts of television sets manufactured by the appellants. The dispute is whether these parts should be classified under tariff heading 85.29 as parts of television sets or under tariff heading 85.28 as complete television sets. The Supreme Court in the Salora International case held that if the parts were assembled into complete television sets in the assessee's factory, thoroughly checked, and then disassembled with individual serial numbers before being sent out, they should be classified as complete television sets.

2. Applicability of Supreme Court Decision: The judgment extensively discusses the applicability of the Supreme Court decision in the Salora International case to the appeals at hand. The Senior advocate for the appellant argued that the facts of the Salora International case were peculiar and should not be applied universally. However, the Court emphasized that the decision was based on the unique facts of that case, where the television receivers were assembled, operated, and checked thoroughly before disassembly and distribution. The Court stressed that once the manufacturing process of assembling complete television sets was completed, subsequent actions were irrelevant for classification purposes.

3. Duty Liability and Penalty Imposition: The judgment also delves into other issues such as the correct application of duty rates under notification No. 6/82-CE, which depended on the size and MRP of the television sets. Additionally, the imposition of a personal penalty under Section 11AC was challenged by the appellant, arguing that the dispute with the Revenue had been ongoing since 1990 without any malafide intent. The Court acknowledged these issues and remanded the matters to the original adjudicating authority for re-examination in light of the Supreme Court's decision in the Salora International case.

4. Remand and Time-Bound Adjudication: The Court ultimately set aside the impugned order in the case of Salora International and remanded the matter to the Commissioner for fresh assessment of the appellant's duty liability. The same remand was applied to other appellants as well, with a directive for a time-bound adjudication within three months. The judgment highlighted that the remand was solely based on the Supreme Court's decision without expressing any opinion on the merits of the case, allowing the parties to raise any additional issues during the re-examination process.

In conclusion, the judgment extensively analyzes the classification of parts of television sets, the applicability of the Supreme Court's decision in the Salora International case, duty liability under specific notifications, and the imposition of personal penalties. The Court's decision to remand the matters for fresh assessment while emphasizing a time-bound adjudication reflects a thorough and detailed approach to resolving the legal issues at hand.