2014 (6) TMI 818 - AT - Central Excise

Classification of goods - Refined Palm Stearin - Classification under heading 1511 90 or under heading 3823 11 - extended period of limitation - Held that - The appellant claims to have had believed during the period of dispute that their product was classifiable under heading 1511 and, hence, they cleared the goods by claiming the benefit of the relevant exemption notification. It further appears from the submissions of both sides that this Bench, in two recent stay orders, granted waiver and stay in favour of similar manufacturers of refined palm stearin , having found prima facie case on the ground of time-bar - there was no clearance of the goods during the period from April 2011 to March 2012 and that the impugned demand is practically for the period from September 2008 to March 2011, which is apparently beyond the normal period of limitation, the show-cause notice having been issued as late as on 31.5.2012. - stay granted.

Summary

Issues: Classification dispute, Time-barred demand

Classification Dispute Analysis:
The judgment revolves around a classification dispute concerning the product "Refined Palm Stearin." The assessee classified the product under heading 1511 90, while the Revenue classified it under heading 3823 11 of the Central Excise Tariff Schedule. The impugned duty demand for the period September 2008 to March 2012 was based on the Revenue's classification. The Hon'ble Supreme Court's decision in the case of Commissioner vs. JOCIL Ltd. established that the product is classifiable only under heading 3823 11. The appellant argued a prima facie case on the ground of limitation, citing a Circular of CBEC in 2002 that classified the goods under heading 1511, withdrawn only in 2011 due to the Supreme Court's judgment. Notably, a previous decision by the Bench in 2009 classified the item under heading 1511, leading the appellant to believe their product fell under the same category during the disputed period. The Tribunal considered recent stay orders favoring similar manufacturers, indicating a prima facie case on the ground of time-bar, ultimately holding the entire demand as time-barred, thereby waiving the pre-deposit requirement and staying the recovery.

Time-barred Demand Analysis:
The Tribunal noted that there was no clearance of goods from April 2011 to March 2012, making the impugned demand practically applicable for the period from September 2008 to March 2011. This duration exceeded the normal period of limitation, with the show-cause notice issued as late as May 31, 2012. Considering these circumstances, the Tribunal decided to follow a specific stay order from 2013 and held that prima facie the entire demand was time-barred. Consequently, no pre-deposit was required, and recovery was stayed, ensuring relief for the appellant in this classification dispute case.