2018 (11) TMI 1751 - AT - Central Excise

Time limitation - no suppression of fact - HELD THAT - The ld. Commissioner (Appeals) has held that the adjudicating authority has erred in holding that there was suppression of fact by the appellant. In this case, the show cause notice is issued for the impugned period on 17.1.2018 - the Commissioner (Appeals) has rightly held that in this case the description indicated in the ER-1 filed by the respondent is clear enough and makes it very clear that the said product is a pipe which is manufactured by using the HDPE raw material and, therefore, the true nature and type of the product has been informed to the department. There is no error committed by the ld. Commissioner (Appeals) in the impugned order - Appeal dismissed - decided against Revenue.

Summary

Issues:
Classification of goods under Central Excise Tariff Act, 1985; Suppression of facts leading to time-barred demand.

Classification of Goods Issue:
The case involved the classification of goods manufactured by the appellant under Chapter Heading No. 73 & 85 of the Central Excise Tariff Act, 1985. The dispute arose when the Revenue contended that the goods, PLB HDPE duct, were wrongly classified under Heading No. 85176990, which led to a demand for differential duty. The Revenue argued that the product should be classified under 39172110 as tubes of polyethylene, used for laying Optical Fiber Cables (OFC) underground. The lower adjudicating authority confirmed the demand and penalty after due process.

Suppression of Facts Issue:
The Revenue alleged suppression of facts on the part of the respondent, stating that the ER-1 return filed did not clearly indicate the correct classification of the manufactured product. The Revenue claimed that during an audit and subsequent investigation, it became evident that there was suppression of fact. On the other hand, the respondent argued that they had correctly indicated the nature of the goods in their ER-1 returns and that the Revenue did not contest the classification earlier. The respondent contended that since there was no suppression of fact, the demand was time-barred.

Judgment Analysis:
The Tribunal analyzed the case and found that the Commissioner (Appeals) correctly set aside the order of the lower adjudicating authority. The Tribunal agreed with the Commissioner that the description provided in the ER-1 returns by the respondent was clear enough to indicate the true nature of the product being manufactured. The Tribunal cited relevant case laws to support this conclusion, emphasizing that the department was informed about the product's true nature through the returns. Therefore, the Tribunal held that there was no error in the decision of the Commissioner (Appeals) and rejected the appeal filed by the Revenue.

This judgment clarifies the importance of accurate classification of goods under the Central Excise Tariff Act and highlights the significance of providing clear information in statutory returns to avoid disputes regarding suppression of facts and time-barred demands. The reliance on established case laws further strengthens the decision, emphasizing the duty of the department to carefully review the information provided by taxpayers and act accordingly.