2018 (4) TMI 286 - AT - Central Excise

Time limitation - Benefit of N/N. 8/96 dt. 23/07/1996 - DC Defibrillators - Departmental officers took the view that the goods manufactured by BPL were not eligible for the benefit of exemption notification - Held that - The issue on merits has been decided against the assessee by the Hon ble Supreme Court in the case of M/s. BPL. Limited Versus Commissioner of Central Excise, Cochin-Ii Commissionerate 2015 (5) TMI 248 - SUPREME COURT . But the Apex Court has directed the Tribunal to readjudicate the issue on limitation - The eligibility of the notification itself has been held by the Apex Court as not available to the assessee. The benefit of the notification was a contentious issue. The assessee appears to have declared only the model number of the DC Defibrillators manufactured by them and claimed the benefit of the notification. It cannot be said that the benefit was claimed by suppressing any fact. There is no positive act recorded on the part of the assessee to fraudulently claim the benefit of the notification by willful misstatement - extended period not invokable. The matter is reverted to jurisdictional Commissioner for requantification of demand within the normal time limit.

Issues Involved:
1. Classification of "DC Defibrillators" under CETH 9018.
2. Eligibility for exemption under Notification No.8/96 and Notification No.4/97.
3. Invocation of the extended period of limitation for confirming the demand.

Detailed Analysis:

1. Classification of "DC Defibrillators" under CETH 9018:
The primary dispute in this case revolved around the classification of "DC Defibrillators" manufactured by M/S. BPL Ltd. The company classified the defibrillators under CETH 9018 and claimed exemptions under relevant notifications. However, the Department disagreed with this classification and denied the benefit of the exemption notifications. The Tribunal initially had a split opinion on the classification, which was eventually resolved by a Third Member, who concluded that the defibrillators did not qualify for the exemption.

2. Eligibility for exemption under Notification No.8/96 and Notification No.4/97:
M/S. BPL Ltd. claimed exemption from duty under Notification No.8/96 and its successor Notification No.4/97, which provided a 'nil' rate of duty for "DC Defibrillators for internal use and pacemaker." The Department contended that the defibrillators manufactured by BPL were not eligible for this exemption as they were intended for external use. The Tribunal, by majority, upheld the Department's view, and this decision was affirmed by the Supreme Court, which directed the Tribunal to reconsider the issue of limitation.

3. Invocation of the extended period of limitation for confirming the demand:
The extended period of limitation was invoked by the Department on the grounds that M/S. BPL Ltd. had suppressed facts regarding the use of the defibrillators. The original adjudicating authority found that BPL had misdeclared the use of the defibrillators, leading to the invocation of the extended period. The Tribunal's Division Bench also upheld this view. However, the Supreme Court, while affirming the Tribunal's decision on the merits, noted that the law on the issue was not free from doubt, evidenced by the differing opinions within the Tribunal itself. Consequently, the Supreme Court remanded the issue of limitation back to the Tribunal for a fresh decision.

Upon rehearing, the Tribunal considered the arguments from both sides. The counsel for M/S. BPL argued that the classification declaration was made in good faith and that the issue was contentious, as evidenced by the differing views within the Tribunal. The counsel also cited various case laws supporting the contention that a contentious issue implies no suppression of facts. The Department's representative argued that BPL had indeed suppressed facts by not fully disclosing the intended use of the defibrillators.

The Tribunal, after reviewing the records and arguments, concluded that the benefit of the notification was indeed a contentious issue. The Tribunal noted that BPL had declared the model number of the defibrillators and claimed the exemption, which did not amount to suppression of facts or willful misstatement. The Tribunal also observed that the previous order of the Tribunal, which had found suppression of facts, was merged with the Supreme Court's order and thus was non-est.

The Tribunal ultimately held that there was no willful suppression by M/S. BPL Ltd. and that the extended period of limitation could not be invoked. The Tribunal decided the issue of limitation in favor of the assessee and directed the jurisdictional Commissioner to requantify the demand within the normal time limit.

Conclusion:
The Tribunal ruled that M/S. BPL Ltd. was not eligible for the exemption under the notifications in question. However, it found that the extended period of limitation could not be invoked due to the contentious nature of the issue and the absence of willful suppression. The matter was remanded to the jurisdictional Commissioner for requantification of the demand within the normal limitation period.

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