2018 (5) TMI 1200 - AT - Central Excise

Classification of goods - trims for refrigerators - whether classifiable under CTH 39 as plastic articles or under heading 8418 as parts of refrigerators - Held that - the appellant has originally claimed under Chapter 39 and suddenly, reverse the stand and now claiming under heading 8418 by average rate of duty which is not permissible in law - It is a case of blow hot blow cold - appeal dismissed - decided against appellant.

Summary

Issues: Classification of refrigerator parts under CH 39 or CH 8418, Mis-declaration in ER-1 returns, Change in classification by the appellant, Limitation period for raising demand

Classification Issue:
The appellant, engaged in manufacturing refrigerator parts, disputed the classification of certain parts as plastic articles under CH 39 or parts of refrigerators under CH 8418. The original authority classified the parts under CH 8418, which was upheld by the Commissioner in the order-in-appeal. The appellant's change in classification led to a show cause notice, questioning their entitlement to exemption under Notification No. 4/2014. The Commissioner noted that the appellant's ER-1 returns declared PVC Profiles under CH 39162019 and PVC Gasket & Trims for Refrigerators under CH 84189900, making it difficult to ascertain the actual classification. The Commissioner found the appellant's mis-declaration intentional to evade duty, as they had previously succeeded in classifying the goods under CH 39. The Tribunal agreed with the Commissioner's observations, emphasizing the appellant's inconsistent stance and dismissed the appeal.

Mis-declaration Issue:
The mis-declaration in the appellant's ER-1 returns, where both types of items were declared as PVC goods under different headings, raised suspicion. The Commissioner highlighted that the appellant should have provided accurate information, especially after winning a previous case on classification. The mis-declaration was seen as an attempt to evade duty, as the department could not clearly classify the goods based on the information provided. The Tribunal supported the Commissioner's findings, emphasizing the importance of accurate declarations to avoid confusion and duty evasion.

Change in Classification Issue:
The appellant's change in classification from CH 39 to CH 8418 after enjoying the former classification led to scrutiny. The Tribunal noted that the appellant's reversal in stance and claim under a different heading with an average rate of duty was not permissible in law. The Tribunal viewed this change as inconsistent and agreed with the Commissioner's assessment regarding the limitation period for raising the demand. The Tribunal upheld the Commissioner's decision based on the peculiar circumstances of the case and the appellant's actions.

Limitation Period Issue:
The Commissioner observed that the demand raised for a specific period fell within the extended period, with a show cause notice issued almost two years after the appellant changed the classification. The Tribunal agreed with the Commissioner's reasoning on the limitation, sustaining the decision along with the provided justifications. The dismissal of the appeal was based on the agreement with the Commissioner's findings on the limitation period and the appellant's classification inconsistency.