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2018 (6) TMI 983 - AT - Central ExciseTime limitation - Classification of goods - Bottom Oil - The case of the department is that subject goods-Bottom Oil is correctly classifiable under Chapter heading 2710 whereas the claim of the respondent is that it is classifiable under Chapter heading 2709, which attracted Nil rate of duty - Held that - The appellant right from the stage of making application for registration i.e. on 14.7.2006, declared the inputs manufacturing process and final product including the bottom oil. Therefore, the entire process of manufacturing of bottom oil, the facts thereof were in the domain of the department. The appellant have been filing the ER-1 monthly returns wherein the bottom oil was declared to be classified under Chapter heading 2709 under Nil rate of duty. Therefore, all the details for issuing the show-cause notice were available with the Revenue. If Revenue was of the opinion that the classification was wrongly declared, it should have been issued well within the normal period of one year - demand is clearly time barred. Since the demand is time barred, the other issue on merit are not addressed. Appeal dismissed.
Issues: Classification of Bottom Oil under Chapter heading 2710 or 2709, Time Bar for Demand
Classification Issue Analysis: The case revolves around the classification of Bottom Oil manufactured by the appellant. The Revenue argues that Bottom Oil falls under Tariff heading 2710 and is liable for excise duty as it is manufactured from petroleum oil obtained from bituminous minerals. On the contrary, the appellant contends that Bottom Oil is unreacted from the input i.e., crude oil, and should be classified under Chapter heading 2709, attracting a Nil rate of duty. The Commissioner, after considering various factors, classified Bottom Oil under heading 2709. The appellant maintained transparency by declaring details from raw material stage to final product classification in their application for Central Excise Registration in 2006. The ER-1 monthly returns also consistently classified Bottom Oil under Chapter heading 2709. The Tribunal found no suppression of facts by the appellant and agreed with the Commissioner's classification, ultimately dismissing the Revenue's appeal on this issue. Time Bar Issue Analysis: The second crucial issue is the time bar for the demand raised by the Revenue. The show-cause notice was issued on 28.4.2009 for the period 2006-07, invoking the extended period. However, the appellant had applied for Central Excise Registration on 14.7.2006, disclosing all relevant details including the classification of Bottom Oil under Chapter heading 2709. The ER-1 returns further reiterated this classification. The Tribunal noted that all necessary information for issuing the show-cause notice was available with the Revenue well within the normal period of one year. As there was no suppression or mis-declaration by the appellant, the demand on Bottom Oil was rightly dropped on the ground of time bar. The Tribunal upheld the Commissioner's decision on the limitation issue, leading to the dismissal of the Revenue's appeal solely on this ground. In conclusion, the Tribunal dismissed the appeal on the basis of the demand being time-barred, without delving into the merit of the classification issue. The judgment highlights the importance of transparency and timely action in tax matters, emphasizing the significance of accurate disclosure by taxpayers and adherence to statutory timelines by tax authorities.
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