2008 (1) TMI 60 - AT - Central Excise

Held that the perforated nickel screens are in the nature of accessories and not part as printing machine is complete in itself capable to carry out the desired function and is correctly falling under heading 8443.10 - sub-heading No.8443.90 covering parts of the printing machinery is not proper - assessee has given correct description of the goods in their classification list and no malafide can be attributed - invocation of longer period is not justified

Summary

Issues:
Classification of Perforated Nickel Screens under heading 8443.10 or 8443.90, Bar of limitation on demand of duty, Revenue's appeal against penalty and interest.

Classification Issue:
The dispute revolves around the classification of Perforated Nickel Screens by the assessee under heading 8443.10, whereas the Revenue classified them under Heading No. 8443.90. The screens are used for imparting designs on various materials like textile fabrics and paper. The Tribunal analyzed whether the screens should be considered parts of the printing machinery or accessories. Referring to a Supreme Court case, the Tribunal concluded that the screens are accessories, not parts, as they are interchangeable and not integral to the machine's basic function. This decision was supported by a Ministry's letter and HSN explanatory note, leading to the screens falling under heading 8443.10.

Bar of Limitation Issue:
The Tribunal found that the demand for duty was also barred by limitation. The assessee provided a correct description of the goods in their classification list, and there was no evidence of malafide intent to evade duty. The Commissioner (Appeals) had already noted the absence of malafide intention by the assessee, leading to the conclusion that the invocation of a longer period for demand was unjustified. As a result, the Tribunal set aside the demand for duty both on merit and limitation, thereby ruling in favor of the assessee.

Revenue's Appeal Issue:
The Revenue's appeal, challenging the setting aside of penalty and interest by the Commissioner (Appeals), was deemed irrelevant since the demand for duty had been set aside based on the preceding analysis. With the demand no longer standing, the appeal against penalty and interest was rejected. The Tribunal's decision favored the assessee on all counts, leading to the rejection of the Revenue's appeal.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT AHMEDABAD highlights the key issues of classification, limitation on demand, and the outcome of the Revenue's appeal, providing a thorough understanding of the legal reasoning and conclusions reached by the Tribunal.