2018 (10) TMI 959 - AT - Central Excise

Classification of goods - screw hooks - These harrow hooks are called as trolley hooks and trailor hooks and they are used for tractor or trolley. - whether classified under Chapter heading 7318 of the Central Excise Tariff Act, 1985 or under Chapter heading 843290 of the Tariff? - Held that - As the classification of the impugned goods in the case of M/s PNA Agro Industries vide adjudication order no. 68/CE/ADC/YM/PKL/2016-2017 dated 13.01.2017 has been accepted by the Revenue, therefore, different treatment cannot be given to the appellant - correct classification of the harrow hooks manufactured by the appellant is classifiable under chapter sub heading 843290 of the tariff, on which, no duty is payable by the appellant therefore, the entire demand of duty is set aside. As there is no duty payable by the appellant, the seized goods are not liable for confiscation - confiscation and penalty also set aside. Extended period of limitation - Held that - The entire demand has been raised against the appellant by invoking extended period of limitation. As Revenue itself is having two different views, in that circumstance, the extended period of limitation is also not invokable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of goods under Chapter Heading 7318 of Central Excise Tariff Act, demand of duty, confiscation of seized goods, redemption fine, and penalty imposition.

Analysis:
The appellants appealed against the orders classifying their goods under Chapter Heading 7318 of the Central Excise Tariff Act, demanding duty, and imposing penalties and confiscation of seized goods. The Revenue alleged that the appellants were manufacturing screw hooks without paying duty, leading to a search of their factory and seizure of goods. The show cause notice was issued based on investigation results, classifying the goods under Chapter Heading 7318, demanding duty with interest, and imposing penalties and confiscation. The adjudication confirmed the classification, demanding duty, confiscating seized goods, and imposing penalties. The appellants contested, arguing that their goods should be classified under Chapter Heading 843290, citing a similar case accepted by the department. They contended that the Revenue cannot classify the same product under two different heads, supported by a High Court case.

The Tribunal found that both the appellants and another company were manufacturing harrow hooks used for tractors or trolleys, which were part of threshers and trolley harrow hooks. The adjudication in the other company's case concluded that harrow hooks fall under Chapter Heading 843290, attracting nil duty. Since the department accepted this classification, the Tribunal held that the appellants' goods should also be classified under Chapter Sub-heading 843290, with no duty payable. Consequently, the demand for duty was set aside, and the seized goods were not liable for confiscation. The penalties imposed on the appellants were also revoked due to no duty liability. Additionally, as the Revenue had conflicting views, the extended period of limitation was deemed inapplicable. Therefore, the impugned order was set aside, and the appeals were allowed with any consequential relief.