2019 (7) TMI 198 - AT - Central Excise

Classification of goods - PVC Suction Pipes, PVC Krishi Pipes, PVC Water Hose Pipe, PVC Water Stop, Rubber Hose and Rubber Sheet - whether classified under chapter 3917 or otherwise? - extended period of limitation - HELD THAT - The products in question are PVC Krishi Pipes of the burst pressure of 1.0 Mpa, PVC suction pipes of burst pressure of 1.5 Mpa and PVC Garden Pipe of 0.7 Mpa. Thus the products have the pressure of much less than 27.6 Mpa as is minimum required under chapter 3917.31. This particular observation is sufficient for us to hold that the product cannot be classified under section 3917.31. Thus, the products being one or the other kind of pipe that have been classified under section 39 in the category of 3917.39. All flexible or non-flexible tubes, pipes and hoses are excisable goods even if they are classified under chapter heading 3917.31 having work pressure of more than 27.6 Mpa and are also excisable and the duty of 16% is to be levied as per Central Excise Act. These observations coupled with the admission of the appellant that the product is classifiable are sufficient for us to hold that except for the burst pressure criteria, any pipe, tube or hose is excisable goods. The burst pressure of appellant s product is admittedly less than 27.6 Mpa as is minimum required to claim exemption. None of the grounds of the appellant assessee as mentioned above affect the said excisability. Resultantly, we do not find any infirmity in the order denying the classification of the impugned goods under 3917.31 and holding it as a product classifiable under 3917.39 i.e. the hollow pipes which do not find any other classification in the said chapter, the demand confirmed is, therefore, sustainable. Extended period of limitation - Penalty - HELD THAT - Since the appellant is found to have wrongly classified his product to such a category to which no duty is leviable, the goods are otherwise excisable, the act is held as wilful intention to evade the duty - The said act of the appellant is definitely an act of misrepresentation of the facts - adjudicating authority was right to invoke the extended period of limitation and the penalties are also held to have been rightly imposed. Appeal dismissed.

Summary

Issues: Classification of goods under Central Excise Tariff Act, 1985; Invocation of extended period and imposition of penalty

Classification Issue:
The case involved an appeal against an Order-in-Original where the department proposed classifying certain products under a specific chapter heading of the Central Excise Tariff Act. The appellant, engaged in manufacturing PVC pipes and rubber products, claimed non-excisability based on the burst pressure of their products. The department argued that the products should be classified under a different chapter heading. The tribunal found that the burst pressure of the products was below the threshold required for the claimed classification, leading to the conclusion that the products fell under a different category. The tribunal referred to Chapter note 8 of Chapter 39, emphasizing that all flexible or non-flexible tubes, pipes, and hoses are excisable goods, regardless of their specific characteristics. The tribunal upheld the order denying classification under the contested chapter heading and confirmed the demand as sustainable under the correct classification.

Extended Period and Penalty Issue:
Regarding the invocation of the extended period and imposition of penalties, the tribunal determined that the appellant's misclassification of the products, resulting in the evasion of duty, constituted a willful act of misrepresentation. As the goods were found to be excisable despite the appellant's claims, the tribunal held that the extended period of limitation was appropriately invoked, and the penalties were rightly imposed. The tribunal upheld the decision of the adjudicating authority in this regard, concluding that the penalties were justified given the intentional misrepresentation of facts by the appellant. Consequently, the tribunal rejected the appeal and upheld the order of the first appellate authority, affirming the imposition of penalties and the sustained demand.

In summary, the appellate tribunal's judgment in this case centered on the classification of goods under the Central Excise Tariff Act, 1985, and the subsequent issues of invoking the extended period and imposing penalties. The tribunal determined that the appellant's products were correctly classified under a specific chapter heading based on the burst pressure criteria, leading to the confirmation of the demand. Additionally, the tribunal upheld the penalties imposed due to the appellant's willful misrepresentation of facts, affirming the decision of the adjudicating authority.