2020 (1) TMI 182 - AT - Central Excise

Classification of goods - industrial paints - industrial varnish - whether the goods are classifiable under chapter heading 2715 00 90 as done by the Department or chapter heading 3208 10 90 which the assessee has chosen? - HELD THAT - The letter dated 07.12.2015 issued by the Ld. Asstt. Commissioner, Kalyani Division, has not been dealt wherein it is stated that the subject goods manufactured by the appellant assessee is classifiable under chapter heading 3208 10 90. In the said letter, a specific reference has been made by the Ld. Asst Commissioner to the examination report issued by the National Test House. The justice would be met if the matter is re-examined by the Ld. Commissioner duly considering the contents of the aforesaid letter issued by the Ld. Asst Commissioner. While re-examining the classification, the Ld. Commissioner will specifically deal with the test reports considered in the said letter of the Asstt. Commissioner - appeal allowed by way of remand.

Summary

Issues:
Classification of goods under chapter heading 2715 00 90 or 3208 10 90.
Time bar for demanding differential duty and imposing penalty.

Classification Issue Analysis:
The appeal was filed against the demand of central excise duty of approximately ?2.82 crores confirmed by the Ld. Commissioner for the period April 2009 to August 2014. The appellant, engaged in the manufacture of industrial paints and varnish, contested the classification of goods under chapter heading 2715 00 90, attracting 14% duty, as done by the Department. The appellant argued that the goods do not contain bitumen, contrary to the Department's classification as bituminous mixture. The Ld. Consultant referred to a letter and examination report supporting classification under chapter heading 3208 10 90, attracting 12% duty. The Ld. Authorized Representative for the Revenue supported the Department's classification, stating that the appellant should pay the differential duty. The Tribunal noted discrepancies in the Ld. Commissioner's order, specifically the unaddressed letter stating the goods are classifiable under chapter heading 3208 10 90. The Tribunal directed the Ld. Commissioner to re-examine the matter, considering the letter and test reports, with the appellant's cooperation. The Tribunal emphasized the principles of natural justice and clarified that no opinion was provided on the goods' classification, allowing the appeal by remand for re-examination.

Time Bar Issue Analysis:
The appellant contested the demand on the grounds of time bar, citing no fraud or suppression. The Ld. Consultant argued that penalty should not be imposed in the absence of fraud or suppression. However, the Ld. Authorized Representative supported the penalty and demanded the payment of the differential duty. The Tribunal did not provide a specific ruling on the time bar issue in the judgment, focusing primarily on the classification matter. Therefore, the time bar issue was not conclusively addressed in the judgment, leaving it open for further consideration in subsequent proceedings if necessary.

This judgment primarily addressed the classification issue of goods under different chapter headings, directing a re-examination by the Ld. Commissioner based on unaddressed evidence and emphasizing procedural fairness. The time bar issue, although raised by the appellant, was not conclusively determined in this judgment, with the Tribunal focusing on the classification dispute.