2022 (3) TMI 505 - AT - Central Excise

Classification of goods - Subscriber Call Recorder and Controller Attachment (popularly called STD-PCO) - to be classifiable under CETH No. 8517.00 and EPROMs was separately classified under 8524.90 or not - suppression of fact or not - Time Limitation - HELD THAT - The issue on merits on the classification of goods is no longer under dispute for the reason that in the appellant own case the Hon ble Supreme Court in ANJALEEM ENTERPRISES PVT. LTD. VERSUS COMMISSIONER OF C. EX., AHMEDABAD 2006 (1) TMI 271 - SUPREME COURT decided the matter against the appellant. Time Limitation - the commissioner (Appeals) rejected the claim on time bar submitted by the appellant before him on the ground that the issue of time bar was raised first time before the Commissioner (Appeals) - HELD THAT - It is a settled law that issue of limitation can be raised at any stage, being a mixed question of law and facts. Therefore, the Commissioner (Appeals) order on limitation is incorrect and illegal. Now, the issue on limitation is examined from the facts of this case. The appellant under bona fide belief have been claiming that STD-PCO and EPROMs are classifiable separately and EPROMs is under Exemption Notification No. 84/1989-CE dated 01.03.1989. The appellant have been filling the classification list wherein they have separately classified both the items and claim the exemption notification. Therefore, the entire facts were very much before the department - in the appellants own case though the matter was decided against them on merit by this tribunal in the case ANJALEEM ENTERPRISES PVT. LTD. VERSUS COMMISSIONER OF C. EX., AHMEDABAD 2006 (1) TMI 271 - SUPREME COURT but the tribunal considering the similar facts extended the benefit of time bar where it was held that where classification list has been approved, demand for duty based upon the revision in the classification could only be made from the date of the proposed change in the classification, the demand for the period within six months also cannot be sustained. As per above decision of the tribunal, the fact of the same is identical to the present case even on limitation also. Therefore, the entire demand which is beyond the normal period is not sustainable on time bar. The appeal is allowed with consequential relief on the ground of time bar only.

Summary

Issues Involved:
Classification of goods under Central Excise Tariff Heading, exemption under Notification No. 84/1989-CE, time bar for demand of duty, imposition of penalty.

Analysis:

1. Classification of Goods:
The case involved the classification of "Subscriber Call Recorder and Controller Attachment" (STD-PCO) and EPROMs under Central Excise Tariff Headings. The appellant believed that EPROMs were separately classifiable under CETH 8524.90 and exempt from duty under Notification No. 84/1989-CE. However, a Show Cause Notice was issued contending that EPROMs should be included in the value of STD-PCO. The issue of classification was settled against the appellant in previous cases, including a Supreme Court decision.

2. Exemption Under Notification No. 84/1989-CE:
The appellant claimed exemption from Central Excise duty under Notification No. 84/1989-CE for EPROMs based on their belief that they were recorded media. The appellant filed classification lists accordingly, but the department issued a Show Cause Notice challenging this classification and demanding duty.

3. Time Bar for Demand of Duty:
The main issue raised in the present appeal was the limitation period for demanding duty. The appellant argued that the demand for a longer period was hit by limitation as there was no mala fide intent. The appellant contended that the issue of limitation could be raised at any stage and cited various judgments to support their argument. The Tribunal found that the issue of time bar could indeed be raised at any stage and ruled in favor of the appellant based on similar facts in previous cases.

4. Imposition of Penalty:
The Adjudication Authority had imposed penalties on the appellant, including a personal penalty on Mr. MadhuKumar A. Mehta. However, since the duty demand itself was not sustained due to the time bar issue, the Tribunal set aside the penalties as well.

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal on the ground of time bar only. As the duty demand was not sustained, the penalties imposed were also set aside. The decision was pronounced in open court on 10.03.2022.

This detailed analysis covers the classification of goods, exemption under Notification No. 84/1989-CE, the time bar for demanding duty, and the imposition of penalties as addressed in the legal judgment by the Appellate Tribunal CESTAT AHMEDABAD.