1997 (7) TMI 127 - SC - Central Excise

Summary

Issues: Classification of products under Central Excise Tariff, Bar of limitation for duty demand

Classification Issue:
The case involved a dispute regarding the classification of Carbon Paper and Carbonised Adding Machine Rolls under the Central Excise Tariff. The respondent initially classified the products under Tariff Item 68 but later faced a show cause notice to reclassify them under Tariff Item 17(2) due to a change in the definition. The Assistant Collector initially approved the classification under Tariff Item 68 but later directed the respondent to pay duty under Tariff Item 17(2). The Tribunal partially allowed the appeal, classifying Carbonised Adding Machine Rolls under Tariff Item 17(2) and Carbon Paper under Tariff Item 68. However, a previous Supreme Court judgment established that Carbon Paper should be classified under Tariff Item 17(2), leading to the Tribunal's decision being set aside.

Bar of Limitation Issue:
The second issue revolved around the bar of limitation for duty demand. The Tribunal held that the demand preceding six months from the show cause notice date was barred by limitation. The appellant argued that since the Assistant Collector's order directed duty payment for six months before the show cause notice of December 29, 1979, that period should not be considered time-barred. However, the Court rejected this argument, stating that until the order of July 2, 1980, no decision was made on the classification. As the demand notice was issued on September 1, 1980, the Tribunal's decision on the limitation period was upheld.

In conclusion, the Supreme Court upheld the classification of Carbon Paper under Tariff Item 17(2) and affirmed the Tribunal's decision on the bar of limitation for duty demand. The appeals were disposed of accordingly with no order as to costs.