2006 (4) TMI 125 - SC - Central Excise

Whether in a particular set of facts and circumstances there was any fraud or collusion or wilful misstatement or suppression or contravention of any provision of any Act Held that - As the assessee had disclosed all the relevant facts and where the facts were already known to both the parties the omission by one to do what he might have done by itself does not render or amount to suppression of facts. Appeal dismissed.

Summary

Issues Involved:
1. Classification of Laboratory Glassware under the Central Excise Tariff Act.
2. Invocation of the extended period of limitation due to alleged suppression of facts.

Detailed Analysis:

Classification of Laboratory Glassware:
The primary issue in this case is the classification of Laboratory Glassware manufactured by the respondent under the Central Excise Tariff Act, 1985. The Tribunal had classified the goods under Heading 7012.10, which pertains to "Laboratory glassware," as opposed to the residual entry 7015.00, which covers "Other articles of glass."

1. Respondent's Declarations and Products:
- The respondent-assessee filed declarations from April 1991 to April 1995, claiming exemption from licensing control on the ground that their products were exempt from duty under Heading 7012.10.
- The products manufactured were described as "Laboratory Glassware," including items like stopcocks, adaptors, joints, flasks, condensers, funnels, tubes, stirrers, columns, extractors, miscellaneous fittings, and units for various laboratory uses.

2. Investigation and Findings:
- In 1994, the respondent's premises were searched, and it was concluded that the products were entire industrial units for chemical manufacture, thus should be classified under Heading 7015.00.
- However, the Tribunal found that the items listed by the respondent matched the descriptions under Heading 7012.10 as per the Harmonized System of Nomenclature (HSN), which includes laboratory glassware used in research, pharmaceutical, and industrial laboratories.

3. HSN Explanatory Notes:
- Explanatory Note 70.17 of HSN includes glass articles used in laboratories and excludes industrial glassware.
- Explanatory Note 70.20 covers other glass articles not classified elsewhere, including industrial articles.
- The Tribunal concluded that the respondent's products, made from borosilicate glass, fit the criteria for laboratory glassware under Heading 7012.10 and not the residual category under Heading 7015.00.

4. Tribunal's Judgment:
- The Tribunal held that the Laboratory Glassware manufactured by the respondents would not fall under Tariff Entry 7015.00.
- It was noted that the products were specifically listed in the HSN as laboratory glassware, even if assembled into complete units.

Invocation of Extended Period of Limitation:
The second issue pertains to whether the extended period of limitation under Section 11A of the Central Excise Act could be invoked due to alleged suppression of facts by the respondent.

1. Show Cause Notices and Allegations:
- The respondent was issued show cause notices demanding duty and invoking the extended period of limitation on the grounds of suppression of facts.
- The Commissioner confirmed the demand and imposed penalties, alleging that the respondent had not disclosed material facts.

2. Tribunal's Findings on Suppression:
- The Tribunal found that the respondent had disclosed all material facts in their declarations, which were acknowledged by the Department.
- The Tribunal observed that the Department had full knowledge of the products being manufactured and classified by the respondent, thus negating the allegation of suppression.

3. Legal Precedents:
- The judgment referenced the case of M/s. Pushpam Pharmaceuticals v. Collector, which clarified that suppression must be deliberate to evade duty.
- The Tribunal noted that mere omission or failure to act does not constitute suppression unless it is a deliberate act to withhold information.

4. Supreme Court's Conclusion:
- The Supreme Court agreed with the Tribunal that there was no suppression of facts by the respondent.
- The Court emphasized that the Department could not allege suppression when the facts were already known and had been acknowledged in earlier declarations.
- The demand based on suppression was thus unsustainable beyond the normal period of six months.

Final Judgment:
The Supreme Court dismissed the appeals with costs, upholding the Tribunal's decision that the Laboratory Glassware manufactured by the respondents is classifiable under Heading 7012.10 and that the extended period of limitation was not applicable due to the absence of suppression of facts.