2006 (4) TMI 133 - SC - Central Excise

Demand - Limitation - Suppression of facts - whether the extended period of limitation under Section 11A of the Central Excise Act, 1944 could be invoked - Held that - approval of the classification list by the Assistant Collector, Central Excise, on 6-6-1991, it could not be said to have been done without application of mind. A copy of the order of the Assistant Collector Central Excise dated 6-9-1991 has also been produced before us. It is not a mere cursory reasoning but a detailed investigation into the facts and conclusion reached on the basis of those facts. It may be that the Assistant Collector Central Excise was wrong in approving the classification of Ossopan under T-H. 02.01. However it cannot be said that the Assistant Collector Central Excise did not consider the relevant material or that there was any suppression of fact. The Tribunal s opinion on the non-applicability of the extended period of limitation is accordingly upheld - Decided against Revenue.

Summary

Issues:
1. Whether the extended period of limitation under Section 11A of the Central Excise Act, 1944 could be invoked.

Analysis:
The case involved the classification of the product 'Ossopan' under the Central Excise Act, 1944. The show cause notice was issued concerning the reclassification of the product under Tariff Heading 02.01, which was initially classified under Tariff Heading 3003.10 as a drug. The respondents argued that the approval of the reclassification list on 6-6-1991 prevented the extended period of limitation under Section 11A from being invoked. The Tribunal held that the product should be classified under T.H.3003.10 but agreed with the respondents that the extended period of limitation could not be applied due to the approved classification list.

The Supreme Court examined the approval of the classification list by the Assistant Collector, Central Excise, on 6-6-1991. The Court found that the approval was not arbitrary and was based on a detailed investigation into the facts. Even though the reclassification might have been incorrect, it was determined that the Assistant Collector had considered all relevant material, and there was no suppression of facts. Consequently, the Court upheld the Tribunal's decision regarding the non-applicability of the extended period of limitation under Section 11A.

In conclusion, the civil appeals were disposed of accordingly, with no order as to costs. The judgment clarified that the approval of the classification list by the Assistant Collector, Central Excise, prevented the extended period of limitation from being invoked, even if the reclassification was ultimately deemed incorrect.