2001 (11) TMI 179 - AT - Central Excise

Rectification of mistake - Appeal to Appellate Tribunal - Additional grounds - Exemption - Registration - Demand - Limitation

Summary

Issues Involved:
1. Penalty Rectification
2. Early Hearing Request
3. Permission to Raise Additional Grounds
4. Classification of Goods
5. Exemption from Central Excise Duty
6. Allegations of Mis-declaration and Suppression of Facts
7. Limitation Period for Demand
8. Eligibility for SSI Exemption
9. Computation of Duty as Cum-Duty Price
10. Penalties and Confiscation

Detailed Analysis:

1. Penalty Rectification:
The Revenue filed Misc. Application No. 218 to rectify the penalty amount from Rs. 2,31,970/- to Rs. 2,31,20,970/-. The tribunal found no error in the stay order and rejected the application, noting that any mistake should have been rectified by the adjudicating authority.

2. Early Hearing Request:
Misc. Application No. E/Misc./719 by the Commissioner of Central Excise for early hearing was allowed as the case was already listed for hearing.

3. Permission to Raise Additional Grounds:
Misc. Application No. E/Misc./241 by the appellants to raise additional grounds was allowed, considering the decisions of the Allahabad High Court in relevant cases. Misc. Application No. E/Misc./523 was partly allowed, noting that the issue of alleged discrimination would be considered on merits.

4. Classification of Goods:
The appellants claimed that 'wheat puffs' and 'soya nuts' should be classified under Chapter sub-heading 2108.99, exempt from duty under various notifications. The tribunal found that 'wheat puffs' should be classified under Chapter Heading 1904.10 and 'soya nuts' under Chapter Heading 21.07/21.08, rejecting the claim for exemption.

5. Exemption from Central Excise Duty:
The tribunal held that 'wheat puffs' and 'soya nuts' were not eligible for exemption under Notification No. 2/94 and other related notifications. It was determined that 'puffed wheat' could not be considered as 'Prasad/Prasadam' or 'Chabena'.

6. Allegations of Mis-declaration and Suppression of Facts:
The appellants were alleged to have mis-declared their products to evade duty. The tribunal found that the declarations were misleading, as the products were described differently in contracts and invoices compared to the declarations made for duty purposes. This was deemed a positive act of mis-declaration and suppression.

7. Limitation Period for Demand:
The tribunal upheld the extended period of limitation for the demand, noting that the appellants had not filed proper declarations or sought clarification about their legal obligations. The mis-declaration and suppression of facts justified the extended period.

8. Eligibility for SSI Exemption:
The tribunal directed the Commissioner to examine the appellants' eligibility for SSI exemption and extend the benefit if applicable.

9. Computation of Duty as Cum-Duty Price:
It was argued that the sale price should be considered as cum-duty price. The tribunal remanded the matter to the Adjudicating Officer to re-compute the duty in light of the decision in the Srichakra Tyres Ltd. case.

10. Penalties and Confiscation:
The tribunal set aside the penalties on the firm and individuals except for Shri R.N. Goel, whose penalty abated. The confiscation of seized goods was upheld, but the confiscation of land, building, plant, and machinery was set aside.

Conclusion:
The tribunal concluded that 'puffed wheat' is classifiable under Chapter Heading 19.04 and 'puffed soya nuts' under Chapter Heading 21.07/21.08, both not eligible for exemption. The duty is to be re-computed considering SSI exemption and cum-duty price. Penalties were reconsidered, and confiscation of land, building, plant, and machinery was set aside. The appeals were disposed of accordingly.