2002 (8) TMI 227 - AT - Central Excise

Summary

Issues:
- Classification of the product under the Central Excise Tariff
- Time limitation for demanding duty
- Allegations of misdeclaration and suppression of material information

Classification of the product under the Central Excise Tariff:
The appellants, engaged in manufacturing Dabur Lal Tail, claimed its classification under Chapter Heading 30.03 of the Central Excise Tariff. A show cause notice was issued alleging misclassification as a cosmetic or toilet preparation under heading 33.04. The appellants argued that they consistently filed classification lists claiming the product as Ayurvedic Medicines under Chapter 3003.30, which were duly approved. The Revenue contended the appellants misdeclared the product to evade duty. The Tribunal noted the approvals of the classification lists and the lack of attempts by the Revenue to classify the product as a cosmetic or toilet preparation. Citing a previous judgment, the Tribunal emphasized the importance of the officer's active decision-making during approval. The Tribunal concluded that the demand was time-barred, as the Revenue could have sought more information if in doubt, setting aside the impugned order.

Time limitation for demanding duty:
The appellants contested the demand for duty for the period June, 95 to July, 98, arguing it was time-barred. They highlighted the continuous filing of classification lists since 1977, approved by the Revenue, and the lack of allegations of suppression. The Revenue claimed the extended period of limitation due to alleged misdeclaration. However, the Tribunal found that the approvals of the classification lists were not disputed, indicating no suppression or misdeclaration to evade duty. The Tribunal ruled the demand as time-barred and unsustainable, ultimately allowing the appeal.

Allegations of misdeclaration and suppression of material information:
The Revenue alleged that the appellants misdeclared the product and suppressed material information to evade duty. However, the Tribunal noted the consistent filing and approval of classification lists by the appellants, indicating no intent to evade duty. The Tribunal emphasized the officer's duty to make inquiries and ensure correct decisions during classification list approvals. As the Revenue did not seek further information despite approvals and sample testing, the Tribunal concluded that the demand was time-barred and set aside the impugned order, allowing the appeal.