2004 (1) TMI 161 - AT - Central Excise

Summary

Issues:
Classification of goods and whether show cause notices are time-barred.

Classification of Goods:
The case involved two show cause notices issued to two units for misclassification of goods under Chapter sub-heading 29.36 instead of Chapter 30. The manufacturers claimed therapeutic value based on Drugs Controller General's direction in 1996 and a notification in 1999. The Commissioner ruled against the manufacturers, holding that the products were not medicaments and correctly classifiable under Chapter 29.36. The appellants argued for classification under Chapter 30, citing Tribunal decisions and the lack of therapeutic value claim in the notification. The Tribunal found in favor of the appellants, stating that the products, being vitamins in measured doses, are correctly classifiable as medicaments under Chapter 30.

Time-Barring of Show Cause Notices:
The show cause notices were issued invoking the extended period of limitation due to alleged misdeclaration by the manufacturers. The department claimed suppression by the appellants, justifying the extended period. However, the Tribunal disagreed, noting that the appellants had been filing correct classification lists and that the alleged suppression was only concluded by the department after the notification banning the product was issued. The Tribunal accepted the appellants' contention that there was no misdeclaration and that the products had therapeutic value during the period in question. Consequently, the Tribunal held that the extended period of limitation was not applicable, setting aside the Commissioner's order and allowing the appeals. The Revenue's appeal was dismissed based on the findings regarding classification and limitation issues.