1985 (9) TMI 205 - AT - Central Excise

Summary

Issues:
1. Time limit for raising demand of duty - 5 years or 6 months
2. Classification of parts of cash registering machines under Tariff Item 68 or 33-D
3. Determination of duty under Rule 9A(5) or Rule 9A(1)(ii)

Analysis:

1. Time Limit for Raising Demand of Duty:
The main issue in this appeal was whether the time limit for raising the demand of duty should be extended to 5 years or remain at the shorter limit of 6 months. The Collector (Appeals) argued that the extended time limit of 5 years should apply due to the appellant's insistence that the goods fell under Tariff Item 33-D instead of Tariff Item 68. However, the Tribunal disagreed with this interpretation, stating that the appellant's claim did not constitute a mis-statement or willful mis-statement under Section 11A of the Act. The Tribunal held that the time limit applicable in such a situation would be the shorter time limit of 6 months.

2. Classification of Parts of Cash Registering Machines:
The dispute revolved around the classification of parts of cash registering machines under Tariff Item 68 or Tariff Item 33-D. The Department contended that the parts should be classified under Tariff Item 68, while the appellants argued for classification under Tariff Item 33-D. The Collector (Appeals) had invoked the extended time limit of 5 years based on the appellant's classification claim. However, the Tribunal found that the appellant's classification claim did not amount to a mis-statement, and the Department could have raised demands within the regular time limit. Therefore, the Tribunal held that the appellant cannot be held guilty of willful mis-statement and classified the parts under Tariff Item 33-D.

3. Determination of Duty under Rule 9A(5) or Rule 9A(1)(ii):
The final issue concerned the determination of duty under Rule 9A(5) or Rule 9A(1)(ii) of the Central Excise Rules, 1944. The appellants argued that duty should be determined under Rule 9A(1)(ii), which provides for the rate of duty and tariff valuation on the date of actual removal of goods from the factory. The Tribunal agreed with the appellants, stating that the facts of the case did not warrant the application of Rule 9A(5) and that Rule 9A(1)(ii) should be applied. Consequently, the demand of duty from the appellants was restricted to a period of six months, and the appeal was disposed of in favor of the appellants.

In conclusion, the Tribunal ruled in favor of the appellants on all three issues, determining the time limit for raising the demand of duty, classifying the parts of cash registering machines under Tariff Item 33-D, and applying Rule 9A(1)(ii) for the determination of duty.