1987 (1) TMI 319 - AT - Central Excise

Summary

Issues: Classification of goods under Tariff Item 29A and time bar for duty liability.

Classification Issue Analysis:
The case involves exporters of marine products who built refrigeration units by fabricating parts and erecting cold-storage units. The dispute arose when the authorities classified the goods as refrigeration appliances excisable under Item 29A of the Central Excise Tariff. The appellants argued that the goods were not refrigeration appliances but cold-storage units, citing a judgment of the Allahabad High Court. The Central Board confirmed the classification under Item 29A, relying on the main heading of the tariff item covering refrigerating and air-conditioning appliances and parts thereof. The appellants contended that previous decisions supported their position, but the Tribunal, in a prior order, had already classified similar goods under Tariff Item 29A(3), affirming the Revenue authorities' classification.

Time Bar Issue Analysis:
Regarding the time bar for duty liability, the appellants argued that there was no intentional evasion of duty, and the basis for duty liability was a contentious issue with conflicting views even among High Courts. The appellants referenced a recent decision of the Kerala High Court to support their stance. The Revenue authorities contended that the goods fell under the entry, and the absence of a license or gate passes did not exempt the appellants from liability. The Tribunal acknowledged the conflicting views on the assessability of the product and the absence of intentional evasion of duty. Consequently, the Tribunal held that the demand for duty, issued in 1978 for the years 1973, 1975, and 1976, was barred by time, as there was no intention to evade payment of duty. The penalty imposed was set aside, emphasizing the importance of determining suppression or clandestine removal in duty liability cases.

In conclusion, the Tribunal upheld the classification of the goods under Tariff Item 29A but ruled that the demand for duty was time-barred. The decision highlighted the significance of intentional evasion in duty liability cases and the need to consider conflicting views on assessability when determining the period of limitation for demands.