2025 (2) TMI 1106 - AT - Central Excise

Classification of the goods manufactured - Collar Band - Chest Band - Classifiable under Central Excise Tariff Sub-Heading (CETSH) 49090090 or under CETSH 4818 5000 of first schedule of Central Excise Tariff Act 1985 or not - Printed Fabric Folder and Swatch Cards - to be classified under CETSH 4901 1020 or under CETSH 4820 3000? - suppression of facts or not - extended period of limitation. Classification of Collar Band and Chest Band - HELD THAT - These are rightly classified by the respondent under CETSH 48185000 since the CETSH 48185000 specifically reads articles of apparel and clothing accessories and are chargeable to duty at the rate 16% at the relevant time. Classification of printed fabric folder and swatch cards - HELD THAT - It is found that the Heading 4820 clearly indicates that the goods covered therein are all items of stationary and as known in the market. The product being manufactured by the appellant is totally different and not comparable to the goods folder as contemplated in the CETSH 48203000. Accordingly classification of the same under CETSH 48203000 is unsustainable. Time limitation - suppression of facts or not - HELD THAT - It is an admitted fact that if there is no proper classification prescribed under the statues to classify the goods adopting similar classification as adopted by the appellant cannot be considered as suppression of facts to allege illegality. The issue regarding invoking the extended period of limitation is well settled as per the judgment of the Hon ble Supreme Court in the matter of Continental Foundation Jt. Venture Vs. Commr. Of C. Ex. Chandigarh-I 2007 (8) TMI 11 - SUPREME COURT wherein it is held that as far as fraud and collusion are concerned it is evident that the intent to evade duty is built into these very words. So far as mis-statement or suppression of facts are concerned they are clearly qualified by the word wilful preceding the words mis-statement or suppression of facts which means with intent to evade duty. The next set of words contravention of any of the provisions of this Act or Rules are again qualified by the immediately following words with intent to evade payment of duty. Therefore there cannot be suppression or mis-statement of fact which is not wilful and yet constitute a permissible ground for the purpose of invoking penal provisions - the Appellants cannot be charged with willful mis-statement or suppression of facts with intent to evade tax for invoking extended period of limitation in this case. Conclusion - i) Collar Band and Chest Band are rightly classified by the respondent under CETSH 48185000. ii) The printed fabric folder and swatch cards are righly classifiable under CETSH 4901 1020 iii) The Appellants cannot be charged with willful mis-statement or suppression of facts with intent to evade tax for invoking extended period of limitation in this case. The confirmation of the demand by invoking extended period of limitation is unsustainable. Since entire demand is barred by limitation the impugned order is set aside - appeal allowed.

Summary

The Appellate Tribunal considered the issues of classification of goods manufactured by the appellant and whether the demand for duty was barred by limitation. The Tribunal analyzed the classification of 'Collar Band' and 'Chest Band' under Central Excise Tariff Sub-Heading (CETSH) 48185000, while 'Printed Fabric Folder' and 'Swatch Cards' were classified by the appellant under CETSH 49011020 but reclassified by the department under CETSH 48203000. The Tribunal examined the relevant legal framework, precedents, evidence, and arguments presented by both parties.Regarding the classification issue, the Tribunal upheld the respondent's classification of 'Collar Band' and 'Chest Band' under CETSH 48185000 as articles of apparel and clothing accessories chargeable to duty. However, the Tribunal found that the classification of 'Printed Fabric Folder' and 'Swatch Cards' under CETSH 48203000 was unsustainable as the goods manufactured by the appellant were not comparable to typical stationery folders covered under that heading.On the issue of limitation, the Tribunal considered the appellant's argument that there was no suppression of facts and that the demand period was beyond the statutory limitation period. The Tribunal referenced legal judgments emphasizing that wilful suppression of facts is required to invoke the extended period of limitation for duty demands. As the show cause notice was issued beyond the one-year limitation period, the Tribunal concluded that the demand was not sustainable in law. Therefore, the Tribunal set aside the impugned order, ruling that the entire demand was barred by limitation, and allowed the appeal with consequential relief.In summary, the Tribunal determined the correct classification of goods manufactured by the appellant, rejected the classification proposed by the department, and concluded that the demand for duty was barred by limitation due to the lack of wilful suppression of facts. The appeal was allowed, and the impugned order was set aside.