1990 (3) TMI 190 - AT - Central Excise

Summary

Issues Involved:

1. Classification of aluminium building products.
2. Applicability of Notification No. 183/84-CE.
3. Invocation of the extended period of limitation.
4. Imposition of penalty.

Detailed Analysis:

1. Classification of Aluminium Building Products:

The primary issue was whether the aluminium building products manufactured by the appellant should be classified under Tariff Item (T.I.) 27(3) or T.I. 68 of the Central Excise Tariff. The appellant contended that their products, including aluminium panels and profiles, were shapes and sections of aluminium falling under T.I. 27(3) and, therefore, exempt from central excise duty under Notification No. 183/84-CE. The revenue authorities argued that the products were finished articles used as building materials and should be classified under T.I. 68.

The Tribunal examined the nature of the products and the manufacturing process. It was noted that the disputed items, such as aluminium perforated panels, aluminium panels, flush profiles, splice panels, and edge profiles, were roll-formed from duty-paid aluminium strips without further operations like punching or drilling. The Tribunal concluded that these items were indeed shapes and sections of aluminium and not finished articles, thus falling under T.I. 27(3).

2. Applicability of Notification No. 183/84-CE:

The appellant argued that their products were exempt from central excise duty under Notification No. 183/84-CE, which granted exemption to shapes and sections of aluminium made from duty-paid plates, sheets, blanks, or strips. The Tribunal agreed with the appellant, noting that the notification itself contemplated the emergence of shapes and sections from strips through roll forming, a recognized method of cold-rolling. Therefore, the appellant was entitled to the benefit of the notification.

3. Invocation of the Extended Period of Limitation:

The revenue authorities invoked the extended period of limitation under Section 11-A of the Central Excises and Salt Act, 1944, alleging that the appellant had not applied for a central excise license or paid duty. The appellant contended that they acted in good faith, believing their products were exempt under T.I. 27(3) and Notification No. 183/84-CE.

The Tribunal referred to the Supreme Court judgment in Padmini Products v. C.C.E., which held that mere failure or negligence to take out a license or pay duty, when there was scope for doubt, did not attract the extended period of limitation. The Tribunal found no evidence of fraud, collusion, or wilful misstatement by the appellant and concluded that the extended period of limitation could not be invoked. Consequently, the demand was held to be time-barred.

4. Imposition of Penalty:

The adjudicating authority had imposed a penalty of Rs. 10,000 on the appellant. Given the Tribunal's findings that the goods were correctly classified under T.I. 27(3) and the demand was time-barred, the imposition of the penalty was also set aside.

Conclusion:

The Tribunal set aside the impugned order, quashed the penalty, and held that the goods manufactured by the appellant were classifiable under T.I. 27(3) of the Central Excise Tariff. The appellant was entitled to the benefit of Notification No. 183/84-CE, and the extended period of limitation could not be invoked. The revenue authorities were directed to give consequential effect to this order.