1990 (6) TMI 155 - AT - Central Excise

Summary

Issues: Classification of goods under Tariff Item 68, Central Excises and Salt Act, 1944; Liability to pay duty on laminated jute bags; Application of Notification No. 53/65-C.E.; Bar on demand by limitation.

The judgment involves a case where the appellants, manufacturers of laminated jute bags, were called upon to show cause for the classification of goods under Tariff Item 68 of the Central Excises and Salt Act, 1944, and the demand for Central Excise duty for goods cleared without payment of duty. The Assistant Collector and the Appellate Collector held the appellants liable for duty under Item 68 for a specific period. The appeal challenges this decision (para. 1).

The contentions in the appeal revolve around two main points: first, whether laminated jute bags fall under Tariff Item 22A, CET, and are exempted from duty under Notification No. 53/65-C.E.; second, whether the demand for duty prior to a certain date is barred by limitation (para. 3).

The Tribunal examined previous judgments and found that the predominance of jute in laminated jute bags qualifies them as "jute manufactures" under Tariff Item 22A, CET, after a specific date when the test of predominance was introduced. The Tribunal rejected the request for remand to ascertain jute's predominance, as it was undisputed that jute was the major constituent in the bags manufactured by the appellants. Thus, the goods were classified under Tariff Item 22A after the introduction of the predominance test (para. 4).

Regarding the demand for duty before the date when the predominance test was introduced, the Tribunal ruled that the demand was time-barred. The Department's contention of wilful suppression was dismissed based on the Department's own clarifications that laminated jute bags fell under Tariff Item 22A and not Item 68. Therefore, the demand for duty for the specified period was deemed unsustainable due to limitation, leading to the appeal's allowance in favor of the appellants (para. 5).

In conclusion, the judgment clarifies the classification of laminated jute bags under the Central Excises and Salt Act, the application of relevant notifications for duty exemption, and the limitation on demanding duty for specific periods, providing relief to the appellants based on the legal interpretations and precedents cited during the proceedings.