1991 (6) TMI 130 - AT - Central Excise

Summary

Issues Involved:
1. Whether the demand for central excise duty was time-barred.
2. Whether the appellants' actions constituted willful mis-statement or suppression of facts.
3. Whether the classification list was provisionally approved or final.

Issue-wise Detailed Analysis:

1. Time-Barred Demand:
The primary issue was whether the demand for central excise duty was time-barred under Section 11A of the Central Excises & Salt Act, 1944. The appellants argued that the demand was barred by limitation as the show cause notice was issued on 15-6-1988 for the period 1-3-1986 to 4-5-1986, beyond the normal limitation period. The Department invoked the extended period of five years, alleging willful mis-statement and suppression of facts.

The Tribunal noted that the appellants had filed RT-12 returns with detailed descriptions of the goods, which were duly assessed by the excise authorities. The Tribunal found no evidence of willful suppression or mis-statement of facts by the appellants, as the confusion regarding the classification of goods was acknowledged by the Department itself. Therefore, the Tribunal concluded that the normal limitation period was applicable, and the demand was time-barred.

2. Willful Mis-Statement or Suppression of Facts:
The Department alleged that the appellants willfully misstated facts by paying excise duty at 12% instead of the approved 15%, and by submitting the classification list late. The Tribunal examined the circumstances and found that the appellants were in continuous correspondence with the Department seeking clarification on the correct classification. The confusion was due to the new tariff act that came into force on 1-3-1986. The Tribunal held that the appellants' actions were not willful suppression or mis-statement but were due to genuine confusion and lack of guidance from the Department. Hence, the extended period under Section 11A could not be invoked.

3. Provisional or Final Classification List:
The Tribunal examined whether the classification list approved by the Assistant Collector was provisional or final. The Member (Technical) argued that the approval was tentative, indicated by the wording "until further orders" and the endorsement that the classification of refractory ceramic constructional goods was under dispute. However, the Member (Judicial) and the third Member (Technical) referred to the Madras High Court judgment in Indian Organic Chemicals Ltd. v. Union of India, which held that if the provisional assessment clause was struck off, the approval was final. The Tribunal found that the classification list was approved as final, and the show cause notice did not indicate provisional assessment. Therefore, the demand could not be justified on the basis of provisional approval.

Separate Judgments:
The Tribunal had a difference of opinion between the Member (Judicial) and the Member (Technical). The Member (Judicial) held that the demand was time-barred, while the Member (Technical) argued that it was not. The third Member (Technical) concurred with the Member (Judicial), leading to a majority opinion that the demand was time-barred.

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal with consequential relief, concluding that the demand was time-barred and there was no willful suppression or mis-statement of facts by the appellants. The classification list was deemed final, not provisional, and the extended period under Section 11A could not be invoked.