1992 (9) TMI 226 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the impugned goods.
2. Filing of classification lists.
3. Payment of excise duty and issuance of GP.1.
4. Alleged clandestine removal and evasion of duty.
5. Applicability of extended period under Section 11A of the Central Excises and Salt Act, 1944.
6. Penalty imposed.

Issue-wise Detailed Analysis:

1. Classification of the Impugned Goods:
The appellants were engaged in manufacturing cast articles of iron and steel (unmachined). The Additional Collector classified these goods under Chapter 84 and 86, asserting that they were parts with essential character of machinery. The appellants contended that these goods fell under sub-heading 7325.20 as "other cast articles of steel" and were cleared accordingly. The Tribunal concluded that the goods were correctly classified under Chapter 73 as they had not acquired the essential character of finished machinery parts.

2. Filing of Classification Lists:
The appellants argued that they had filed classification lists effective from 1-4-1987 and 1-3-1988, which were approved by the department. The Tribunal noted that the department had regularly checked and approved these lists, indicating that the appellants had complied with the filing requirements. The Tribunal found no evidence of failure to file classification lists post 1-3-1988.

3. Payment of Excise Duty and Issuance of GP.1:
The department alleged that the appellants cleared goods without issuing GP.1 and without paying the appropriate duty. The appellants contended that they paid duty under the correct classification and issued delivery challans as the goods were exempt from duty. The Tribunal accepted the appellants' argument, noting that the goods were cleared under the correct classification and there was no evasion of duty.

4. Alleged Clandestine Removal and Evasion of Duty:
The department charged the appellants with clandestine removal and evasion of duty, citing non-filing of price lists and non-issuance of GP.1. The appellants argued that they regularly filed classification lists and there was no clandestine removal. The Tribunal found that the appellants had been transparent in their operations, regularly filing classification lists and having their records audited by the department. Therefore, the charge of clandestine removal was not sustainable.

5. Applicability of Extended Period under Section 11A:
The department invoked the extended period under Section 11A, alleging suppression of facts. The appellants contended that there was no suppression or misrepresentation as they had been filing classification lists and the department was aware of their activities. The Tribunal agreed with the appellants, stating that there was no suppression or wilful misrepresentation, and thus, the extended period under Section 11A was not applicable.

6. Penalty Imposed:
The Additional Collector imposed a penalty of Rs. 25,000 on the appellants. Given the Tribunal's findings that the appellants had complied with classification and duty payment requirements and there was no clandestine removal or suppression of facts, the penalty was deemed unjustified. The Tribunal allowed the appeal with consequential relief and rejected the cross-appeal.

Conclusion:
The Tribunal concluded that the appellants succeeded both on merits and on limitation. The goods were correctly classified under Chapter 73, there was no clandestine removal or evasion of duty, and the extended period under Section 11A was not applicable. The appeal was allowed with consequential relief, and the cross-appeal was rejected.