1992 (4) TMI 157 - AT - Central Excise

Summary

Issues Involved:
1. Classification of speedometer cables and elbows under the Central Excise Tariff.
2. Invocation of the extended period of limitation under Section 11A of the Central Excises and Salt Act, 1944.

Detailed Analysis:

1. Classification of Speedometer Cables and Elbows:
The primary issue was whether speedometer cables and elbows should be classified as parts or accessories of speedometers under Heading 90.33 or as flexible transmission shafts under Heading 84.83 of the Central Excise Tariff. The appellants argued that these items should fall under Heading 90.33, which covers parts and accessories for machines, appliances, instruments, or apparatus of Chapter 90, as speedometers are classifiable under Heading 90.29. They contended that Note 1(1) to Section XVI of the Tariff excludes articles of Chapter 90 from being classified under any heading of Chapter 84.

On the other hand, the Department argued that speedometer cables and elbows are flexible transmission shafts and coupling devices, respectively, which are specifically covered under Heading 84.83. They referred to the Harmonised Commodity Description and Coding System (HSN) notes, which state that flexible shafts transmitting motion to instruments like speedometers fall under Heading 84.83.

The Tribunal concluded that speedometer cables, which transmit motion from the wheel or driving unit to the speedometer, are flexible transmission shafts classifiable under Heading 84.83. Similarly, elbows, acting as coupling devices, are also classifiable under Heading 84.83. The Tribunal relied on the alignment of the Central Excise Tariff Act, 1985, with the HSN and the explanatory notes to determine the classification.

2. Invocation of Extended Period of Limitation:
The second issue concerned whether the extended period of limitation under the proviso to sub-section (1) of Section 11A of the Central Excises and Salt Act, 1944, was applicable. The Additional Collector had alleged that the appellants wilfully suppressed and mis-stated facts, leading to duty evasion, and confirmed a demand of Rs. 4,29,935 along with a penalty of Rs. 25,000 under Rule 173Q.

The appellants contended that the classification lists and monthly RT 12 returns were duly approved and assessed by the Assistant Collector, negating allegations of suppression or mis-statement. They argued that the demand invoking the longer period of five years was barred by limitation, citing various case laws.

The Tribunal found no evidence of wilful mis-declaration or suppression of facts by the appellants. The classification lists and RT-12 returns were approved and finalized by the concerned officers. The Tribunal referred to the Supreme Court's decision in Collector of Central Excise v. Chemphar Drugs and Liniments, which held that for invoking the extended period, conscious or deliberate withholding of information must be established. The Tribunal concluded that the appellants' actions did not constitute wilful mis-statement or suppression of facts, thus rendering the demand barred by limitation.

Conclusion:
The Tribunal set aside the impugned order confirming the demand and penalty, holding that speedometer cables and elbows are classifiable under Heading 84.83 and that the extended period of limitation was not invokable due to the absence of wilful mis-statement or suppression of facts by the appellants. The appeal was disposed of accordingly.