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Issues: Classification of Bus Ducts under CETA, 1985; Time bar for demand of duty; Benefit of Notification 69/86
Classification of Bus Ducts under CETA, 1985: The dispute in this case revolves around the appropriate classification of Bus Ducts manufactured by the appellants under the Central Excise Tariff Act, 1985. The Department contends that Bus Ducts should be classified under Heading 85.44 as "other insulated electric conductors," while the appellants argue that the correct classification is under Heading 85.36 as "electrical apparatus for making connections to or in electrical circuits." The appellants support their classification with pamphlets, classification lists, gate passes, and RT 12 returns, all consistently describing the item as Bus Ducts used for tapping electricity in electric circuits. The Department, on the other hand, asserts that Bus Ducts are insulated electric conductors and not electrical apparatus for making connections, citing the physical characteristics of the item and trade notices for support. Time bar for demand of duty: Regarding the time limitation for demanding duty, the appellants argue that the demand is time-barred as the show cause notice was issued on 25-9-1992 for the period from 31-1-1987 to 25-9-1991. They contend that they had consistently filed classification lists, gate passes, and RT 12 returns describing the item as Bus Ducts, which were approved by the Department, except for the year 1987 when the item was not declared. The Department, however, argues that deliberate misclassification occurred in subsequent years by describing the item as parts suitable for use with apparatus of Heading 85.37, thereby justifying the demand within the limitation period. Benefit of Notification 69/86: The appellants seek the benefit of Notification 69/86 dated 10-2-1986, which provides for a concessional rate of duty for certain items. The Department concedes that if the item is classified under Heading 85.44, the appellants would be entitled to the benefit of the notification, attracting a lower rate of duty at 25%. However, the Department maintains that the item is correctly classified under Heading 85.44 as insulated electric conductors. Judgment: After hearing both parties, the Tribunal acknowledges that the classification issue requires detailed examination at the final hearing with reference to the Harmonized System of Nomenclature (HSN) and product catalogues. However, the Tribunal finds a strong prima facie case on the limitation issue in favor of the appellants due to the approved classification lists, RT 12 returns, and other material submitted to the Department. The Tribunal rules that there was no deliberate misclassification warranting the invocation of the extended period of limitation. Consequently, the Tribunal waives the pre-deposit requirement of duty and penalty and stays the recovery pending the appeal, which is scheduled for final hearing on 29-6-1994 along with similar matters involving comparable issues.
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