1996 (7) TMI 357 - AT - Central Excise

Summary

Issues:
Classification of goods under the Central Excise Tariff Act, 1985; Allegation of non-payment of duty; Competency of the officer issuing show cause notice; Suppression of facts by misdeclaration of goods; Time limitation for issuing show cause notice.

Classification of Goods under Central Excise Tariff Act, 1985:
The case involved a dispute regarding the correct classification of goods under the Central Excise Tariff Act, 1985. The appellants had filed a Classification List on 1-7-1986, describing the goods as "PLYBOND (GLUE)" under Tariff Sub-Heading 3501.90. However, changes in Headings and sub-headings in Chapter 35 occurred with effect from 1-3-1987. The relevant Tariff Heading Nos. 35.01, 35.05, and 35.06 were crucial for determining the correct classification of the goods.

Allegation of Non-Payment of Duty:
The Department alleged that the appellants paid duty at lower rates from 1-3-1987 to 28-4-1987, as the goods were classifiable under Tariff Heading No. 35.06. A show cause notice was issued for non-payment of duty, leading to an adjudication confirming the demand of duty and imposing a penalty. Subsequent legal proceedings challenged the competence of the officer issuing the show cause notice and the time limitation for issuing such notice.

Competency of the Officer Issuing Show Cause Notice:
The initial show cause notice was challenged on the grounds that it was issued by an incompetent officer. The lower appellate authority set aside the order based on this argument. However, a fresh show cause notice was issued by the Additional Collector, leading to further legal proceedings.

Suppression of Facts by Misdeclaration of Goods:
The Department alleged suppression of facts by the appellants, stating that they misdeclared the goods in the Classification List approved on 29-7-1986 despite the change in law from 1-3-1987. The issue revolved around whether the appellants had correctly declared the goods and complied with the new law.

Time Limitation for Issuing Show Cause Notice:
The appellants disputed the demand of duty, arguing that the show cause notice alleging suppression of facts was issued beyond the normal period of limitation of six months under Section 11A. The notice was issued on 29-5-1989 for the period from 1-3-1987 to 28-4-1987, raising questions about the validity of the notice and the timing of the allegations.

In conclusion, the Tribunal rejected the appeal, upholding the confirmation of duty and imposition of penalty by the lower authority. The decision was based on the finding that the appellants had not fully disclosed the facts in light of the new law under the Central Excise Tariff Act, 1985. The failure to furnish a fresh Classification List after the change in law and the lack of complete information in the initial declaration led to the dismissal of the appeal.