1997 (1) TMI 168 - AT - Central Excise

Summary

Issues: Classification of products under Central Excise Tariff Act, 1985; Reopening of approved classification list; Demand of duty under Section 11A of Central Excise Act, 1944.

Classification of products under Central Excise Tariff Act, 1985:
The case involved the classification of products manufactured by the appellants under the Central Excise Tariff Act, 1985. The Assistant Collector had classified the products under Chapter Heading No. 8202.90, attracting a 20% ad valorem duty. The appellants, however, had submitted a classification list pleading for their products to be classified under Tariff Heading No. 81.01.00. The department issued a show cause notice to the appellants, contending that the products should be classified under Tariff sub-heading 8202.90. The lower authorities, after considering submissions and case law, held that the products were classifiable under Chapter Heading 8202.90 and confirmed the demand. The Tribunal analyzed the nature of the products, their specific use in mining and rock drilling, and found that they were designed for a distinct function and utility beyond being mere base metal articles. Consequently, the Tribunal agreed with the classification under Chapter Heading 8202.90, upholding the lower authorities' decision.

Reopening of approved classification list:
The issue of reopening the approved classification list was raised by the appellants. The department had initially approved the classification of the disputed products under Chapter Heading 8101.00 but later sought to reclassify them under Chapter Heading 8202.90. The department contended that even if a classification list is approved, duty demand can be raised under Section 11A of the Central Excise Act. Citing the Apex Court's decision in Ballarpur Industries, the department argued that the demand was raised within the prescribed six-month period, justifying the reclassification and duty demand. The Tribunal concurred with the department's stance, emphasizing the applicability of Section 11A and the timely issuance of the show cause notice within the statutory limit.

Demand of duty under Section 11A of Central Excise Act, 1944:
The Tribunal addressed the aspect of demanding duty under Section 11A of the Central Excise Act, 1944. The department had confirmed the demand for differential duty based on the reclassification of the products under Chapter Heading 8202.90. The Tribunal, after considering the arguments presented, upheld the department's decision to raise and confirm the duty demand under Section 11A. The Tribunal concluded that the demand was rightly raised within the specified timeframe, in accordance with the provisions of the Act. Consequently, the Tribunal upheld the impugned order and rejected the appeal, affirming the duty demand under Section 11A and the classification under Chapter Heading 8202.90.