1997 (10) TMI 115 - AT - Central Excise

Summary

Issues:
1. Classification of the product under Tariff Item 68 or 15A(1).
2. Mis-statement or suppression of facts leading to duty demand and penalty imposition.
3. Authority to issue show cause notice under extended period.
4. Assessable value adjustment in refund cases.
5. Classification of synthetic resins under Tariff Item 15A(1).
6. Time-barred demand due to no mis-statement or suppression of facts.

Detailed Analysis:
The appeal revolves around the classification of the product, Amidal AMH, under Tariff Item 68 or 15A(1). The dispute arose when the Supdt. of Central Excise challenged the classification under Tariff Item 68, asserting it should be classified under Tariff Item 15A(1). The appellants argued that Amidal AMH, being a polyacrylamide type polymer, should be classified under Tariff Item 68 as it is used for textile finishing, contrary to resins that give stiff finishes. The Assistant Collector initially approved the classification under Tariff Item 68, but later reclassified it under Tariff Item 15A(1), leading to a demand notice for differential duty during a specific period.

The appellants contested the imposition of duty and penalty, claiming that the classification under Tariff Item 68 was consistent since 1978 and that the show cause notice issued by the Supdt. under an extended period lacked authority. They also argued that Amidal AMH did not fall under Tariff Item 15A(1) as it had not reached the resin stage, citing CBEC Tariff Advice and technical definitions of resins and polymers to support their position. The Additional Collector upheld the duty demand and penalty, citing mis-statement or suppression of facts, and rejected the appellants' arguments regarding assessable value adjustment and classification of synthetic resins.

Upon review, the Tribunal found that the appellants had consistently declared Amidal AMH under Tariff Item 68 in classification lists since 1978, with no intention to evade duty. The Tribunal noted that the classification was approved by authorities multiple times without reservation, indicating no mis-statement or suppression of facts. Additionally, technical references were cited to support the appellants' classification under Tariff Item 68. The Tribunal concluded that the demand was time-barred due to the absence of mis-statement or suppression of facts, setting aside the Additional Collector's order and accepting the appeal.