1997 (11) TMI 163 - AT - Central Excise

Summary

Issues:
Classification of parts of conveyors and elevators under Central Excise Tariff Act, 1985 - Time-barred demand - Misdeclaration of goods - Applicability of penalty under Rule 173Q of Central Excise Rules, 1944.

Analysis:
The appellant appealed against an order classifying parts of conveyors and elevators under sub-heading 8431 and shafts, bearings, bearing housings, couplings, gear boxes, sprockets under Heading 8438 of the Central Excise Tariff Act, 1985, with a demand of Rs. 8,36,293.72 and a penalty of Rs. 5 lakhs imposed. The appellant contended that the parts were specifically designed for sugar and cement mill machinery, not interchangeable, and should be classified as parts of said machinery.

The appellants, engaged in manufacturing sugar and cement mill machinery, classified the parts under sub-headings 8438.00 or 8474.00 in their classification list from 1-3-1986. Show cause notices were issued alleging misclassification under Rule 9(2) of Central Excise Rules, 1944. The appellant argued that the demand was time-barred due to the classification list filed and no suppression or misdeclaration of goods.

The Collector relied on certificates from buyers and suppliers indicating the machinery supplied was for sugar and cement mill machinery, falling under specific headings. The Tribunal noted that the appellant manufactured conveyors and other machinery under sub-heading 8428.00, suitable for machinery under Heading Nos. 84.25 to 84.30, justifying the classification under the impugned order.

Regarding shafts, bearings, and related items, the Tribunal found them rightly classifiable under Heading 84.33 as per Section Note 2 of Section XVI, as manufactured by the appellant. The Tribunal held that the appellant did not misdeclare goods, as they detailed the classification list mentioning all disputed items, making the extended period provisions inapplicable, thus setting aside the penalty imposed.

In conclusion, the appeal was disposed of, affirming the classification of goods under the impugned order and setting aside the penalty due to the absence of suppression or misdeclaration of goods, making the extended period provisions inapplicable.