1997 (12) TMI 225 - AT - Central Excise

Summary

Issues Involved:
1. Classification of Aluminium Balties
2. Applicability of Exemption Notification
3. Determination of Duty and Penalty

Detailed Analysis:

1. Classification of Aluminium Balties:
The primary issue was whether the aluminium balties used by M/s. Shiv Raj Tobacco Co. for packing pan masala should be classified as "aluminium containers" under Tariff Item 27(f) or as "aluminium utensils" under Tariff Item 68. The Collector of Central Excise, Kanpur, concluded that the balties were aluminium utensils, not containers, based on their predominant use and the fact that they were classified as utensils before clearance. The Tribunal upheld this, noting that the embossing of "Chaman Bahar" did not alter their classification. The opposing view argued that the balties were specifically manufactured and used for packing, thus should be classified as containers.

2. Applicability of Exemption Notification:
The aluminium balties were deemed eligible for exemption from duty under Notification No. 244/77 and No. 234/82, which covered utensils made of aluminium. The Collector and the Tribunal both agreed that since the balties were classified as utensils, they were exempt from duty. The opposing argument suggested that the exemption should not apply as the balties were used as containers for packing pan masala, thus falling under Tariff Item 27(f).

3. Determination of Duty and Penalty:
The show cause notice issued proposed the levy of duty and penalties on M/s. Shiv Raj Tobacco Co., M/s. Shukla Rajaram concern, and M/s. Mauji Lal Metal Works. The Collector dropped the proceedings against all respondents, holding that the balties were correctly classified as utensils and were exempt from duty. The Tribunal upheld this decision, rejecting the appeal by the Revenue. The opposing view argued that the Collector should have confirmed the demands and imposed penalties, invoking the extended period of five years due to alleged suppression of facts by the manufacturers.

Conclusion:
The Tribunal upheld the Collector's decision that the aluminium balties were classified correctly under Tariff Item 68 as utensils and were eligible for exemption from duty under the relevant notifications. The appeal by the Revenue was dismissed.