1997 (1) TMI 322 - AT - Central Excise

Summary

Issues: Classification of goods for Central Excise Duty exemption under Notification No. 73/86-C.E., imposition of penalties on various parties, limitation period for duty demand.

Classification of Goods:
The case involved 12 appeals challenging an order-in-original by the Addl. Collector of Central Excise, Aurangabad, regarding the classification of components of toys manufactured by a company as "sports goods" eligible for exemption under Notification No. 73/86-C.E. The goods were supplied to another company for making toys. The Tribunal found that the components marketed as toys like saucer gun, bulls eye, and shoot out gun were not considered sports goods under the Central Excise Tariff. The Tribunal concluded that the goods were misclassified as sports goods and were actually toys, falling under different headings in the tariff.

Limitation Period and Wrong Declaration:
The adjudicating authority noted that the manufacturing company was aware that the components were used for making toys, not sports goods, and that the customer was manufacturing toys from these components. The authority found that the company wrongly declared the components as sports goods to avail exemption. The Tribunal upheld these findings, stating that there was no basis to interfere with the authority's conclusions on limitation and misdeclaration of goods.

Imposition of Penalties:
The duty amount involved was Rs. 60,452.17, with penalties imposed on the manufacturing company and other parties. The Tribunal reduced the penalty on the manufacturing company from Rs. 25,000 to Rs. 10,000, confirming penalties on the customer company and its Chairman. Penalties on other directors and the General Manager were set aside. The Tribunal justified the penalties based on the misdeclaration of goods and upheld the penalties on specific parties while reducing the penalty amount for the manufacturing company.

Conclusion:
The Tribunal confirmed the duty demand of Rs. 60,452.17 and modified the penalties imposed on the parties involved. The penalties were upheld for certain parties while others had their penalties set aside. The appeals were disposed of accordingly, maintaining the duty demand and penalties as modified by the Tribunal.