1998 (4) TMI 271 - AT - Central Excise

Summary

Issues:
1. Classification of Duco Putty under Tariff Heading 32.14 as Painters Fillings or under Tariff sub-heading 3208.30.
2. Whether the demand of duty proposed by a show cause notice dated 15-1-1991 is barred by time.

Analysis:
1. The primary issue in this case was the classification of Duco Putty under Tariff Heading 32.14 as Painters Fillings, as claimed by the appellant, or under Tariff sub-heading 3208.30 as assessed by the lower authority. The adjudicating authority emphasized the composition of the material, stating that the essential characteristic of paints is a free-flowing liquid with fine particles in a liquid medium. However, the appellant argued that the assessment should be based on the product's condition when removed from the factory. The Tribunal agreed with the appellant, ruling that the product falls under Tariff Heading 32.14 as Painters Fillings, not 3208.30 as contended by the lower authority.

2. The second issue pertained to the time limitation for the demand of duty. The appellant argued that the Department was aware of the nature and composition of the product, as evidenced by various documents, and thus the demand was time-barred. The adjudicating authority had invoked Section 11A proviso due to alleged mis-declaration by the appellant. However, the Tribunal disagreed, noting the difference between Duco Putty and Putty and ruling that the demand of duty was indeed barred by time. Consequently, the penalty imposed was also set aside.

In conclusion, the appeal was allowed in favor of the appellant, with the Tribunal ruling in their favor on both the classification issue and the time limitation for the demand of duty.