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1998 (7) TMI 176 - AT - Central Excise
Issues:
1. Classification of phenol formaldehyde resins - CET 3909.51 vs. chemically modified resin under CET 3909.59. 2. Limitation period for demand. Classification Issue: The dispute revolved around the classification of phenol formaldehyde resins manufactured by the appellant. The Chemical Examiner's report confirmed the product as a chemically modified phenol formaldehyde resin. The appellants argued for classification under CET 3909.51, benefiting from a concessional duty rate. However, Note 14 to Chapter 39 guided that chemically modified polymers are classified under the same heading as unmodified polymers if not specifically covered elsewhere. Consequently, the product was classified under CET 3909.59 as "other phenol formaldehyde resins." Limitation Issue: Regarding the limitation period for demand, the period in question was from 1-9-1989 to 12-11-1990, with the show cause notice issued on 7-8-1991. The appellants claimed lack of knowledge about the product's classification, believing it to be under CET 3909.51. They argued against the extended limitation period, citing approval of classification lists and disclosure of raw materials. However, the tribunal found their arguments unconvincing. The appellants were deemed aware of the product's true nature as a chemically modified resin, attempting to benefit from a lower duty rate under false pretenses. The deliberate misclassification was seen as an act of concealment, justifying the extended limitation period and penalty imposition. The tribunal upheld the original order, rejecting the appeal based on these findings.
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