1998 (11) TMI 207 - AT - Central Excise

Summary

Issues: Classification of printed paper cups, Limitation, Eligibility for concessional duty under Notification 175/86, Penalty

Classification of printed paper cups:
The case involved the classification of printed paper cups manufactured by M/s. Gujarat Cup Company under CET sub-heading 4819.12. The lower appellate authority upheld the classification, and the Tribunal affirmed this decision, citing a judgment of the Apex Court. The Tribunal upheld the classification based on the precedent and rejected the appeal on this issue.

Limitation:
A show cause notice was issued proposing duty recovery on the grounds of misclassification and non-entitlement to exemption under Notification 175/86. The Collector imposed penalties on the manufacturer, partner, directors, and manager. However, the Tribunal held that the extended period of limitation was not applicable as there was no suppression or misdeclaration with intent to evade duty. The demand of duty on M/s. Gujarat Cup Company was deemed barred by limitation.

Eligibility for concessional duty under Notification 175/86:
The dispute revolved around the eligibility of the assessee for the benefit of a concessional duty rate under Notification 175/86. The assessee was registered as a small scale ancillary unit during the period in question and had obtained a certificate of registration. Following a Tribunal order and a subsequent case, the Tribunal extended the benefit of the notification to the assessee, considering the small scale ancillary unit as a Small Scale Industry (SSI) unit for availing the benefit.

Penalty:
Penalties imposed on the assessees were set aside as the duty demand was not sustained due to the limitation issue. The Tribunal ruled that since the Department failed to establish the duty demand, the penalties were deemed unsustainable. Consequently, the penalties imposed were overturned.

In conclusion, the Tribunal upheld the classification of printed paper cups, found the duty demand barred by limitation, extended the benefit of the concessional duty rate under Notification 175/86 to the assessee, and set aside the penalties imposed due to the unsustainable duty demand. The appeals were disposed of accordingly.