1998 (7) TMI 252 - AT - Central Excise

Summary

Issues:
1. Classification of printing and writing paper under CET sub-headings.
2. Calculation of bagasse pulp content and duty demand.
3. Bar on limitation for duty demand.
4. Interpretation of Board's Circular and Notification for classification.

Classification of Printing and Writing Paper:
The appeal pertains to the classification of printing and writing paper manufactured by the appellants, with the Collector confirming a duty demand based on the classification under CET sub-heading 4802.99 instead of sub-heading 4802.10. The duty demand was upheld due to the paper being determined to contain less than 75% bagasse pulp content, which attracts a nil rate of duty. The appellants argued that ash content should be deducted to reach the required bagasse pulp content percentage, contending that ash is a filler. However, the Adjudicating authority rejected this argument, citing that the ash content remains constant throughout the paper's manufacturing stages. The Collector referred to Board's Circular and Notification, concluding that ash content cannot be deducted for classification.

Calculation of Bagasse Pulp Content and Duty Demand:
The appellants asserted that the duty demand was time-barred as there was no deliberate misstatement or suppression on their part. They maintained that they had provided necessary information to the department, including monthly returns on bagasse pulp consumption and classification lists. The Collector's finding highlighted an "escapement of duty due to wrong method of calculation" for determining bagasse pulp content, without accusing the appellants of intentional misstatement or suppression to evade duty payment. No penalty was imposed on the appellants.

Bar on Limitation for Duty Demand:
The appellants argued that the demand was beyond the limitation period specified under the Central Excise Act, as there was no deliberate misstatement or suppression on their part. The Tribunal noted that the Collector did not find any intentional suppression or misstatement by the appellants, thereby upholding that the demand was indeed barred by limitation. Consequently, the demand was set aside, and the appeal was allowed without delving into the merits of the case.

Interpretation of Board's Circular and Notification for Classification:
The learned SDR reiterated the findings emphasizing that the Board's Circular and Notification were irrelevant for the current demand, which solely relied on the classification under sub-heading 4802.99. The rejection of the classification claimed by the appellants under sub-heading 4802.10 was based on the paper containing less than 75% bagasse pulp content. The Tribunal, after considering the submissions, held that the demand was time-barred and set it aside without further examination of the merits.