1998 (9) TMI 211 - AT - Central Excise

Summary

Issues:
1. Demand of duty on Corn Flour and Glucose-D.
2. Corrigendum changing the classification of Glucose-D.
3. Allegations of suppression and misstatement.
4. Applicability of time limitation for duty demand.

Analysis:

1. Demand of Duty on Corn Flour and Glucose-D:
- The appeal challenged the duty demand on Corn Flour under Tariff Heading 1901.19 and Glucose-D under Heading 1702.19 for the period 1-3-1986 to 31-3-1988. The appellant argued that no manufacturing was involved, and they only repacked duty-paid starch. They cited previous decisions to support their claim that no new excisable commodity was manufactured. The department contended that the products were different and duty was correctly demanded. The Tribunal found in favor of the appellant regarding Corn Flour, as no manufacturing process was conducted, and the duty demand was hit by time limitation.

2. Corrigendum Changing the Classification of Glucose-D:
- A corrigendum changed the classification of Glucose-D from Heading 1702.19 to 1702.29. The appellant argued that such a change was impermissible as it altered the original classification. The department argued that correct classification was essential, and the change was valid. The Tribunal analyzed the products' composition and found discrepancies in classification. The issue was that the correct classification depended on the percentage of anhydrous dextrose, which was not determined. The Tribunal noted a conflict with a trade notice and concluded that the issue required factual assessment.

3. Allegations of Suppression and Misstatement:
- The appellant denied suppression or misstatement, asserting they had a genuine belief that their products were not excisable. They argued that the classification lists were duly approved by the department, and no basis existed for allegations of suppression. The department contended that the longer time limit applied due to suppressed information in the classification list. The Tribunal found in favor of the appellant, stating that the plea was valid, and the appeal succeeded on these grounds.

4. Applicability of Time Limitation for Duty Demand:
- The appellant raised a plea of limitation, stating that the show cause notice was time-barred for most of the period. The department argued that the circular guiding the appellant was not valid under the new tariff. The Tribunal considered the time limitation issue, finding that clearances made before six months from the notice date were time-barred. The duty demand on Corn Flour was also found to be hit by time limitation for clearances made more than six months prior to the notice.

In conclusion, the Tribunal allowed the appeal based on the merits presented by the appellant regarding Corn Flour and the time limitation constraints on duty demands for both Corn Flour and Glucose-D. The issue of classification discrepancies for Glucose-D required further factual assessment due to conflicting information and the absence of specific compositional data.