1999 (3) TMI 152 - AT - Central Excise

Summary

Issues:
Classification of goods under sub-heading 87.16 for duty liability and penalty imposition based on the order-in-original by the Collector of Central Excise and Customs, Ahmedabad.

Analysis:
The appellants contended that they are manufacturers of plastic containers placed on mild steel trolleys for easy movement, emphasizing that the trolleys are not an integral part of the containers. They argued that they only manufacture plastic containers exempt from duty, citing a previous order by the Assistant Collector in their favor. Additionally, they claimed the demand was time-barred and the penalty unjustified.

The Departmental Representative argued that mounting containers on trolleys constitutes manufacturing a new product, changing the nomenclature and use of the goods. He maintained that the extended period was correctly invoked due to misclassification in the classification list.

Upon review, the Tribunal found that the appellants solely manufactured plastic containers for storage purposes, with the trolleys serving only for easy movement. The Tribunal noted that the containers and trolleys did not merge into a new product, as the containers could be placed and removed without alteration. It was established that the appellants were not manufacturing trailers or semi-trailers under sub-heading 87.16. The Tribunal also highlighted that the Department was aware of this fact, as evidenced by the earlier adjudication order. Consequently, the allegation of suppression of facts was deemed incorrect. The Tribunal ruled in favor of the appellants, setting aside the duty demand and penalty imposition, as the appellants were found to be manufacturing exempt plastic containers, not trailers or semi-trailers.