1997 (8) TMI 292 - AT - Central Excise

Summary

Issues:
Classification and clearance of Ibuprofen I.P., Time-barred demand, Imposition of penalty

Classification and clearance of Ibuprofen I.P.:
The appellants, manufacturers of drugs and medicines, filed classification lists declaring Ibuprofen I.P. under Heading 3003.20 for assessment, approved by the Assistant Collector. The Central Excise Officers later alleged misclassification under 2907.90 instead of 3003.20, denying the nil rate of duty benefit under Notification No. 234/86. The appellants argued they acted in good faith, believing the items were medicaments used as analgesic medicines. They contended that since their classification lists were consistently approved, they had no reason to believe they erred. The Tribunal noted the absence of evidence of mala fide intention and held that only the normal period of limitation applied to the Department. The appellants' entitlement to exemption under the notification, subject to a Drug Controller's certificate, was not fully addressed but deemed unnecessary for the decision.

Time-barred demand:
The appellants argued that the demand was time-barred due to the absence of suppression or misstatement on their part. They contended that the Department should have raised objections earlier if there was an issue with the classification. The Tribunal agreed, noting that the Department failed to provide specific reasons for invoking the extended period of time. Citing precedent cases, the appellants sought to have the demand considered time-barred, which the Tribunal accepted.

Imposition of penalty:
The appellants challenged the imposition of a penalty, arguing that there was no justification provided by the Department. The Tribunal concurred, finding no basis for imposing a penalty in the absence of sufficient justification from the Department. Consequently, the impugned orders were set aside, and the appeal was accepted.