1998 (5) TMI 178 - AT - Central Excise

Summary

Issues:
Classification of products under different sub-headings, imposition of penalty, demand of duty, mala fide intention, time-barred demand, proper classification of goods, approval of classification lists, change in classification, larger period of limitation.

Classification of Products:
The appellants initially classified Card Pins, Gill Pins, and Double Taper Pins under sub-heading 7308.30 and later under Heading No. 7317.00. A revised classification list was filed claiming these items under sub-heading 8448.00. The Assistant Commissioner approved the revised classification under Heading 8448.00, noting lawful permission granted under a previous classification list.

Imposition of Penalty and Demand of Duty:
A show cause notice was issued for misdeclaration, alleging illegal exemption availed by classifying products under different headings. The demand for the period from 1-2-1987 to 28-2-1989 was dropped as time-barred. However, for the subsequent period, the demand was confirmed, citing mala fide intention to mislead the Department, resulting in a penalty and duty imposition.

Mala Fide Intention and Time-Barred Demand:
The appellants admitted the correct classification of Pins under Heading 84.48 and argued that changes in the classification list were made in good faith. The handwritten addition of "Drawing Pins" was explained as per the jurisdictional Central Excise Authorities' insistence, with no mala fide intent. The show cause notice issued in 1992 was deemed time-barred due to earlier approved classification lists.

Proper Classification of Goods and Approval of Lists:
The Tribunal noted that the typed description in the classification list matched earlier descriptions, indicating no mala fide intent. The approval of classification lists under Rule 173B is presumed to be after proper scrutiny by the officer. The appellants' voluntary change in classification in 1990 was accepted, and the show cause notice issued in 1992 was considered unjustified due to the lapse in time.

Change in Classification and Larger Period of Limitation:
The Tribunal found no justification for invoking a larger period of limitation, as the appellants' actions were in line with previous approvals and changes were made in good faith. The impugned order was set aside, and the appeal allowed on the point of limitation, emphasizing the importance of proper classification and timely actions by the authorities.