1999 (1) TMI 114 - AT - Central Excise

Summary

Issues: Classification of goods under Chapter sub-heading 5901.10, backfilling process vs. coating process, limitation aspect regarding declaration of goods and use of glue and starch in the manufacturing process.

Classification under Chapter sub-heading 5901.10: The Appellants had not declared book-binding cloth manufactured by them in their Classification list and were clearing it under Chapter sub-heading 5206.31. The Chemical Examiner confirmed that the goods were of the description of Chapter sub-heading 5901.10. The Collector (Appeals) held that the goods were classifiable under Chapter sub-heading 5901.10. The Appellants argued that backfilling was not the same as coating, and since they were using backfilling and not coating, the goods should be classified under Chapter Heading 5206.31. However, the experts confirmed that the product was coated with glue and starch, making it classifiable under Chapter sub-heading 5901.10 used for book binding.

Backfilling vs. Coating Process: The Appellants claimed that backfilling was distinct from coating, citing exemption notifications. They argued that since they were only undertaking the process of backfilling and not coating, the goods should be classified under Chapter Heading 5206.31. The Department contended that the fabric was coated with glue and starch, not disclosed in the classification list, indicating suppression to evade duty. The Tribunal found that the product was indeed coated with glue and starch, suitable for book binding, falling under Chapter sub-heading 5901.10.

Limitation Aspect: The Appellants asserted that they declared the goods properly in their classification list, specifying the processes undertaken by them. They claimed that the Department was aware of the processes, and any demand beyond six months was time-barred. However, the Department argued that the Appellants did not disclose the use of glue and starch in the manufacturing process, indicating suppression. The Tribunal found no mention of backfilling or the use of glue and starch in the classification list, supporting the Department's argument that the demand was not time-barred due to the lack of disclosure.

Judgment: After considering the submissions, the Tribunal upheld the lower authorities' classification of the goods under Chapter sub-heading 5901.10, given the coating with glue and starch for book binding. On the limitation aspect, the Tribunal found that the Appellants failed to disclose crucial information in their classification list, leading to a clear case of suppression. Consequently, the Tribunal upheld the impugned order and rejected the Appeals, emphasizing the importance of accurate disclosure and classification in customs matters.