1999 (3) TMI 164 - AT - Central Excise

Summary

Issues: Classification of goods under Heading 39.23 or 85.23, eligibility for benefit of notifications, penalty determination for employees involved in duty evasion.

Classification of Goods:
The judgment concerns the classification of video cassette housings under Heading 39.23 or 85.23 of the Tariff. The Collector had classified the housings under Heading 85.23 as parts of video cassette tapes, while the appellant argued for classification under Heading 39.23 as articles of packing or conveyance. The tribunal found that the housings, being supports for tapes, should be classified under Heading 39.23 as articles of plastic, based on the Explanation Notes to the Harmonised System and the purpose of the housings to protect and support the magnetic tape. This classification entitles the appellant to the benefit of specific notifications.

Eligibility for Benefit of Notifications:
The appellant contended that if the goods are classified under Heading 39.23, they would be eligible for the benefit of certain notifications, subject to fulfilling specified conditions. The tribunal agreed that the benefit of the notification would be available if the conditions, such as using specified duty paid raw materials or plastic scrap, are met. The appellant expressed readiness to demonstrate compliance with these conditions before the Commissioner.

Penalty Determination:
Regarding penalty determination for employees involved in duty evasion, the tribunal noted that the Commissioner's order lacked detailed reasoning on the extent of involvement of each employee. It was emphasized that the liability to penalty and the quantum thereof require thorough consideration. The tribunal directed the Commissioner to reevaluate the penalty, taking into account the value of goods and duty paid thereon, based on the eligibility for the notification. The Commissioner was instructed to provide reasoned findings on the liability to penalty for each employee, ensuring a fair and comprehensive assessment.

Conclusion:
In conclusion, the tribunal allowed the appeal, classifying the goods under Heading 39.23 and remanding the matter to the Commissioner for further determination. The Commissioner was tasked with assessing the eligibility for the notification, calculating the duty payable, and reconsidering the penalty, if applicable, for the employees involved in the duty evasion. The appellant was given an opportunity to present relevant material within two months for the Commissioner to make informed decisions in accordance with the law.