1999 (3) TMI 175 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the goods.
2. Invocation of the extended period for demanding duty.
3. Imposition of penalties on the manufacturers and other persons.

Summary:

Classification of the Goods:
The appellants, M/s. Fitrite Packers, contended that their printed plastic films should be classified under Chapter 49, which is chargeable to nil rate of duty, rather than Chapter 39. They argued that the printing of designs, logos, etc., was essential for identifying the product and its primary use, making it a product of the printing industry rather than the packaging industry. The Tribunal agreed with the appellants, referencing several judgments, including Parle Products Ltd. v. Union of India, which held that processes like printing and slitting do not amount to manufacture. The Tribunal concluded that the goods were more appropriately classifiable under Chapter 49.

Invocation of the Extended Period for Demanding Duty:
The appellants argued that there was no suppression, mis-statement, or mis-declaration on their part, and they acted on a bona fide belief that no excise duty was payable. The Tribunal found merit in this argument, noting that the appellants had applied for a license and paid duty under protest, indicating their compliance with the law.

Imposition of Penalties:
The penalties imposed on Shri Sunil Dalal and Ms. Usha Mehta were contested. The Tribunal found that Shri Dalal was not directly involved in the day-to-day operations of M/s. Fitrite Packers, and Ms. Mehta was not associated with Central Excise matters. Therefore, the penalties imposed on them were deemed unsustainable in law.

Conclusion:
The Tribunal allowed the appeals, setting aside the impugned order. The goods were classified under Chapter 49, and the penalties imposed on the individuals were revoked.