1998 (9) TMI 303 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the products in dispute.
2. Limitation on the demands raised.
3. Retrospective operation of revision of classification.

Detailed Analysis:

1. Classification of the Products in Dispute:
The primary issue was the classification of paper cups, both printed and unprinted, used for packaging/serving various items under the Central Excise Tariff Act, 1985. The assessees initially claimed classification under sub-heading 4819.19, chargeable to nil rate of duty. However, the Assistant Collector advised them to classify under CET sub-heading 4823.90, which was done under protest. Later, the classification was changed to 4819.12, chargeable to 35% duty, on the grounds that the assessees had not provided complete information. The Collector (Appeals) upheld the classification of printed paper cups with lids under CET sub-heading 4819.12, unprinted cups with lids under sub-heading 4819.19, and other cups without lids under sub-heading 4823.90. This classification was based on the Supreme Court's judgment in G. Claridge & Company Ltd. v. Collector of Central Excise, Pune, which defined "containers" broadly to include packing containers used for storage and transportation of articles.

2. Limitation on the Demands Raised:
The Collector (Appeals) held that the demands were barred by limitation, noting that the assessees had been filing regular declarations and the manufacturing process had been examined by the Department. The assessees had disclosed the use of printed pulp board as raw material since 1986, and the Department had verified this information. The show cause notices issued did not initially allege suppression of facts. The extended period of limitation was invoked only in the notice dated 9-10-1990. The Tribunal found that there was no suppression or misdeclaration with intent to evade duty, as the assessees had complied with the Department's directions and filed classification lists under CET sub-heading 4823.90 as instructed. Therefore, the demands were held to be time-barred.

3. Retrospective Operation of Revision of Classification:
The appeals filed by the Revenue did not address the question of whether a demand could be raised retrospectively from the date of the show cause notice. The Tribunal did not delve into this issue, as it was not contested by the Revenue.

Conclusion:
The Tribunal upheld the classification of printed paper cups with lids under CET sub-heading 4819.12, unprinted paper cups with lids under CET sub-heading 4819.19, and other cups without lids under CET sub-heading 4823.90. It also held that the demands raised were barred by limitation due to the absence of suppression or misdeclaration by the assessees. Consequently, the penalties imposed were set aside, and the appeals were disposed of accordingly.