1999 (1) TMI 151 - AT - Central Excise

Summary

Issues: Classification of goods in dispute, Duty liability on bought out items, Limitation

Classification of goods in dispute:
The judgment revolves around the classification of pre-fabricated buildings under CET sub-heading 9406.00. The appellants contended that they supplied only parts and components, not complete buildings. However, the Tribunal found that the appellants supplied complete shelters as per the contract with the Army, including roofing and warranty certificates. The Tribunal held that the goods in question are indeed pre-fabricated buildings falling under CET sub-heading 9406.00, even if supplied in a knocked-down condition for assembly on-site.

Duty liability on bought out items:
The Tribunal addressed the duty liability on bought out items within pre-fabricated buildings. It clarified that once a complete pre-fabricated building is confirmed, duty is charged on the entire goods without bifurcation between manufactured and bought out items. The judgment distinguished previous cases where the value of accessories or non-essential items was not included in the assessable value, emphasizing that in this case, bought out items were essential components of the pre-fabricated buildings, thus necessitating their inclusion in the assessable value.

Limitation:
Regarding the limitation issue, the Tribunal analyzed the show cause notice covering the period from 1986-87 to 1988-89. The notice alleged mis-declaration and intention to evade duty payment. The Tribunal held that the extended period of limitation applied due to mis-description and mis-classification of goods, allowing the Department to proceed. It differentiated this case from precedents where intentional evasion was not proven or where correct information was disclosed. The judgment upheld the applicability of the proviso to Section 11A of the Central Excise Act, 1944, due to the appellants' failure to disclose the manufacturing and clearance of pre-fabricated buildings.

In conclusion, the Tribunal upheld the duty demand, confiscation, and penalty imposed by the Additional Collector of Central Excise. The case was remanded to the Assistant Commissioner for verification of the appellants' claim for Modvat credit, with a direction to re-quantify the duty after extending credit, if applicable, and providing the appellants with a reasonable opportunity to be heard.