1997 (7) TMI 441 - AT - Central Excise

Summary

Issues:
Classification of goods under tariff Heading 84.71 or 84.79, Invocation of longer period of limitation, Applicability of SSI exemption notifications.

Detailed Analysis:
The appeal concerns the classification of goods described as "tackle" under either Heading 84.71 or Heading 84.79. The lower authority classified the goods under Heading 84.71, considering the technical literature describing the goods as an information processor capable of storing, processing, and transferring data. The literature highlighted the goods' functions, including compatibility with IBM computers, modems, and printers. The lower authority analyzed the scope of tariff headings under chapter notes and concluded that the goods fell under Heading 84.71, which covers automatic data processing machines. The appellants argued for classification under Heading 84.79, claiming the goods were not digital machines. However, the tribunal held that the goods met the criteria for classification under Heading 84.71 based on their technical specifications and functions as information processors.

The appellants presented a technical opinion highlighting the differences between a computer and the tackle in question. The technical opinion emphasized that the tackle had limited functionality, fixed programs, and no user-modifiable features, contrasting it with general-purpose computers. The appellants argued that the goods should not be classified as digital machines under Heading 84.71 based on the technical distinctions presented. However, the department contended that the goods exhibited features of digital machines and should be classified under Heading 84.71. The tribunal agreed with the department's classification, considering the goods' information processing capabilities and compatibility with computer systems and peripherals.

Regarding the invocation of the longer period of limitation and the applicability of SSI exemption notifications, the appellants claimed they believed the goods were assessable under Heading 84.79 and eligible for SSI exemptions. However, they failed to file the necessary declarations for claiming the SSI benefits, indicating a reluctance to comply with excise duties. The tribunal upheld the invocation of the longer period of limitation due to the appellants' failure to provide the required declarations, affirming the duty demand and penalty imposed. The penalty amount of Rs. 10,000 was deemed appropriate given the circumstances. The tribunal upheld the duty demand while allowing any available abatement for the appellants in calculating the duty amount.

In conclusion, the tribunal ruled in favor of classifying the goods under Heading 84.71 as automatic data processing machines based on their technical specifications and functions as information processors. The invocation of the longer period of limitation was upheld due to the appellants' failure to comply with SSI exemption requirements, leading to the affirmation of duty demand and penalty.