1999 (6) TMI 196 - AT - Central Excise

Summary

Issues Involved:

1. Classification of processed glass products.
2. Validity of the show cause notices (SCNs) and demands.
3. Limitation period for issuing written demands.
4. Enhancement of duty and penalty on remand.

Issue-wise Detailed Analysis:

1. Classification of Processed Glass Products:

The appellants purchased plain glass sheets to manufacture various glass products. A classification dispute arose when excise duty was levied on their products under T.I. 68. The Tribunal and the Apex Court had previously upheld the classification of automobile toughened and laminated glasses under T.I. 68. The Collector (Appeals) later classified laminated safety glasses, toughened glasses, and insulating glass under T.I. 23A(4) and mirrors under T.I. 68. The appellants accepted the classification of mirrors under T.I. 68 but contested the classification of other processed glass items under T.I. 23A(4). The Tribunal, following the Apex Court's decision in Atul Glass Industries, confirmed that wind-screens, rear screens, and door screens should be classified under T.I. 68.

2. Validity of the Show Cause Notices (SCNs) and Demands:

The appellants argued that the allegations in the SCNs were based on assumptions without material evidence. They contended that the statements of dealers were not voluntary and that they were not allowed to cross-examine these dealers. The SCNs proposed demands under T.I. 23A(4) and T.I. 68. The Tribunal held that a demand of duty on a particular tariff item cannot be adjusted under a different tariff item, supporting the appellants' argument that the SCNs were invalid for proposing demands under different tariff items.

3. Limitation Period for Issuing Written Demands:

The appellants argued that the written demand for duty under Rule 9(2) of the Central Excise Rules, 1944, must be served within the time limit prescribed under Section 11A of the Central Excise Act, 1944. The Tribunal clarified that Section 11A and its proviso provide the machinery for determining the written demand after serving a show cause notice and considering representations. The Tribunal held that a show cause notice must be issued within 6 months or 5 years, as applicable, but the written demand does not need to be served within this period.

4. Enhancement of Duty and Penalty on Remand:

The appellants contended that the demand confirmed in the fresh adjudication proceedings exceeded the earlier confirmed demand, which was set aside and remanded by the Tribunal. The Tribunal held that on remand, the authority could not enhance the demand for duty or the amount of penalty, following the settled position in law. The Tribunal concluded that the demand for duty and penalty could not be enhanced beyond the amounts confirmed in the original order.

Conclusion:

The Tribunal allowed the appeal, holding that the demand of duty on a specific tariff item cannot be adjusted under a different tariff item, the written demand does not need to be served within the time limit prescribed for the show cause notice, and the demand for duty and penalty cannot be enhanced on remand. Consequential relief was granted to the appellants in accordance with the law.