1999 (10) TMI 160 - AT - Central Excise

Summary

Issues:
Classification of goods under Central Excise Tariff - Allegation of misdeclaration and suppression of facts - Time bar for raising demand.

Classification of Goods:
The appellants, manufacturers of laminated non-wovens, were paying duty under sub-heading 56.03 of the Central Excise Tariff. A Show Cause Notice alleged misclassification under sub-heading 3920.37, leading to a demand for over Rs. 24 lacs for the period 1989-90 to 1991-92. The appellants argued no suppression or misdeclaration, as duty was paid at approved rates. They contended that classification is the responsibility of the authorities and cited a Supreme Court decision that the extended period under Section 11A does not apply without suppression or misdeclaration. The Collector held the correct classification was under 3920.37 due to polyester film predominance and accused the appellants of suppression and misdeclaration.

Allegation of Misdeclaration and Suppression:
The appellants reiterated their argument on the time bar, stating they correctly described goods as laminated non-wovens in classification lists approved by authorities. They claimed that the issue arose only after a chemical test in 1992, leading to conflicting Show Cause Notices on classification. The appellants emphasized that they acted in good faith, with no intent to evade duty, as they followed approved classification lists and had no duty to disclose further details unless requested by the authorities. The Tribunal found the allegation of misdeclaration or suppression unsustainable, as clearances were under approved lists and duty was paid accordingly.

Time Bar for Raising Demand:
The Tribunal reviewed the case records and submissions, concluding that the demand was time-barred. It noted that goods were always cleared under approved lists, and duty was paid as per those lists. The Tribunal emphasized that if authorities required additional details, they should have requested them before approving the classification lists. As the authorities failed to do so, the allegation of misdeclaration or suppression was deemed unsustainable. The Tribunal held that no demand could be raised for the extended period, overturning the Collector's decision. The appeal was allowed on the grounds of the time bar, granting consequential relief to the appellant as per the law.