1999 (12) TMI 244 - AT - Central Excise

Summary

Issues: Application for waiver of deposit of duty and penalty under Section 11AC of the Act based on classification of glassware under heading 7012.10 or 70.15 of the tariff, contention on limitation, classification of goods under heading 7017 of the Explanatory Notes to the Harmonised System of Nomenclature (HSN), determination of industrial glassware, intention to evade duty, and evidence on record regarding the use of goods.

Analysis:

1. Classification of Goods and Contention on Limitation:
The advocate for the applicant argues that the goods manufactured conform to the description under heading 7017 of the HSN, corresponding to heading 7012 of the Indian tariff, regardless of their use in a laboratory. He emphasizes that the definition of "laboratory" includes places of manufacture, such as pharmaceutical production sites. The applicant had previously declared and cleared goods under heading 7012.10 without any objection from the department, indicating a strong case on limitation. The basis for invoking the extended period due to the non-submission of monthly returns is challenged, along with the allegation of incorrect classification under different headings.

2. Departmental Representative's Contention on Industrial Glassware:
The departmental representative argues that the Notes to heading 7017 of the HSN exclude industrial glassware, and the determination of industrial glassware depends on design and intended use. The contention is made that the goods were supplied for production, suggesting an intention to evade duty.

3. Merits of the Issue and Prima Facie Conclusion:
The judgment notes that the Explanatory Notes to Heading 7017 do not define laboratory hygienic pharmaceutical glassware but cover glass articles commonly used in laboratories. It is suggested that heading 7012 would cover articles generally used in laboratories, not those used in production facilities. The determination of whether the factory constitutes a laboratory for the purpose of heading 7012 is to be based on evidence regarding the use of goods.

4. Decision and Direction for Deposit:
Despite the contentious issues, the applicant had declared and cleared goods under heading 7012, bringing it to the department's attention. No evidence suggests that the applicant knowingly misrepresented the goods as laboratory glassware. The judgment directs the applicant to deposit a specified amount within a month, waiving the remaining duty and penalty, and staying their recovery.

5. Compliance:
The judgment specifies a compliance date for the applicant to fulfill the deposit directive.

In conclusion, the judgment addresses the classification of goods, limitation issues, determination of industrial glassware, intention to evade duty, and the evidence presented regarding the use of goods, ultimately directing the applicant to make a specified deposit while waiving the remaining duty and penalty.