1997 (3) TMI 346 - AT - Central Excise

Summary

Issues:
1. Classification of goods as steel furniture under Central Excise Tariff.
2. Applicability of exemption Notification 217/86.
3. Time-barred notice for duty evasion.

Classification of Goods:
The appellant, a manufacturer of scooters and internal combustion engines, was charged with manufacturing steel furniture without observing procedural requirements and evading Central Excise duty. The Collector held that the goods were steel furniture under Tariff sub-heading 9403.00, rejecting the appellant's defense that the items were not furniture and were specially designed for use in the factory. The appellant argued that the goods were not marketable furniture and cited relevant court decisions. The Senior Departmental Representative supported the Collector's classification, citing Tribunal decisions and Explanatory Notes under Heading 94.03. The Tribunal found that the goods were used in relation to the manufacture of the final products and were entitled to the benefit of exemption Notification 217/86. The Tribunal disagreed with the Collector's reasoning and held that the goods did not fall under the excluded items in the Explanation Clause of Rule 57A. The appeal succeeded based on the applicability of the exemption, and the impugned order was set aside.

Applicability of Exemption Notification 217/86:
The appellant argued that the goods were entitled to the benefit of exemption Notification 217/86, which the Collector had rejected on the grounds that the goods were not used in relation to the manufacture of the final products. The Tribunal disagreed with this reasoning, holding that the items were indeed used in or in relation to the manufacture of the final products. The Tribunal clarified that the exclusion provision in the Explanation Clause of Rule 57A did not apply to the goods in question, as they were not machines, machinery, or appliances used for producing or processing goods. The Tribunal referenced a previous decision where material handling equipment was not considered an excluded item under the notification, as it did not produce or process goods. Consequently, the Tribunal allowed the appeal based on the applicability of the exemption Notification 217/86.

Time-Barred Notice for Duty Evasion:
The appellant contended that the notice for duty evasion was time-barred as there was no intent to evade duty, and the extended period of limitation should not apply. However, the Tribunal did not address this issue explicitly in its judgment, as the appeal succeeded based on the classification of goods and the applicability of the exemption notification.

---