2000 (9) TMI 341 - AT - Central Excise

Summary

Issues: Classification of goods under Central Excise Tariff Act, imposition of penalty for misdeclaration, scope of show cause notice regarding penalty imposition.

Classification of Goods: The appellant, a manufacturing company, classified certain electronic components as Motor Vehicle Parts under heading 87.14 of the Central Excise Tariff Act. They had filed classification lists approved by the department, but the Adjudicating Authority reclassified the goods under Chapter 85, leading to a demand for differential duty and penalty imposition. The Commissioner (Appeals) remanded the matter for recalculating demands but upheld the penalty, stating that the appellant revised the classification to avoid duty. The appellant argued that they classified the goods correctly as they were used in their scooter unit as components of two-wheelers.

Imposition of Penalty: The Department imposed penalties on the appellant for alleged misdeclaration in classification lists to pay lower duty rates. The appellant contended that they did not conceal any information and classified the goods as per their understanding, hence penalty imposition was unjustified. The Department argued that the penalty was rightly imposed due to misdeclaration.

Scope of Show Cause Notice: The appellant argued that the penalty imposed under Order No. 46/99 was beyond the show cause notice's scope as it did not mention penalty imposition. They also contended that even in cases where penalty was proposed, it was not justified as there was no intentional misdeclaration on their part. The Department maintained that penalties were correctly imposed due to misdeclaration in classification lists.

Judgment: The Tribunal found that the appellant's classification of goods as Motor Vehicle Parts was consistent and approved by the department in the past. Merely classifying the goods differently from the Department did not imply intentional misdeclaration. The Tribunal held that the penalty imposed exceeded the show cause notice's scope and was not justified in the absence of intentional misdeclaration. Consequently, the penalties imposed by the Adjudicating Authority and confirmed by the Commissioner (Appeals) were set aside, and both appeals were allowed.