2000 (10) TMI 249 - AT - Central Excise

Summary

Issues:
1. Classification of goods for Central Excise duty.
2. Imposition of penalty under Rule 57F(1)(ii) of the Central Excise Rules.

Classification of goods for Central Excise duty:
The appellants were involved in manufacturing spools for motor vehicles and availing Modvat credit on inputs as per Rule 57A of the Central Excise Rules. The Department alleged that the appellants misclassified their products under Chapter sub-heading No. 8448.00, attracting a lower duty rate, instead of Chapter sub-heading No. 3923.90, which had a higher duty rate. The duty short-paid was estimated at Rs. 1,39,131.00, leading to a show cause notice proposing the recovery of the differential duty amount. The Assistant Commissioner confirmed the duty demand under Section 11A of the Central Excise Act, which was upheld by the Commissioner (Appeals). The Tribunal examined the impugned order and relevant records, ultimately upholding the duty demand based on the fresh classification of the product under Chapter sub-heading No. 3923.90, enforceable under Section 110 of the Finance Act, 2000.

Imposition of penalty under Rule 57F(1)(ii) of the Central Excise Rules:
The penalty of Rs. 5,000.00 was imposed on the appellants for violating Rule 57F(1)(ii) of the Central Excise Rules. However, it was noted that the shortage of LDPE Granules in the appellants' factory, as found by Central Excise officers, was admitted by the appellants. They had also reversed the Modvat credit of the duty paid on such inputs before the issuance of the show cause notice. Consequently, the Tribunal found no justification for imposing any penalty in this regard. Therefore, the Tribunal confirmed the duty demand but set aside the penalty, disposing of the appeal accordingly.