2000 (3) TMI 467 - AT - Central Excise

Summary

Issues: Classification of goods for duty liability under extended period, Benefit of notification 175/86 for small scale units, Cross-examination of witness, Manufacturing operations, Duty classification under Tariff headings

In this judgment by the Appellate Tribunal CEGAT, Mumbai, the issues involved are as follows:

1. Classification of goods for duty liability under extended period:
The Collector had classified various articles manufactured by the assessee and held them liable to duty under the extended period as per the proviso to section 11A of the Act. A penalty of Rs. 30,000 was imposed under section 173Q. The Tribunal found that the Collector's decision was based on the classification of goods, and the duty quantification was left to be determined by the assessment Collector.

2. Benefit of notification 175/86 for small scale units:
The department questioned the extension of notification 175/86, arguing that the factory in Bombay was not registered as a small scale unit undertaking as required by the notification. The Tribunal observed that the benefit of the notification was available only to factories registered with the Director of Industries, and since the Surat factory was not registered, the benefit was not applicable. The Tribunal held that the benefit of the notification was not available to the assessee.

3. Cross-examination of witness:
The appellant contended that the cross-examination of a witness, Tilak, was not granted, but the Tribunal found no indication of why the cross-examination was necessary or how its absence would cause prejudice. The Tribunal rejected this ground.

4. Manufacturing operations:
The appellant claimed that they did not manufacture goods in the factory but only carried out repair, finishing, and assembling operations. However, the Tribunal noted that many assembly operations resulting in a new product amount to manufacturing. The evidence presented, including a statement by the appellant's partner admitting to manufacturing goods, did not establish that manufacturing did not take place. The Tribunal found no sufficient grounds to interfere with this finding.

5. Duty classification under Tariff headings:
The Collector classified goods under specific Tariff headings, which were not challenged in the appeal. However, the classification of other goods under different headings was contested. The Tribunal found that the reasons given by the Collector for classification were not adequately supported. It set aside the classification of these goods and ordered a redetermination according to law, confirming the penalty imposition for non-payment of duty.

In conclusion, the Tribunal allowed one appeal and partially allowed another, setting aside the classification of certain goods for redetermination while confirming the penalty imposition for non-payment of duty on those goods.