2000 (11) TMI 792 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the product under the Central Excise Tariff (CET).
2. Eligibility for exemption under Notification No. 80/90-C.E., dated 20-3-90.
3. Allegation of suppression of facts and invocation of the extended period of limitation.
4. Imposition of penalty under Rule 173Q of the Central Excise Rules, 1944.

Issue-wise Detailed Analysis:

1. Classification of the Product:
The primary issue was whether the product in dispute was an "anaesthetic trolley," classifiable under sub-heading No. 9402.00 of the CET as medical furniture, or an "anaesthetic machine," classifiable under sub-heading No. 9018.00 as an instrument used in medical sciences. The appellants described their product as an anaesthetic trolley and claimed it as furniture eligible for exemption. However, the adjudicating authority classified it as an anaesthetic machine. The product literature and features indicated that it had several components and functionalities beyond mere furniture, thus falling under the category of medical and surgical appliances.

2. Eligibility for Exemption:
The appellants argued that the anaesthetic trolley was specifically mentioned in Notification No. 80/90-C.E., dated 20-3-90, and thus eligible for exemption. They contended that their product was covered under Heading No. 94.02, which includes medical furniture. However, the tribunal found that the product was more than just a trolley; it was a complete anaesthetic machine with various medical apparatus, thus not eligible for the claimed exemption.

3. Allegation of Suppression of Facts and Limitation:
The appellants were accused of making incorrect statements and providing misleading descriptions in their classification lists. The adjudicating authority found that the appellants had described the product as a trolley while it was actually an anaesthetic machine, thus invoking the extended period of limitation under Section 11A of the Central Excise Act, 1944. The tribunal upheld this finding, noting that the appellants had failed to properly declare the product, amounting to suppression of facts.

4. Imposition of Penalty:
Given the misclassification and suppression of facts, a penalty of Rs. 25,000/- was imposed under Rule 173Q of the Central Excise Rules, 1944. The tribunal found the penalty justified in light of the appellants' failure to accurately describe their product and the subsequent evasion of duty.

Conclusion:
The tribunal concluded that the product was correctly classified as an anaesthetic machine under sub-heading No. 9018.00 and not as medical furniture under sub-heading No. 9402.00. The claim for exemption under Notification No. 80/90-C.E. was rejected, and the extended period of limitation was rightly invoked due to suppression of facts. The penalty imposed was also upheld. Consequently, the appeal was dismissed.