1999 (12) TMI 642 - AT - Central Excise

Summary

Issues:
1. Approval of classification of PCM-MUX under different tariff headings.
2. Provisional assessment and classification under Chapter Heading 85.17.
3. Recovery of differential duty and penalty imposition.
4. Misdeclaration of goods and extended period of limitation.
5. Applicability of Supreme Court decision on limitation period.
6. Upholding the impugned order and rejecting the appeal.

Issue 1: Approval of classification of PCM-MUX under different tariff headings
The appellants sought approval for the classification of PCM-MUX under various tariff headings, initially under Tariff Heading 85.42 and later under Chapter Heading 85.29. Multiple classification lists and corresponding price lists were filed seeking approval, with some lists remaining unapproved while others were approved. The classification of the product was a subject of dispute and led to subsequent provisional assessment and eventual acceptance under Chapter Heading 85.17.

Issue 2: Provisional assessment and classification under Chapter Heading 85.17
Following the dispute over the classification of PCM-MUX, provisional assessment was ordered, and a show cause notice was issued proposing a different classification under Chapter Heading 85.17, attracting a higher duty rate. The appellants accepted this classification and started paying duty accordingly. However, a subsequent notice was issued for the recovery of differential duty and penalty imposition due to the discrepancy in the duty paid.

Issue 3: Recovery of differential duty and penalty imposition
A show cause notice was issued proposing the recovery of a substantial amount of differential duty and the imposition of a penalty under the Central Excise Rules due to the appellants' failure to pay duty at the correct rate for PCM-MUX. The Collector of Central Excise confirmed the duty demand but refrained from imposing a penalty due to the appellant being a Government undertaking, leading to the appeal.

Issue 4: Misdeclaration of goods and extended period of limitation
The appellants were found to have misdeclared the goods in the classification list, leading to evasion of duty at a higher rate applicable to goods under a different heading. This misdeclaration invoked the extended period of limitation of 5 years under the Central Excise Act, enabling the Department to pursue the recovery of the duty owed.

Issue 5: Applicability of Supreme Court decision on limitation period
The decision of the Supreme Court in a similar case was cited, but it was deemed inapplicable to the present situation where the demand was raised under the proviso to Section 11A, establishing fraud, suppression, or misdeclaration against the appellants. The Court differentiated the circumstances of the cases and upheld the invocation of the extended limitation period in the present case.

Issue 6: Upholding the impugned order and rejecting the appeal
Considering the findings and circumstances, the Tribunal upheld the impugned order, rejecting the appeal as the appellants did not contest the classification of PCM-MUX under Chapter Heading 85.17 during the relevant period. The decision was based on the misdeclaration of goods, the extended limitation period, and the absence of a challenge to the classification previously accepted by the appellants.