2000 (11) TMI 860 - AT - Central Excise

Issues: Classification of goods under different chapters, applicability of small scale exemption notification, duty liability on excess clearance, duty liability on Uninterrupted Power Supply System (UPSS), reduction of personal penalty.

Classification of Goods under Different Chapters:
The judgment revolves around the dispute regarding the correct classification of Line Conditioners by the appellants and the Revenue. The appellants claimed classification under Heading No. 8473.00, while the Revenue contended that they should be classified under Chapter 90. The Tribunal noted that the Revenue was aware of the appellants' classification claim from the beginning. Therefore, the Tribunal held that the Revenue could not restrict the benefit of the small scale exemption notification based on the classification issue, and the demand raised in 1993 was deemed unsustainable.

Applicability of Small Scale Exemption Notification:
The Tribunal analyzed the correspondence between the appellants and the Central Excise Authorities, establishing that the appellants' claim for classification of Line Conditioners was known to the Revenue. Consequently, the Tribunal ruled that the Revenue could not limit the benefit of the small scale exemption notification based on the appellants' proposed classification of Line Conditioners under Chapter 84 to avail the exemption benefits.

Duty Liability on Excess Clearance:
Regarding the clearance value exceeding Rs. 30 lac during different financial years, the Tribunal acknowledged that the appellants had indeed surpassed the limit in certain years. Even if the appellants were entitled to the exemption for the first clearance of Rs. 30 lac, they were still liable to pay duty on the excess clearance. The Tribunal emphasized that the appellants did not inform the Central Excise Authorities about the total clearance of their final product during various years, leading to the conclusion that limitation would not apply to the duty payment on the excess clearance.

Duty Liability on Uninterrupted Power Supply System (UPSS):
An additional issue arose concerning the duty on 38 pieces of UPSS manufactured and removed from another unit of the appellants under the same proprietorship. The value of these 38 pieces was already included in the total value of clearance from the appellants' factory. As the liability to pay duty on these pieces was not disputed, no further orders were necessary on this matter.

Reduction of Personal Penalty:
Lastly, the Tribunal addressed the personal penalty imposed on the appellants, which was reduced from Rs. 30,000 to Rs. 20,000 based on the reduction in duty liability. The Tribunal adjusted the penalty amount in line with the decreased duty amount. Consequently, the appeal was disposed of with the duty liability of the appellants to be recalculated after applying the first clearance benefit and the reduced penalty amount of Rs. 20,000.

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