2002 (9) TMI 644 - AT - Central Excise

Summary

Issues:
1. Classification of Bulk Mix Delivery System (BMDS) under Heading 84.79 or Heading 87.05
2. Invocability of extended period of limitation for demanding Central Excise duty

Classification Issue Analysis:
The appeal concerns the classification of BMDS under Heading 84.79 or Heading 87.05. The appellant argues that BMDS, being a machinery for mixing chemicals to create an explosive mixture, should be classified under Heading 84.79. Reference is made to the Explanatory Notes of H.S.N. and a previous decision regarding a similar case. The appellant contends that BMDS can function independently of the chasis, emphasizing that the chasis does not alter the classification. However, the respondent argues that BMDS is a special purpose motor vehicle under Heading 87.05 as it cannot operate without being mounted on a chasis. The process of manufacture supports this argument, indicating that BMDS is designed for non-transport functions, aligning with the description under Heading 87.05.

Extended Limitation Period Issue Analysis:
Regarding the invocability of the extended period of limitation for demanding Central Excise duty, the appellant asserts that they disclosed all relevant information through classification and Modvat declarations, thus negating any intent to evade duty payment. The appellant's declarations clearly stated the use of motor vehicle chasis as an input for BMDS production. The appellant's compliance with declaration requirements and the defacement of the invoice by the Range Superintendent further support their argument against suppression of facts. As the show cause notice was issued beyond the normal limitation period, and considering the lack of suppression, the extended limitation period is deemed inapplicable. Consequently, the demand for duty and penalty is set aside, and the appeal is allowed on the grounds of time bar.

In conclusion, the judgment rules in favor of the appellant, determining the classification of BMDS under Heading 87.05 and dismissing the invocability of the extended limitation period for demanding Central Excise duty due to the absence of suppression of facts.