2012 (9) TMI 532 - AT - Central Excise

SSI unit - Classification - Microfined Red Oxide and Microfined Jet Black Oxide - confiscating land building plant and machinery - redemption on payment of fine - classification - appellant had bought various colour oxides and sold them either as such or after repacking them in small packings in their premises Held that - Burden to prove classification of the product is clearly on the department - department has not proved that the products cleared from other branches fall under Tariff Heading 3206.90 the question of shifting the burden to the appellants for the purpose of extending the benefit of exemption does not arise - values of clearances of the impugned products by the appellant are within the exemption limit as provided under Notification No. 1/93 - classification as per the order of the Commissioner - demand of duty order of confiscation and imposition of penalties set aside

Summary

Issues:
Classification of products under Tariff Heading 3206.90 vs. Chapter Heading 2821, Claim for exemption under Notification No. 1/93 dated 28-2-1993.

Classification Issue:
The appellant contested a show-cause notice alleging clearance without duty payment, registration, or formalities for products classified under Tariff Heading 3206.90. They challenged the Chemical Examiner's results favoring this classification, arguing for Chapter Heading 2821. The Commissioner rejected the appellant's claims, confirming duty demand and penalties. The appellant argued that samples tested elsewhere supported their classification, while the department failed to sample products from other branches. The Tribunal upheld the Commissioner's classification under Tariff Heading 3206.90, citing test results and lack of evidence supporting the appellant's claims.

Exemption Issue:
Regarding the claim for exemption under Notification No. 1/93, the Commissioner denied it due to lack of evidence on the value of clearances from branches other than Calicut. The Tribunal found that only samples from Calicut were tested, with results favoring the appellant for most products. As no investigation was conducted at other branches, the burden of proof regarding classification fell on the department. The Tribunal noted that the clearances fell within the exemption limit, setting aside the duty demand, confiscation order, and penalties imposed by the Commissioner.

In conclusion, the Tribunal upheld the classification under Tariff Heading 3206.90, denying the appellant's claims and setting aside the duty demand and penalties while confirming the exemption under Notification No. 1/93.