2014 (6) TMI 515 - AT - Central Excise

Duty demand - P.D. pumps - one of the pumps are flame proof and other is used for liquid other than water also - Denial of benefit of Notification Nos. 54/93-C.E., dated 28-2-1993, 46/94-C.E., dated 1-3-1994 and No. 56/95-C.E., dated 16-3-1995 - whether the appellants are entitled for the benefit of the Notifications which provide nil rate of duty in respect of P.D. pumps primarily designed for handling water - Held that - Notification No. 54/93-C.E., dated 28-2-1993 provides nil rate of duty in respect of the pumps classifiable under Chapter Heading 84.13 of the Central Excise Tariff primarily designed for handling water . The other notifications are similarly worded. The product literature produced by the appellant shows that the pumps in question are not exclusively designed for handling water as one the pumps are flame proof and other is used for liquid other than water also. The product literature also shows that these are cleared to various industrial consumers. The pumps in question cannot be said to be primarily designed for handling water. Hence the appellants are not entitled to the benefit of the Notifications in question which provide nil rate of duty in respect of the pumps which are primarily designed for handling water. - appellants filed classification lists on 1-3-1993, 1-4-1994 and 16-3-1995 and clearing the pumps in question at nil rate of duty by claiming the benefit of Notifications. In view of this, the allegation of suppression with intent to evade payment of duty is not sustainable. Hence the demand beyond the normal period of limitation is not sustainable and set aside. - Decided in favour of assessee.

Summary

Issues Involved: Classification of P.D. pumps under Central Excise Tariff, benefit of Notifications providing nil rate of duty for pumps primarily designed for handling water, suppression with intent to evade payment of duty, extended period of limitation, imposition of penalty.

Classification of P.D. Pumps: The case involved appeals by the assessee and the Revenue against an order regarding the classification of P.D. pumps under Chapter Heading 84 of the Central Excise Tariff. The assessee claimed Nil rate of duty for two models of P.D. pumps primarily designed for handling water. A show cause notice was issued denying the benefit of certain Notifications during a specific period. The adjudicating authority confirmed the demand, which was later set aside by the Commissioner (Appeals) in favor of the appellants.

Benefit of Notifications: The main issue revolved around whether the appellants were entitled to the benefit of Notifications providing nil rate of duty for P.D. pumps primarily designed for handling water. The appellant contended that the pumps in question were primarily designed for handling water and had been cleared at nil rate of duty based on approved classification lists. The Revenue argued that the pumps could handle liquids other than water, making them ineligible for the benefit of the Notifications.

Suppression and Extended Period: The Revenue alleged suppression with intent to evade payment of duty, invoking the extended period of limitation. The appellants argued that as they had cleared the pumps based on approved classification lists, the allegation of suppression was not sustainable. The Tribunal found that the demand beyond the normal period of limitation was not sustainable and set it aside.

Imposition of Penalty: Since the allegation of suppression was deemed unsustainable, the Tribunal held that it was not a case for the imposition of any penalty. Consequently, the penalties imposed were set aside.

Judgment: The Tribunal allowed the Revenue's appeal for the normal period of limitation, confirming the demand. The appeal filed by the appellant was dismissed, but the demand for the extended period and the imposed penalties were set aside. The Cross Objections were disposed of in similar terms, with the penalties being set aside due to the unsustainable allegation of suppression.