2016 (11) TMI 639 - AT - Central Excise

Classification of goods - Photo Albums - classified under Heading No. 48.20 of the first schedule to the Central Excise Tariff Act 1985 or under Heading No. 3926.90? - Held that - Only merely covering by the paper sheet the photo albums will not become made of paper or paper board in the absence of any test provided before us. We have to see the pre-dominance test for classify of such an article. In this case the albums produced before us is made of plastic and the same has been covered by only a paper sheet. In fact the photo albums in question has made of plastic cover. Merely covering from the paper sheet it does not mean that the album of paper - reliance placed on the decision of the case of A.J. Stationery (P) ltd. 2001 (2) TMI 388 - CEGAT BANGALORE - The proper classification of the photo albums in question is under heading 39.26 of the Central Excise Tariff Act 1985. Extended period of limitation - Held that - The issue of classification was in dispute therefore it cannot be stated that the appellant having any malafide intention to classify the said goods under heading 48.20 - extended period of limitation not invokable. Imposition of penalties - Held that - there was no mala-fide intention to evade payment of duty on behalf of the appellants - penalties not imposable The demand for the period within limitation is confirmed which shall be payable by the appellant along with interest - appeal disposed off - decided partly in favor of appellant.

Summary

Issues: Classification of photo albums under Central Excise Tariff Act, 1985 - Applicability of Notification No. 10/2003-CE - Proper classification under Chapter Heading 39.26 or 48.20 - Invocation of extended period of limitation - Imposition of penalties.

Classification Issue:
The appellant manufactured and cleared photo albums, claiming exemption under Notification No. 10/2003-CE. The dispute arose regarding the classification of the photo albums under Chapter Heading 39.26 or 48.20. The appellant argued that the albums should be classified under Chapter Heading 48.20, emphasizing that the albums were made of plastic and covered by a paper sheet. However, it was contended that the pre-dominance test was not applicable to articles under Chapter 48 and 39. The Tribunal examined the entries and observed that the albums, being made of plastic and covered by a paper sheet, should be classified under Chapter Heading 39.26.

Extended Period of Limitation:
The issue of extended period of limitation arose as the appellant claimed that the demand for the extended period was not sustainable. The Tribunal held that since there was no malafide intention on the part of the appellant to evade duty by misclassifying the goods, the extended period of limitation was not applicable. Consequently, the demand for the period within the limitation was confirmed, which the appellant was directed to pay along with interest.

Penalties Imposition:
Regarding the imposition of penalties, it was held that as there was no mala-fide intention on the part of the appellants to evade payment of duty, no penalties were imposable. Therefore, the penalties imposed on both the appellants were set aside.

In conclusion, the Tribunal classified the photo albums under Chapter Heading 39.26 of the Central Excise Tariff Act, 1985, confirmed the demand for the period within limitation, directed the appellant to pay the duty along with interest, and set aside the penalties imposed due to the absence of any malafide intention. The appeals were disposed of accordingly.