2017 (3) TMI 602 - AT - Central Excise

Benefit of N/N. 6/2002 - denial on the ground that the said veneered particle board is not 100% wood free - Held that - earlier veneer laminated board was classified by the appellant under Heading 4406.30, however, w.e.f. 4.2.2004 they sought classification under 4406.90. The said change has been denied to the appellant simply on the ground that in the Order-in-Original of the Commissioner dated 24.12.2003, in an earlier proceedings the veneer particle board has been held to be classifiable under Heading 4406.30 and it has been observed that the said product is not 100% wood free - the appellants are not bound to follow the classification decided by the order dated 24.12.2003 for the subsequent period - matter on remand to decide afresh classification in the light of evidence produced by the appellant and the eligibility of notification - appeal allowed by way of remand.

Summary

Issues:
Classification of veneered particle board under Central Excise Tariff Act, 1985 and eligibility for exemption under Notification No. 12/2004.

Analysis:
The case involves the appellants engaged in manufacturing Particle Boards, including Veneered Particle Board, challenging a demand show-cause notice denying them the benefit of Notification No. 12/2004 amending Notification No. 6/2002. The said notification exempts 100% wood free plain and pre-laminated particle board from Central Excise duty. The dispute arose as the appellant excluded the value of veneered particle board while calculating the exemption under Small Scale Notification No. 8/2003. Consequently, a demand show-cause notice was issued to recover Central Excise duty on the veneered particle board on the grounds of it not being 100% wood free and therefore not eligible for the exemption. The lower authorities confirmed the demand, leading the appellants to appeal before the Tribunal.

The appellants argued that the lower authorities presumed veneer to be wood without any testing or sample analysis. They highlighted that the classification of the product was changed to 4406.90, but no notice of this change was given, and the goods were classified under Chapter 4406.30 in the impugned order. The appellants contested the decision based on an earlier Order-in-Original where veneered particle board was classified under heading 4406.30 due to not being 100% wood free. However, the entire demand in that order was dropped as the appellants were entitled to another notification. The appellants objected to the penalty imposed, claiming no mis-declaration on their part.

The Tribunal observed that the earlier decision specifically classified veneered particle board under Heading 4406.30 as not 100% wood free, and since the appellants did not challenge that decision, they were expected to follow it. However, the Tribunal noted that the impugned order merely relied on the earlier decision and did not provide an independent finding on the classification issue. Considering the evidence presented by the appellants and the lack of an independent finding in the impugned order, the Tribunal set aside the order and remanded the matter to the original adjudicating authority for a fresh decision on the classification and eligibility for the notification.

In conclusion, the appeal was allowed by way of remand, providing the appellants with an opportunity to present evidence for a fresh decision on the classification of the veneered particle board and its eligibility for exemption under the relevant notifications.