2017 (12) TMI 954 - AT - Central Excise

Classification of goods - sub-assemblies and chassis - whether or not such components which were manufactured and cleared by the main appellant are liable to be assessed as television receivers under CETH 8528 or parts of television receivers falling under CETH 8529? - time limitation. Held that - Admittedly all the components and parts and chassis are numbered and are cleared with a required set of screws and name labels of the manufacturer. All the parts and components were numbered for a particular TV set and have clear identifiability - The sub-assemblies, chassis and name labels and screws for assembly are all cleared together which makes it clear that the goods cleared have essential characters of television receiver sets and the appellants classified it under CETH 8529 only to avoid higher excise duty and also MRP based assessment - goods are correctly classified under CETH 8528 of the Tariff. Time limitation - Held that - The proceedings which resulted in the impugned order dated 26/03/2014 started with a visit of the officers to the factory of the appellant on 02/12/2002. Evidences were collected during the course of detailed investigation. Statements were recorded in order to ascertain the background facts of the manufacturing process. It was also revealed that the very same goods were classified differently when cleared for export. The Original Authority recorded that it apparently reveals the motive of the appellant for improper gain to avoid payment of higher duty of excise under CETH 8528. We are in agreement with the findings of the Original Authority that the present show cause notice was not issued on similar set of evidences or facts which were subjected to decision in the earlier proceedings - extended period rightly invoked. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Classification of excisable items.
2. Limitation and applicability of extended period for demand.
3. Imposition of penalties.

Issue-wise Detailed Analysis:

1. Classification of Excisable Items:
The central issue in these appeals was whether the components manufactured and cleared by the main appellant should be classified as television receivers under CETH 8528 or as parts of television receivers under CETH 8529. The appellant argued that their classification should be under CETH 8529, as the technology for testing television receivers had changed post-1994-1995, allowing testing without full assembly. However, the Tribunal upheld the classification under CETH 8528, citing the Supreme Court's decision in the appellant's own case, which emphasized that the parts had essential characteristics of television receivers due to their identifiability and matching within the factory. The Tribunal noted that the same items were classified as television receivers for export, reinforcing the classification under CETH 8528 for domestic clearance as well.

2. Limitation and Applicability of Extended Period for Demand:
The appellant contended that the show cause notices were time-barred and that the dispute on classification had been ongoing, with facts known to the Department, negating the grounds for invoking suppression or willful misstatement. The Tribunal, however, found that the appellant's claim of changed facts post-1994 and the subsequent investigation revealing misstatements justified the application of the extended period. The Tribunal referred to the Supreme Court's decision in Nizam Sugar Factory, noting that the present case involved new facts and evidence gathered through detailed investigation, distinguishing it from previous proceedings.

3. Imposition of Penalties:
The Tribunal upheld the penalties imposed on the appellant, finding that the misclassification was intended to avoid higher excise duty and MRP-based assessment. The Tribunal agreed with the Original Authority's findings that the appellant's actions demonstrated an intent for improper gain, justifying the penalties.

Conclusion:
The Tribunal dismissed the appeals, affirming the classification of the goods under CETH 8528, supporting the extended period for demand due to misstatements by the appellant, and upholding the penalties imposed. The Tribunal found no merit in the appellant's arguments and concluded that the findings of the Original Authority were well-founded and supported by detailed investigation and legal precedents.