2018 (6) TMI 1072 - AT - Central Excise

Extended period of limitation - Penalty - Classification of goods - Interpretation of Statute - Held that - As this Tribunal in the case of Raja Forgings & Gears 2008 (7) TMI 710 - CESTAT, NEW DELHI has held that this is the case involving interpretation tariff entries, therefore, there is no mis-declaration or classification can be attributable to the assessee - Admittedly, in this case also the appellant have described their goods as part of harvesters combines which is not disputed the items manufactured of the appellant are harvester transmission. In that circumstances, this is the issue of interpretation or classification of the goods in question, therefore, relying on the decision of Raja Forgings & Gears wherein this Tribunal dropped the penalty holding that the issue of interpretation - extended period also not invokable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of classification of goods under Central Excise Tariff Act, 1985; Invokability of extended period of limitation for demands and penalty.

Analysis:

Issue 1: Interpretation of classification of goods under Central Excise Tariff Act, 1985
The case involved the classification of goods manufactured by the appellant under heading 84.33 of the Central Excise Tariff Act, 1985. The appellant had amended their registration certificate and filed a classification list showing the goods as parts of harvester combines and threshing machines. However, an investigation revealed that the correct classification should have been under chapter heading 84.83. The appellant contended that the issue was one of interpretation of classification, as they had provided the correct information to the authorities. The Tribunal, in a previous round of litigation, remanded the matter back to the lower authority to decide the classification issue by a reasoned order. The Tribunal referred to a previous case involving similar goods, where it was held that the goods should be classified under chapter heading 848390. As the issue was one of interpretation, the extended period of limitation was deemed not invokable, and penalty was not imposed.

Issue 2: Invokability of extended period of limitation for demands and penalty
The appellant argued that since the issue was one of correct classification and interpretation, the extended period of limitation should not be invoked. The appellant had described their goods as parts of harvester combines, and the Tribunal found no misdeclaration or intention to evade duty. Relying on a previous case decision, the Tribunal held that as it was an issue of interpretation, the penalty was not imposable, and the demand pertaining to the extended period of limitation was dropped. Consequently, the penalty on the appellant was set aside, and the appeal was partly allowed.

In conclusion, the Tribunal's judgment focused on the correct interpretation and classification of goods under the Central Excise Tariff Act, 1985. The decision highlighted the importance of providing accurate information to the authorities and the implications of invoking the extended period of limitation for demands and penalties in cases involving classification disputes.