2019 (8) TMI 316 - AT - Central Excise

Time Limitation - Classification of goods - manhole cover - classified under heading 7324 or under 7325.10? - N/N. 13/2002-CE (NT) dated 01.03.2002 - appellant argued that they were not sure of the classification and they had doubt which resulted in non-payment of duty - HELD THAT - It is apparent that in 1999, in registration certificate itself they had sought classification as CI Casting under heading 7325.10 and CI Sanitary Fittings under 7324. The appellant were classifying the product in the year 2000 under heading 7325.10 as apparent from Invoice No. 148 dated 04.01.2000 and subsequently they changed the classification. There was a conscious decision to change classification after 2000. In invoice/ declaration prior to 01.04.2000, they have correctly classified and alter they have changed the classification - Thus, it is apparent that appellant had no bonafide belief otherwise - the extended period of limitation has rightly been invoked. Since the appellant are contesting the issue only on limitation, the appeal filed by the appellant is rejected.

Summary

Issues:
Classification of product under Central Excise duty - Applicability of Section 4A - Invocation of extended period for demand of duty.

Analysis:

1. Classification of Product:
The appellant, a manufacturing company, contested the classification of their product, a manhole cover, under Chapter heading 7324 by the Revenue who sought to classify it under 7325.10. The appellant argued that despite the duty rate being the same for both classifications, Chapter heading 7324 should apply due to its notification under Notification No. 13/2002-CE (NT) dated 01.03.2002.

2. Applicability of Section 4A:
The appellant emphasized that they had consistently classified the manhole cover under heading 7324, assessed duty under Section 4A of the Central Excise Act, and declared the manufacturing process, including printing MRP on the product. They contended that the Revenue was aware of this classification through their regular manufacturing and filing of ARE-1 returns, thus, the extended period for demanding duty under Section 4 should not have been invoked.

3. Invocation of Extended Period:
The appellant's argument centered on limitation, asserting that they had no doubt about the classification as they had correctly classified the product in earlier documents. However, the Revenue pointed out discrepancies in the appellant's classification history, indicating a conscious decision to change the classification from 7325.10 to 7324 after 2000. The Tribunal found that the appellant's actions did not demonstrate a bona fide belief in the classification, leading to the rightful invocation of the extended period of limitation for demanding duty.

4. Judicial Precedents:
The appellant relied on various case laws to support their argument regarding limitation and classification issues, while the Revenue contested the appellant's claims by highlighting inconsistencies in the appellant's classification history and their conscious decision to change the classification for benefit under Section 4A.

5. Decision:
After considering the arguments and submissions from both parties, the Tribunal upheld the impugned order, rejecting the appellant's appeal solely on the grounds of limitation. The Tribunal found that the appellant's conscious decision to change the classification without a bona fide belief in the classification warranted the invocation of the extended period for demanding duty under the Central Excise Act.

In conclusion, the judgment by the Appellate Tribunal CESTAT AHMEDABAD addressed the issues of classification of a product under Central Excise duty, the applicability of Section 4A, and the invocation of the extended period for demanding duty. The decision highlighted the importance of consistent classification practices and bona fide beliefs in determining the liability for duty under the Central Excise Act.