2023 (6) TMI 190 - AT - Central Excise

Classification of goods - Bituminized Hessain Tape - Rot-proofed Bituminized Hessian Cloth mixed with Copper Napthalate, Bituminized Cotton Tape - to be classified under the sub-heading 5909 of Central Excise Tariff Act, 1985 or under Chapter Heading 5906.90? - applicability of N/N. 175/86 dated 01/03/86 - Suppression of facts - time limitation - HELD THAT - The issue is no more Resintegra. On similar facts and circumstances, the Hon ble Supreme Court in CCE., NAVI MUMBAI VERSUS AMAR BITUMEN ALLIED PRODUCTS PVT. LTD. 2006 (8) TMI 187 - SUPREME COURT has upheld the classification of the impugned goods under the chapter heading 5909 . Consequently, the benefit of Notification No.175/86 dated 01.03.1986 was also allowed. In the present case also the goods are exclusively used for industrial purpose and accordingly the goods are rightly classifiable under the chapter heading 5909. Consequently, the benefit of Notification 175/86 dated 01/03.86 was also available to them. Time Limitation - HELD THAT - The entire issue was known to the department and there was no suppression fact involved in this case. Hence, the Notice issued beyond the period of one year was hit by limitation and liable to be set aside on this ground also. However, since on merits itself the demand is not sustainable, there is no need to set aside the demand on the ground of limitation. The said goods are rightly classifiable under chapter heading 5909 and the Appellants are eligible for the benefit Notification No. 175/86 dated 01.03.1986. Accordingly, the Appeal filed by the Appellant is allowed.

Summary

Issues involved: Classification of goods under Central Excise Tariff Act, 1985, benefit of Notification No.175/86-CE dated 01.03.1986, suppression of fact in demand notice, industrial use of manufactured goods, limitation period for issuing demand notice.

Classification of Goods: The Appellants initially classified goods under sub-heading 5909 but later reclassified under Chapter Heading 5906.90 based on Department's advice. Department appealed for classification under sub-heading 6807, denying benefit of Notification No.175/86-CE. Appellant argued for classification under 5909 for goods exclusively used for industrial purpose, citing Supreme Court judgment supporting this classification.

Suppression of Fact and Limitation: Appellant contended that demand notice issued beyond one year, invoking suppression of fact, was not sustainable as the matter was known to the department and classification list was approved earlier. Tribunal found no suppression of fact, rendering the notice hit by limitation. However, since demand was not sustainable on merits, setting it aside on limitation ground was deemed unnecessary.

Industrial Use and Classification: Tribunal observed that goods exclusively used for industrial purposes, like those in cable industries, are rightly classifiable under chapter heading 5909. Citing Supreme Court precedent, Tribunal affirmed classification under 5909 and upheld benefit of Notification No. 175/86 dated 01.03.1986 for the Appellants.

Conclusion: Considering the industrial use of goods and legal precedent, the Tribunal allowed the appeal, holding the goods rightly classifiable under chapter heading 5909 and confirming eligibility for the benefit of Notification No. 175/86 dated 01.03.1986. The demand notice was set aside based on both the merit of classification and the limitation issue.