2004 (1) TMI 194 - AT - Central Excise

Summary

Issues involved: Classification of products under different Chapter Headings, demand of duty for a specific period, limitation period for demand of duty, verification of declaration filed under Rule 173B.

Classification Issue: The appellants were engaged in blending raw materials and selling the resultant product under Chapter Heading 2710.90. Departmental officers drew samples in October 1998, but the test results were not provided to the appellants. In July 1999, fresh samples were sent for opinion, leading to a show cause notice in 2002 demanding duty for misdeclaration. The Tribunal found that relying on the test report of samples drawn in July 1999 for clearances from October 1998 to March 1999 was not valid based on a previous decision.

Verification of Declaration: The declaration filed under Rule 173B in 1998 was required to be verified as per Board's Circular. The department's efforts in drawing samples in October 1998 and subsequent assessment of RT 12 Returns without errors indicated proper verification. The show cause notice issued in 2002 demanding duty for misdeclaration in the declarations filed under Rule 173B and limiting the period of demand from June 1998 to March 1999 was deemed unsustainable due to being barred by limitation.

Limitation Period: The Tribunal concluded that since the larger period of limitation could not be invoked to confirm the demand under Section 11A(1) proviso, the demand, penalties under Rule 173Q, and order of interest could not be sustained. Therefore, the appeal was allowed solely on the ground of limitation, setting aside the original order.