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TMI Blog2016 (1) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... correctly or otherwise. The audit report which has been produced before us indicate that this issue was not raked by the audit team would mean that it was accepted by the audit team that the classification of products is under Notification 72.14. On limitation the appeal succeeds and the demand for the period 01.03.2004 to 31.10.2004 is blatantly hit by limitation and the show-cause notice invoking the period of limitation under the provisions of Section 11A(1) is not correct. The impugned order is liable to be set aside on limitation only - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... shape piece by forging. He would draw our attention to the Explanatory Note in HSN under 7214 and submit that the said Explanation squarely covers their product. He would then draw our attention to the photographs which were produced before the lower authorities and being produced before us as to what kind of products are cleared by them from their factory premises. It is his submission that the products merit classification under Chapter Heading 7214 and not 7326 as claimed by Revenue. He would submit that the product 7326 are other articles of iron and steel forged or stamped but not further worked while the products manufactured by them are in the form of grinding, punching etc. It is his further submission that on limitation, they have got very good case inasmuch as before starting the manufacturing of the products they had informed the departmental authorities in 2002 that they are manufacturing these articles. He would submit that they were filing the returns regularly with the authorities indicating clearances of these goods with a benefit of lower rate of duty as provided in Notification 16/2004. He would submit that the records of the appellant was audited by the audit par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rings were classified under 73.26 and this order has been upheld by the Apex Court as reported at 2003 (156) ELT A210. He would submit that identical issue came in before this Tribunal in the case of Sharda Forging & Stampings (P) Ltd. - 2004 (166) ELT 357 (Tri. - Del) and this Bench held that forged articles of iron and steel would fall under Heading 73.26. Aggrieved by such an order, the Apex Court was moved wherein the appeal filed by the assessee therein was dismissed the appeal which would merit classification under Heading 73.26. On limitation it is his submission that the appellant had filed the classification in 1994 would amount that there is suppression. It is his submission that the appellant had not indicated that they are manufacturing forged articles and have also mis-declared on the invoices that the product would fall under the category of iron bars and rods forged. It is also his submission that the year 2002 it is not necessarily covered the classification issued when auditing is being undertaken. 5. We have considered the submissions made at length by both sides and perused the records. 6. The issue involved in this case is whether the articles manufactured by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unching by cutting or stamping or by other processes such as folding, assembling, welding, turning milling or perforating other than articles included in the preceding heading of this Chapter or covered by Note I to Section XV or included in 82 or 83 or more specifically covered elsewhere in the Nomenclature." From the photographs which were reproduced herein above of the articles manufactured by the appellant, it would be seen that these products are correctly classifiable as per the HSN Explanatory Note under 73.26. 6.4 We find that the reliance placed by learned D.R. on the judgement of the Tribunal in the case of TISCO Ltd. (supra) as upheld by the Apex Court is directly on the point and in favour of the Revenue. We find that the judgement of BCL Forgings Ltd. (supra) this Bench considered the very same issue wherein para 8 this Bench held as under:- "8 . In the present case, we find that the appellants are only undertaking the process of removal of excess material from the forgings. The other important operations such as turning, drilling, grinding etc. are undertaken by the customers. The Tribunal in the case of Jaypee Forges v. CCE, Mumbai reported in 1996 (83) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve precedent by contending that Rule 2(a) of the Interpretation Rules was not considered by the Tribunal in the aforementioned case; but, as we observed supra, in the light of the findings recorded by the Tribunal there is no scope to invoke the Rule that is sought to be relied upon. Hence the appeal is dismissed. No costs." 6.5 In the case in hand the first appellate authority in the impugned order at para 11 has reproduced the manufacturing process as has been stated by the Manager of the appellant which indicates that the appellant used to continue to hammer the forged articles to the required shape and removes the excess/over shaping of the items which is resultant due to hammering from all sides and then used to clear the same. Identical manufacturing process has been recorded in the case of BCL Forging Ltd. (supra) and the view taken by the Bench was such articles would fall under Heading 73.26. 7.6 In similar case of Sharda Forgings and Stampings (P) Ltd. (supra) this Bench was considering similar articles and held as under:- "7. Heard both the sides. In this case, the appellants are claiming the classification of Tine (Hul) and Disc Spindle under Heading 73.26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is issued on 30.04.2009 by invoking extended period stating that the appellant had suppressed that they are manufacturing forged articles and mis-stating the facts. At the outset we record that the findings of the first appellate authority as well as the adjudicating authority on the limitation are incorrect for more than one reason. 7.9 Firstly, it is undisputed that appellant had been classifying the very same products from 1994 onwards under Ch. Heading 72.14 and also when they started manufacturing of products filed declaration with the authorities seeking to classify the product under Ch. Heading 72.14. Admittedly, during the material period there was no system of approval of the classification list filed by the assessee, at the same time the department cannot shirk away from their responsibility that they were aware of the classification of the product. It is on record that appellant was filing monthly returns indicating therein the clearances of forged articles by availing benefit and paying lesser duty. 7.10 Secondly, we find that the appellant's records were audited by audit party in EA-2000, Comprehensive audit, which has been formulated by the Govt. of India, inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... departments. We find that the Hon'ble High Court of Bombay in the case of Rajkumar Forge Ltd. 2010 (262) E.L.T. 155 (Bom.) held in paragraph no.13. "13 It is an undisputed fact that in so far as the Petitioners are concerned, audit of the Petitioners' factory was carried out on three dates i.e. 6th September 1993, 1st November 1995 and 2nd September 1994. The Petitioners vide their letter dated 6th September 1993 have recorded the visit of the audit party and have also replied to the audit objections raised by the said audit party in respect of scrap generated and have informed the authorities that they were debiting ₹ 80,000/at the rate of ₹ 1,000/per Metric Tonne and that they were also debiting differential duty totaling to ₹ 63,318/in respect of Mill Rollers which was debited under PLA dated 3rd September 1993. Therefore, the Petitioners vide their letter dated 5th July 1995 have informed the Superintendent of the Respondents that they had debited ₹ 2,08,760/against the Scrap Generation at Subcontractor end, where material is sent for processing under Rule 57 F(3) for the period January 94 to March 95. Therefore by the said letters the Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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