The appellant classified goods, gears for rotary tiller and ...

Goods classified under wrong heading due to interpretation issue. No malafide intent. Assessee entitled to CENVAT credit.

Case Laws     Central Excise

August 6, 2024

The appellant classified goods, gears for rotary tiller and parts of rotary tiller, under central excise sub-heading 82349090 instead of heading 848340000. The demand was set aside on the ground of time limitation. The Tribunal held that when there is a dispute of classification, malafide intention cannot be attributed to the assessee. The assessee recorded all transactions in books, and there was no suppression of facts or malafide intention for misclassification. The assessee was entitled to CENVAT credit on inputs used for manufacturing the final product. The classification of goods meant for agricultural equipment is highly debatable. In case of interpretation of classification, the extended period of limitation shall not apply, and the demand will not sustain on the ground of time bar. The Commissioner (Appeals)'s order setting aside the demand on time bar was upheld, and the Revenue's appeal was dismissed.

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