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2023 (10) TMI 1112 - SC - Central ExciseInvocation of extended period of limitation - applicability of proviso to Section 11A of the CE Act - Classification of goods - chewing tobacco - to be classified under the CET SH 2403 9910 as 'chewing tobacco' or to be classified under CET SH 2403 9930 as 'zarda/jarda scented tobacco' - product manufactured and cleared by the Assessee for the period 01.03.2006 to 10.07.2006 - penalty u/r 26. Invocation of extended period of limitation - applicability of proviso to Section 11A of the CE Act - HELD THAT:- The tribunal has proceeded to hold that limitation would apply and show cause notice should not have been issued beyond one year in view of the fact that the Assessee intimated their intention to change, without addressing the various issues which has been raised. In other words, the tribunal by cryptic order has negatived the contentions of the Revenue and held that the invocation of the extended period of limitation was not warranted. This finding, not being in consonance with the facts obtained on the hand, we are unable to subscribe our views to the judgment of the tribunal. The question is to be answered against the Assessee and in favour of the Revenue and affirm the finding of the adjudicating authority and reverse and/or set aside the finding recorded by the tribunal which has been observed at the initial stage herein given that it is not only contrary to the facts but also contrary to law as noticed hereinabove. It is for these precise reasons the Adjudicating Authority was of the clear view that there has been a deliberate intention to avoid payment of duty by the Assessee by misclassification and willful misstatement of its product and hence it was justified in invoking the extended period as provided in the proviso to Section 11A(1) of CE Act, 1944. Classification of goods - HELD THAT:- The stand of the Assessee has been consistent to the effect that product manufactured by it is to be classified as 'zarda/jarda scented tobacco' and at the insistence of the jurisdictional Deputy Commissioner the Assessee was classifying the goods under CET SH 2403 9910 i.e., 'chewing tobacco', for which there was also an order of determination passed Under Rule 6(2) of CTPM rules. Whereas in the other matters, namely URMIN PRODUCTS P. LTD. VERSUS COMMR. OF C. EX., AHMEDABAD [2010 (3) TMI 461 - CESTAT, AHMEDABAD] and Flakes-n-Flavourz the facts were entirely different. In Urmin Products the Assessee had declared the product as 'chewing tobacco' and then changed the classification to 'zarda/jarda scented tobacco' and again came back to the original position of declaring it or classifying it as 'chewing tobacco'. These classifications in Urmin Products were at the behest of the Assessee himself - In Flakes-n-Flavourz, the Assessee was alleged to be manufacturing 'zarda/jarda scented tobacco' and clearing it as 'chewing tobacco', and on facts it was found that there were additives added to the tobacco. In the said case this Court on facts held that there was no wilful suppression attributable to the assesssee and the Revenue had failed to establish the product as 'zarda scented tobaccot'. In the instant case the Assessee had clearly declared his product as 'zarda/jarda scented tobacco' falling Under Sub-heading 2403 9930 in Form 1 filed and based on the said declaration, capacity determination order dated 04.03.2015 Under Rule 6(2) had been passed re-classifying the product as 'chewing tobacco'. Accordingly, for the period April 2015 in Form-1 the Assessee had described the product as 'Jayanti Zarda Scented- 2403 9910'. However, in the capacity determination order dated 05.05.2015, the Deputy Commissioner classified the goods as 'chewing tobacco'. As such, there was no misstatement or suppression of facts, collusion, or fraud in the instant case and hence on facts, the principles enunciated in Urmin's case is distinguishable. Penalty u/r 26 of CER - HELD THAT:- There has been no penalty levied Under Rule 26 on the ground that there has been no intent to evade duty. The findings of the tribunal warrant no interference by this Court and the appeal has to fail - Appeal dismissed.
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