1988 (7) TMI 231 - AT - Central Excise

Summary

Issues:
1. Duty evasion and non-compliance with Central Excise Law.
2. Classification of goods under Tariff Item 51-A(iii).
3. Benefit of duty exemption under Notification No. 118/75-C.E.
4. Imposition of penalty under Rule 174-A.

Analysis:

1. Duty evasion and non-compliance with Central Excise Law:
The appellants were found to have cleared dies and tools without paying the appropriate duty and without a Central Excise License. The duty amounting to Rs. 91,406.53 was demanded, and a penalty of Rs. 20,000 was imposed. The appellants did not appear for the hearing, requesting a decision based on merits and records. The Departmental Representative argued in favor of the order-in-original. The Tribunal considered the facts and submissions but found insufficient evidence to support the classification under Tariff Item 51-A(iii). As a result, the classification was set aside, and the goods were classified under Central Excise Tariff Item 68.

2. Classification of goods under Tariff Item 51-A(iii):
The Tribunal analyzed whether the impugned goods could be classified under Tariff Item 51-A(iii). The department failed to provide evidence supporting this classification. The appellants argued that the products were profiles of metals for specific applications and not designed to be fitted into hand tools or machine tools. The Tribunal referred to a previous case regarding the classification of cutting dies and cutting discs and concluded that the movement of the goods was manual, not fitted to any tools. The classification under Tariff Item 51-A(iii) was set aside.

3. Benefit of duty exemption under Notification No. 118/75-C.E.:
The appellants claimed duty exemption under a specific notification for goods used for captive consumption. However, the Tribunal found no clear finding in the lower authority's orders regarding this aspect. Therefore, the matter was remanded for re-adjudication to determine if the goods qualified for the exemption under the notification.

4. Imposition of penalty under Rule 174-A:
The appellants were penalized for violating Rule 174 of the Central Excise Tariff Rule by not obtaining a Central Excise License. The Tribunal considered the circumstances, including the department's awareness of the production, lack of clarity on license requirements, and absence of intent to evade duty. Consequently, the penalty of Rs. 20,000 was set aside as there was no deliberate violation of Central Excise procedures or rules.

In conclusion, the Tribunal set aside the classification under Tariff Item 51-A(iii), remanded the duty exemption aspect for re-adjudication, and revoked the penalty imposed under Rule 174-A due to the absence of intentional evasion or violation of procedures.