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1997 (7) TMI 293 - AT - Central Excise
Issues: Classification of products under Central Excise Tariff, invocation of extended period of limitation, eligibility for Modvat credit, imposition of penalty.
Classification of Products: The appeal involved the classification of products described as 'Rima Profile steel wires' under Heading No. 72.13 of the Central Excise Tariff. The dispute arose when the Revenue contended that the goods should be classified under Heading No. 73.08 as other articles of iron or steel. The appellants argued that their products were known in the market as Rima Profile steel wires and had been classified similarly under the old Central Excise Tariff. The Tribunal examined the manufacturing process and concluded that the goods did not qualify as iron or steel wires but fell under the category of other articles of iron or steel, as per Heading No. 73.08. Invocation of Extended Period of Limitation: The Revenue invoked the extended period of limitation, alleging wilful suppression with intent to evade payment of Central Excise duty. However, the Tribunal noted that the goods had been previously classified as Rima Profile steel wires under the old Central Excise Tariff, and the appellants' unit at Durgapur was eligible for Modvat credit. Considering these factors, the Tribunal found no grounds for invoking the extended period of limitation and restricted the demand to the normal period as per Section 11A of the Central Excises Act, 1944. Eligibility for Modvat Credit: The appellants contended that they were eligible for the benefit of exemption Notification No. 208/83-C.E. and that their production was being sent to their sister industrial unit at Durgapur, which was entitled to avail Modvat credit. This argument supported the appellants' claim that there was no intention to evade payment of Central Excise duty. The Tribunal considered this aspect in conjunction with the classification issue and the previous classification under the old Tariff. Imposition of Penalty: A penalty of Rs. 25,000/- was imposed along with the demand for Central Excise duty. However, as the Tribunal restricted the demand to the normal period of limitation and found no grounds for invoking the extended period, the penalty was reduced to Rs. 10,000/- and the redemption fine was reduced to Rs. 5,000/-. The appeal was rejected, subject to these modifications in the penalty amount. This detailed analysis of the judgment highlights the key issues of classification under the Central Excise Tariff, the invocation of the extended period of limitation, the eligibility for Modvat credit, and the imposition of penalties, providing a comprehensive overview of the Tribunal's decision in the case.
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