2001 (11) TMI 477 - AT - Central Excise

Summary

Issues: Classification of goods under Central Excise Tariff, Mis-declaration, Penalty imposition, Judicial precedent applicability

In the case before the Appellate Tribunal CEGAT, Mumbai, the issue revolved around the classification of goods under the Central Excise Tariff. The appellants, a firm in the small sector, had filed various classification declarations for components of Air Ducting Systems made of aluminum. Initially, the Jurisdictional Superintendent classified the goods under Heading 7616.90, leading to the payment of a differential duty by the Assessees. Subsequently, a Show Cause Notice alleged deliberate mis-declaration by the Assessees, seeking reclassification under Heading 8415.00 and imposing penalties under Section 11AC of the Central Excise Act, 1944. The Commissioner confirmed the demand and penalties, prompting the Assessees to file two appeals challenging the order.

The Tribunal referred to a previous judgment in the case of Airgrill Industries v C.C.E., Bangalore, where Grills/Diffusers used in Centralised Air Conditioning Systems were classified under Heading 7616.90. The Tribunal found that the same classification applied to the contested goods in the present case, rejecting the Assessees' claim of classification under Heading 8414.99. The Tribunal emphasized that the Department's re-classification of the goods under Heading 7616.90, which was accepted by the Assessees through payment of differential duty, invalidated the allegation of deliberate mis-declaration in the Show Cause Notice. Consequently, the demand was deemed unsustainable due to the re-classification and payment made by the Assessees. Regarding penalties, the Tribunal noted that similar penalties in the cited judgment were imposed but later relieved by the Tribunal.

Based on these findings, the Appellate Tribunal allowed both appeals, setting aside the impugned order and directing consequential relief for the Assessees. The judgment highlighted the importance of accurate classification under the Central Excise Tariff, the impact of re-classification by the Department, and the relevance of judicial precedents in determining the correct classification of goods and assessing penalties for alleged mis-declaration.