2002 (5) TMI 796 - AT - Central Excise

Summary

Issues: Classification of goods under Central Excise Tariff Act and invocability of extended period of limitation under Section 11A(1) of the Central Excise Act.

Classification Issue Analysis:
The main issue in the appeal was whether the appellant, a manufacturer of conveyors and parts thereof, was clearing parts of the conveyor or removing conveyor as a whole in different consignments for ease of transport. The appellant argued that they supplied conveyors in different lots/batches based on customer orders, paying duty applicable to parts when clearing only parts. They contended that conveyors were assembled and commissioned when orders were for "conveyor systems." The appellant cited relevant case law to support their position. On the other hand, the respondent argued that the conveyor system was not assembled by the appellant in their factory and then dispatched after disassembling. They emphasized that the purchase order should not determine the classification of the product and relied on a previous decision regarding the essential character of conveyors. Ultimately, the Tribunal found in favor of the appellant, noting that they had disclosed all relevant facts to the department, and the demand of duty was time-barred under Section 11A(1) of the Central Excise Act.

Extended Period of Limitation Issue Analysis:
Regarding the invocability of the extended period of limitation under Section 11A(1) of the Central Excise Act, the appellant argued that the demand of duty for the period from 1995-1997 was time-barred as they had provided all necessary documents to the department and did not conceal any information. They pointed to correspondence with the department indicating the dispatch of conveyor systems in multiple lots. The respondent contended that the appellant did not disclose the fact that they were not clearing complete conveyor systems and that the extended period of limitation should apply. However, the Tribunal held that the appellant had clearly communicated the nature of their supplies to the department, and therefore, the demand of duty was considered time-barred. As a result, the penalty imposed and interest demanded were set aside, and the appeal was allowed on the aspect of the time limit.

In conclusion, the Tribunal ruled in favor of the appellant, finding that they had appropriately disclosed all relevant information to the department, and thus, the demand of duty was time-barred under Section 11A(1) of the Central Excise Act. The classification issue was not considered due to the time-barred nature of the demand.