2004 (8) TMI 479 - AT - Central Excise

Summary

Issues: Classification of Polyethylene Glycol under CETA sub-heading, Time bar challenge for duty demand, Penalty imposition, Confiscation of seized goods

Classification of Polyethylene Glycol under CETA sub-heading:
The appeal was against the Commissioner of Central Excise's order confirming a duty demand on Polyethylene Glycol 300 to 600 under CETA sub-heading 3907.20, rejecting the appellant's claim that they should be classified under CETA sub-heading 3823.00 as residual products of the chemical industry. The products were found to be Organic Polymeric Compounds (Polyethylene Glycol) with more than five monomers, falling under Chapter 39 of the CETA schedule. The classification was supported by Note 3 (c) to Chapter 39, defining goods produced by chemical synthesis with at least five monomer units. Various scientific sources confirmed that Polyethylene Glycol is a condensation polymer of Ethylene Glycol with specific molecular weights, produced through specific polymerization processes. The evidence on record supported the classification of the products under CETA sub-heading 3907.20, leading to upholding the adjudicating authority's findings on the classification.

Time bar challenge for duty demand:
The challenge to the duty demand on the grounds of time bar was deemed well-founded. The appellants had consistently declared the products as Polyoxyethylene Glycol in their classification lists since 1986, with no changes in the manufacturing process during the disputed period from July 1987 to June 1992. The chemical composition and manufacturing process were clearly disclosed in the classification lists, indicating no suppression of vital information necessary for correct classification by the department. As a result, the extended period of limitation was not available to the department. The duty demand was upheld only for the period of six months from the show cause notice in August 1992, with a direction to re-compute the duty amount for this specific period. The penalty was set aside as the case involved a revision of classification rather than intentional duty evasion. The confiscation of seized goods was upheld due to the lack of satisfactory arguments against it in the appeal.

Penalty imposition:
The penalty was set aside as the case primarily involved a revision of classification and not a deliberate attempt to evade duty payment. The absence of intent to evade duty led to the decision to not impose a penalty, focusing on the re-computation of duty for a specific period instead.

Confiscation of seized goods:
The confiscation of seized goods was upheld as no compelling arguments were presented in the appeal against the confiscation. The lack of substantial counterarguments supported the decision to confirm the confiscation of the goods.

In conclusion, the appeal was partly allowed based on the issues discussed, including the classification of Polyethylene Glycol, the time bar challenge for duty demand, penalty imposition, and the confiscation of seized goods. The detailed analysis of each issue provided clarity on the legal reasoning behind the decisions made by the Appellate Tribunal CESTAT, Mumbai.