1983 (9) TMI 282 - AT - Central Excise

Summary

Issues: Assessment under Item 14E vs. Item 8 of Central Excise Tariff, Mis-declaration of product, Time-barred demand

Assessment under Item 14E vs. Item 8 of Central Excise Tariff:
The dispute in this case revolves around the correct assessment of liquid paraffin under the Central Excise Tariff. The Appellate Collector held that the liquid paraffin should be assessed under Item 14E after labelling and packing, considering it as a pharmaceutical-grade product. On the other hand, the appellants argued that the goods should be assessed under Item 68 as a drug intermediate exempt under Notification No. 62/78, as they were sold to manufacturers of medicine. The Tribunal noted that the liquid paraffin was sold in drums bearing the name of the manufacturer, making it liable to be assessed as a patent and proprietary medicine under Item 14E. The Tribunal agreed with the department's counsel that the use of a name on the drums connecting them to a specific manufacturer was sufficient to classify the goods as patent and proprietary medicine, regardless of the packaging size. The assessment under Item 8 for unpacked liquid paraffin was also found to be correct as per the description of that item.

Mis-declaration of product:
The appellants were accused of mis-declaring the product as a drug intermediate falling under Item 68 and suppressing the fact that the product satisfied the specifications of Tariff Item 8. The Tribunal found that the factory failed to make a complete and true declaration by not reporting that the product was sold in labelled drums and that it met the specifications of Item 8. The longer time limit of 5 years for demand was deemed applicable due to the incomplete declaration by the factory.

Time-barred demand:
Regarding the time-barred demand, it was noted that the factory did not declare that the paraffin was sold in labelled drums or report the product as an Item 8 product. The Tribunal upheld the application of the longer time limit of 5 years for demand due to the factory's failure to make a complete and accurate declaration. Ultimately, the Tribunal found no grounds to interfere with the lower authority's decision and rejected the appeals.

In conclusion, the judgment upheld the assessment of liquid paraffin under Item 14E as a patent and proprietary medicine due to the labelling on the drums, dismissed the mis-declaration by the factory, and justified the time-barred demand based on the incomplete declaration made by the factory.