2007 (3) TMI 171 - AT - Central Excise

Co-extruded films No reliable evidence shown by Dept. that the co-extruded films was being produced at disputed time No misdeclaration of co-extruded films as Lay flat tubing to avail exemption Charges against the noticee for evasion of duty are not established

Summary

Issues:
Classification of goods manufactured by the respondent, Duty demand on clearances made by the respondent, Validity of Commissioner's decision on duty liability, Evidence of manufacturing co-extruded films by the respondent, Small scale exemption applicability, Department's challenge to Commissioner's findings.

Classification of Goods Manufactured:
The respondent manufactured goods labeled as "Lay Flat Tubing" and Co-extruded Films. The department argued that the products are classifiable under Chapter Heading 3920.62. The Commissioner, in de nova adjudication, classified the goods under Chapter Heading 39.17 and exempted them under Notification No. 14/92 dated 1-3-1992. Duty demand was proposed on clearances made by the respondent in their own name and sister concerns.

Duty Demand and Commissioner's Decision:
The Commissioner confirmed duty demand on extruded and slitted films manufactured and cleared from 20-1-93 onwards. The respondent did not dispute this demand. The Commissioner found that a substantial portion of the demand was not sustainable based on the evidence presented, including expert opinions and calculations, reducing the duty liability significantly.

Evidence of Manufacturing Co-extruded Films:
The department argued that the respondent only manufactured Co-extruded Films and that the manufacturing activity, including slitting, was solely done by the respondent. The respondent, however, claimed to have started manufacturing both lay flat tubings and co-extruded films from January 1993 after installing new machines for printing and slitting.

Small Scale Exemption and Challenge to Commissioner's Findings:
The Commissioner's findings on the duty liability for co-extruded films manufactured from 20-1-93 were upheld. The Tribunal found no reliable evidence to support manufacturing of co-extruded films before this date. The department failed to provide valid grounds to overturn the Commissioner's decision, leading to the dismissal of the appeal filed by the department.

This detailed analysis covers the issues of classification, duty demand, Commissioner's decision validity, evidence of manufacturing, small scale exemption, and the challenge to the Commissioner's findings, providing a comprehensive overview of the legal judgment.