2018 (6) TMI 1690 - AT - Central Excise

Classification of imported goods - steam cleaner exclusively used in Prosthetic Dentistry (in the process of preparing artificial teeth i.e. Dentures) - whether classified under Tariff Heading 9018 49 00 of Central Excise Tariff Act 1985 or under CTH 8419 20 90? - benefit of Notification No. 10/2003-C.E. dated 1-3-2003 - extended period of limitation - HELD THAT - Since there is a specific heading covering the item the appellant s contention that as per the General Interpretation Rules when the item is classifiable under two headings the heading which occurs last in the tariff needs to be applied. Therefore the steam cleaner manufactured by the appellants falls correctly under Heading 8419 20 90 of Central Excise Tariff Act 1985. Extended period of limitation - penalty - HELD THAT - We appreciate the appellant s point of view that as they have been regularly filing returns as the department is aware of his activities extended period cannot be invoked - the invocation of penalty under Section 11AC of Central Excise Act 1944 is set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of steam cleaner under Central Excise Tariff Act, 1985; Invocation of penalty under Section 11AC of Central Excise Act, 1944.

Classification Issue:
The appellants, engaged in manufacturing medical and dental equipment, claimed their steam cleaner, used in Prosthetic Dentistry, falls under Tariff Heading 9018 49 00 for Central Excise. The Department, however, classified it under 8419 20 90, citing HSN Explanatory Notes. The Department argued that steam cleaners are covered under Heading 8419, which includes laboratory apparatus like autoclaves and sterilizing equipment. The Tribunal examined the HSN Explanatory Notes and concluded that since sterilizing and steaming apparatus are specifically covered under Heading 8419, the steam cleaner falls correctly under 8419 20 90, rejecting the appellant's contention based on General Interpretation Rules.

Penalty Invocation Issue:
Regarding the invocation of penalty under Section 11AC of the Central Excise Act, 1944, the appellants argued against the extended period, citing their regular return submissions and the department's awareness of their activities. The Tribunal acknowledged the appellant's argument, citing various Supreme Court judgments, including CCE v. HMM Ltd. and Aban Loyd Chiles Offshore Ltd. v. CC, which held that the extended period cannot be invoked when the department is aware of the activities. Consequently, the Tribunal set aside the penalty invocation under Section 11AC, allowing the appeal in that regard.

Conclusion:
The Tribunal upheld the classification of the steam cleaner under Heading 8419 20 90 of the Central Excise Tariff Act, 1985, based on the specific coverage of sterilizing and steaming apparatus under that heading. Additionally, the Tribunal ruled in favor of the appellants regarding the penalty invocation, setting it aside under Section 11AC of the Central Excise Act, 1944, due to the department's awareness of the appellant's activities and regular return submissions. The appeal was allowed on the penalty issue, providing relief to the appellants.