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2025 (5) TMI 1216 - AT - Central ExciseBenefit of concessional rate of excise duty under Notification No. 01/2011-C.E. dated 01.03.2011 and Notification No. 16/2012-C.E. dated 17.03.2012 - Bamboo Mat Corrugated Sheets - Bamboo Mat Ridge Caps - invocation of extended period of limitation - HELD THAT - It is observed that concessional rate of duty @1% and 2% has been provided for the goods Resin Bonded Bamboo Mat Board with or without veneer in between vide N/N. 01/2011-C.E. dated 01.03.2011 (Sl. No. 52) and N/N. 16/2012-C.E. dated 17.03.2012. Bamboo Mat Board Bamboo Mat Corrugated Sheets and Bamboo Mat Ridge Caps are all identical products and classifiable under the same heading of 4412 1000 of the Tariff. In this regard it is observed that N/N. 01/2011-C.E. dated 01.03.2011 and Notification No. 16/2012-C.E. dated 17.03.2012 fixes the rate of duty for Resin Bonded Bamboo Mat Board with or without veneer in between initially to 1% and later to 2% and there is no separate Notification for Bamboo Mat Corrugated Sheets and Bamboo Mat Ridge Caps as the nature of these products are almost identical. The raw materials and the process of manufacture is also same for all the three products. The Bamboo Mat Corrugated Sheets and Bamboo Mat Ridge Caps manufactured by the appellant are also required to be clubbed along with Resin Bonded Bamboo Mat Board with or without veneer in between . Accordingly all the three products manufactured by the appellant would be eligible for the benefit of concessional rate of duty as provided under N/N. 01/2011-C.E. dated 01.03.2011 and N/N. 16/2012-C.E. dated 17.03.2012. Thus the demands confirmed in the impugned orders by denying the concessional rates of duty in respect of the two products namely Bamboo Mat Corrugated Sheets and Bamboo Mat Ridge Caps is legally not sustainable and hence we set aside the same. Since the demand of Central excise duty is not sustainable the question of demanding interest and imposing penalties does not arise. Time limitation - Suppression of facts or not - HELD THAT - It is observed that the various letters have been sent by the appellant to the Revenue and no information has been suppressed by them from the Department with the intent to evade payment of duty. Therefore since the appellant was always in correspondence with the Department and have time and again sought clarification we are of the view that there has been no suppression of facts on the part of the appellant in this case. Hence the demand confirmed in the first Show Cause Notice dated 09.07.2015 by invocation for the extended period of limitation is not sustainable - the demands confirmed by invoking the extended period of limitation are not sustainable. Conclusion - i) The benefit of concessional rate of duty provided under N/N. 01/2011-C.E. dated 01.03.2011 and N/N. 16/2012-C.E. dated 17.03.2012at the rates of 1% and 2% respectively are available to all the three products viz. Bamboo Mat Board Bamboo Mat Corrugated Sheets and Bamboo Mat Ridge Caps during the periods under dispute. Hence the demands confirmed in the impugned orders are not sustainable and accordingly the same is set aside. ii) Since the demands against the appellant are not sustainable the demand of interest and imposition of penalties thereon are also not sustainable and consequently the same are set aside. The impugned order set aside - appeal allowed.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Tribunal are: (a) Whether the concessional rate of excise duty under Notification No. 01/2011-C.E. dated 01.03.2011 and Notification No. 16/2012-C.E. dated 17.03.2012, applicable to "Resin Bonded Bamboo Mat Board, with or without veneer in between," extends to the other two products manufactured by the appellant, namely "Bamboo Mat Corrugated Sheets" and "Bamboo Mat Ridge Caps," which are classified under the same tariff heading but were denied such concessional benefit by the Department. (b) Whether the invocation of the extended period of limitation for demanding duty and imposing penalty under Section 11AC of the Central Excise Act, 1944, and Rule 27 of the Central Excise Rules, 2002, is sustainable in the facts of the case, considering the appellant's conduct and correspondence with the Department. 2. ISSUE-WISE DETAILED ANALYSIS Issue (a): Applicability of concessional rate of duty to Bamboo Mat Corrugated Sheets and Bamboo Mat Ridge Caps Relevant legal framework and precedents: The classification and rate of duty are governed by the Central Excise Tariff Act, 1985, and Notifications issued under the Central Excise Act, 1944. Notification No. 01/2011-C.E. and Notification No. 16/2012-C.E. prescribe concessional duty rates on "Resin Bonded Bamboo Mat Board, with or without veneer in between." Chapter Note 4 to Chapter 44 of Section IX of the Central Excise Tariff Act, 1985, provides that products under headings 4410, 4411, or 4412 may be worked into various shapes without changing their classification. Court's interpretation and reasoning: The Tribunal noted that all three products-Bamboo Mat Board, Bamboo Mat Corrugated Sheets, and Bamboo Mat Ridge Caps-are classified under the same tariff item 4412 1000, a fact undisputed by the Department. The Tribunal relied on Chapter Note 4, which clarifies that products of heading 4412 may be formed into different shapes (curved, corrugated, cut, etc.) without altering their classification. This implies that the shape or form of the product does not change its classification or eligibility for concessional rates. The Tribunal further observed that the raw materials and manufacturing processes for all three products are identical, reinforcing that the products are essentially the same for excise duty purposes. There was no separate notification granting concessional rates specifically for the other two products, indicating the intent to cover all such forms under the description "Resin Bonded Bamboo Mat Board, with or without veneer in between." Key evidence and findings: The appellant's classification of all products under tariff item 4412 1000, the absence of separate tariff entries or notifications for the other two products, and the manufacturing process similarity were key factual findings. The Tribunal also referenced Chapter Note 4 to support the view that different shapes do not alter classification. Application of law to facts: Applying the tariff classification rules and the relevant Notifications, the Tribunal held that the concessional duty rates must apply uniformly to all three products. The Department's denial of concessional rates to Bamboo Mat Corrugated Sheets and Bamboo Mat Ridge Caps was contrary to the legal framework and the factual matrix. Treatment of competing arguments: The Department argued that the concessional rate applied only to the specifically described product and not to the other two products, which were different. The Tribunal rejected this narrow interpretation, relying on the tariff classification principles and Chapter Notes, which do not differentiate based on shape or size. Conclusions: The Tribunal concluded that all three products are identical for tariff purposes and eligible for concessional duty rates under the relevant Notifications. The demands confirmed by denying these benefits were set aside. Issue (b): Sustainability of demands and penalties under extended period of limitation Relevant legal framework and precedents: Section 11AC of the Central Excise Act, 1944, allows imposition of penalty for duty evasion, and Rule 27 of the Central Excise Rules, 2002, provides for penalty for failure to comply with rules. The extended period of limitation can be invoked if there is suppression of facts or willful misstatement by the assessee. The Apex Court's decision in Nizam Sugar Factory v. Collector of Central Excise, A.P. was cited, which held that if facts are not suppressed and are known to the authorities, extended period cannot be invoked. Court's interpretation and reasoning: The Tribunal examined the appellant's conduct and correspondence with the Department. It was established that the appellant had been diligent in seeking clarifications and providing information, with no suppression of facts or intent to evade duty. The Tribunal relied on the principle that the extended period of limitation is not available where no suppression or fraud is established. Key evidence and findings: The appellant's multiple letters and communications seeking clarification and providing information were key evidence demonstrating transparency and absence of concealment. The Department's knowledge of facts prior to issuance of the second Show Cause Notice was also noted. Application of law to facts: Given the absence of suppression, the Tribunal held that invoking the extended period of limitation was not justified for both Show Cause Notices covering the periods 2010-2015 and 2015-2017. Treatment of competing arguments: The Department maintained that the extended period was justified. The Tribunal rejected this, aligning with the Apex Court's precedent that extended limitation cannot be invoked without suppression. Conclusions: The demands confirmed by invoking the extended period of limitation and penalties imposed were held to be unsustainable and set aside. 3. SIGNIFICANT HOLDINGS The Tribunal held: "We hold that the benefit of concessional rate of duty provided under Notification No. 01/2011-C.E. dated 01.03.2011 and Notification No. 16/2012-C.E. dated 17.03.2012 at the rates of 1% and 2% respectively are available to all the three products viz. 'Bamboo Mat Board', 'Bamboo Mat Corrugated Sheets' and 'Bamboo Mat Ridge Caps' during the periods under dispute. Hence, the demands confirmed in the impugned orders are not sustainable and accordingly, we set aside the same." On limitation, the Tribunal stated: "Since the appellant was always in correspondence with the Department and have time and again sought clarification, we are of the view that there has been no suppression of facts on the part of the appellant in this case. Hence, the demand confirmed in the first Show Cause Notice dated 09.07.2015 by invocation for the extended period of limitation is not sustainable." And further: "When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later on, while issuing the second and third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities." Core principles established include:
Final determinations:
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