1992 (10) TMI 179 - AT - Central Excise

Summary

Issues:
Classification of HDPE Tapes/strips under Chapter 39 or 54 of Central Excise Tariff Act, 1985 and confirmation of demand for the period 4-5-1986 to 16-8-1986.

Detailed Analysis:

1. The appellants were alleged to have manufactured and removed HDPE tapes without observing Central Excise procedures and without payment of duty. The department charged them with suppression of production and evasion of duty amounting to Rs. 41,216.74 for the period in question.

2. The Addl. Collector of Central Excise confirmed the duty under relevant provisions and imposed a penalty of Rs. 5,000 under Central Excise Rules.

3. The appellants contended that the HDPE tapes should be classified under Tariff Heading 3920.32 as per a ruling of the M.P. High Court and claimed entitlement to Modvat relief, which had been denied to them.

4. The Revenue argued that the products had been classified under Chapter Heading 5406.90 and that the benefit of the M.P. High Court ruling on classification would not apply due to clandestine removal and non-accounting.

5. The Tribunal considered the submissions and upheld the classification under Heading 3920.32 based on the M.P. High Court ruling. The matter was remanded to the original authority to consider Modvat benefit and other submissions in light of the classification determined by the Court.

6. The Tribunal emphasized that duty must be determined based on the classification established by higher Courts. It also noted the time bar issue regarding the demand raised for clandestine removal well after the discovery by the department.

7. The lower authorities were directed to re-examine the case, consider Modvat benefit, and address the time bar plea during further proceedings. The appeal was disposed of accordingly.