1997 (7) TMI 272 - AT - Central Excise

Summary

Issues: Classification of goods under Notification No. 201/79, Duty payable on sutures without needles, Interpretation of notification, Bona fide belief of the manufacturer, Period of limitation under Section 11A(1) of the Central Excise Act, 1944.

In this case, the Appellate Tribunal CEGAT, New Delhi, addressed the issue of classification of goods under Notification No. 201/79. The Appellant, engaged in manufacturing sutures falling under T.I. 14E, had filed classification lists and price lists, availing benefits under the notification for excisable goods using goods from T.I. 68. The Department contended that the Appellant, manufacturing sutures with and without needles, was entitled to the notification benefit only for sutures with needles. A show cause notice was issued for duty on sutures without needles, leading to a demand of Rs. 89,439.90. The Additional Collector confirmed the demand, prompting the appeal. The Tribunal agreed with the lower authority that the Appellant was not entitled to the notification benefit for sutures without needles.

The Tribunal analyzed the interpretation of the notification, emphasizing that the benefit applied only to sutures with needles, where duty was payable on the excess over duty paid on needles used in manufacturing. It was clarified that the duty on sutures without needles should not be linked to Notification No. 201/79. The Tribunal noted that the Appellant incorrectly declared all sutures as finished products, including those without needles, in their application and show cause notice response. The Appellant's assertion of a bona fide belief in claiming the benefit for all goods was dismissed as lacking credibility. The Tribunal found evidence of deliberate evasion of duty by the Appellant, justifying the application of the longer limitation period under Section 11A(1) of the Act.

Ultimately, the Tribunal dismissed the appeal, citing no grounds for intervention. The judgment underscores the importance of accurate declaration, correct interpretation of notifications, and the consequences of attempting to evade duty, providing clarity on the classification of goods and the application of duty under relevant provisions of the Central Excise Act, 1944.