1998 (12) TMI 158 - AT - Central Excise

Summary

Issues:
1. Whether the duty demand is barred by limitation?
2. Whether Maltodextrin is excisable goods and if so, whether it falls for classification under CET sub-heading 1901.90 or 1702.19?

Issue No. 1 - Duty Demand Barred by Limitation:
The appellants had filed a classification list under CET sub-heading 1901.90 and declared the use of Maltodextrin solution for specific purposes, not for sale outside the factory. The approved classification list was submitted along with the manufacturing process. The Department alleged failure to inform about the product's emergence, but it did not dispute the manufacturing process. The Tribunal held that a mere claim of classification under a different heading does not constitute suppression to invoke the extended period of limitation. As there was no finding of suppression or misdeclaration, the demand raised in 1990 for the period 1986-1987 was time-barred and set aside.

Issue No. 2 - Classification of Maltodextrin:
The Department proposed classifying Maltodextrin under CET sub-heading 1702.19 based on a chemical analysis report. The appellants argued that Maltodextrin was not marketable due to its short shelf life and instability without preservatives. Certificates from research institutes supported the product's unsuitability for market due to spoilage within 24 hours. The Adjudicating authority acknowledged the marketability aspect but did not dispute the certificates provided. The Tribunal emphasized that the product's marketability should be assessed in its current state, not after potential stabilization with additives. Citing a Supreme Court judgment, it concluded that Maltodextrin was not an excisable commodity and thus not subject to duty. The penalty imposed on the appellants was also set aside in light of this finding.

In conclusion, the Tribunal ruled in favor of the appellants, holding that the duty demand was time-barred and that Maltodextrin was not an excisable commodity, therefore not liable for duty. The penalty imposed was also overturned based on the findings regarding the classification and marketability of the product.