1998 (10) TMI 191 - AT - Central Excise

Summary

Issues:
1. Classification of brake blocks under Tariff Heading 73.07 or 86.07.
2. Time limitation for demanding duty based on a show cause notice.

Analysis:
1. Classification Issue:
The appellant concedes that the Tribunal previously settled the classification against the assessees in a related case. The advocate argues that the demand of duty is time-barred, citing a bona fide belief similar to the one held by Nagpur Engineering. Several cases are referenced where demands were held as time-barred due to a bona fide belief. The advocate relies on judgments by the Apex Court to support the argument that a larger period of limitation cannot be invoked without proof of willful misstatement or suppression of facts by the assessee. The appellant's plea for setting aside the duty demand as time-barred is based on these grounds.

2. Time Limitation Issue:
The respondent contends that a bona fide belief may prevent penalty imposition but not duty payment. It is argued that the appellants cannot claim a bona fide belief due to their knowledge of the law change and failure to file a correct classification list. Reference is made to previous decisions where failure to file a correct list was not considered a bona fide belief. The respondent prays for dismissing the plea to set aside the duty demand based on time limitation.

3. Judgment:
After considering both sides' arguments, the Tribunal notes the long-standing practice of classifying castings under a specific tariff item with available exemptions. The Tribunal finds that the appellant's belief in the goods' exemption was reasonable, given the historical practice and dealings with Railways. The Tribunal holds that the demand of duty is time-barred due to the issuance of the show-cause notice beyond the normal limitation. The Tribunal rejects the respondent's reliance on previous cases, stating that each case's facts are unique and cannot be uniformly applied. Consequently, the Tribunal sets aside the duty demand as barred by time, thereby disposing of the appeal in favor of the appellant.