1998 (11) TMI 267 - AT - Central Excise

Summary

Issues:
Classification of goods under different headings, imposition of duty, personal penalty, applicability of larger period of limitation, exemption notification, requirement of Central Excise License, submission of declaration.

Classification of Goods:
The appellants were manufacturing `C.I. Bearing Plate' and `C.I. Brake Block' classifying them under Headings 7302.90 and 8607.00, respectively, while clearing them under Heading 7307.10 as wholly exempt from duty under Notification No. 208/83. The impugned order confirmed duty demand and imposed a personal penalty based on this classification discrepancy.

Applicability of Larger Period of Limitation:
The appellants argued that due to the change in tariff structure, they believed the goods continued to be exempt under Notification No. 208/83, as they were prior to the new Tariff Act. The appellants contended that the extended period of limitation should not apply as they acted in good faith based on previous practices and tribunal decisions.

Exemption Notification and Central Excise License Requirement:
The appellants claimed that as the goods were wholly exempt from duty, they did not obtain a Central Excise License or fulfill formalities. They argued that the confusion regarding the classification of goods under the new tariff structure led to their belief in continued exemption under the notification.

Submission of Declaration:
The Department argued that the absence of a declaration in the present case distinguished it from previous tribunal decisions. The Department contended that this factor warranted the application of the extended period of limitation.

Judgment:
The tribunal noted the confusion surrounding the classification of goods and the Department's uncertainty under the new tariff structure. Citing previous decisions, the tribunal held that the appellants acted in good faith believing in the continued exemption under Notification No. 208/83. The tribunal rejected the appeal on merits but quashed the demand on the ground of limitation, ruling in favor of the appellants. The decision emphasized the reasonableness of the appellants' belief in the exemption and the unnecessary requirement of a license or declaration. The appeal was allowed based on the above findings.