1997 (8) TMI 328 - AT - Central Excise

Summary

Issues:
1. Classification of Diesel Engines under Tariff Item 29(i) or 29(ii.
2. Invocation of the larger period of limitation for duty payment.
3. Allegations of wilful suppression of facts by the appellants.

Classification Issue:
The case involved a dispute over the classification of Diesel Engines used by the appellants in the manufacture of Diesel Shunters under Tariff Item 29(i) or 29(ii. The Commissioner had held that the classification under Tariff Item 29(i) was final, which was confirmed by the Tribunal in a previous order. The appellants did not contest this classification issue during the current proceedings.

Invocation of Larger Period of Limitation:
The dispute arose when a show cause notice was issued alleging that the Diesel Engines should have been classified under Tariff Item 29(i) instead of 29(ii, leading to a demand of Rs. 2,46,358.95 against the appellants. The Commissioner invoked the larger period of limitation for duty payment based on the alleged misclassification. However, the Tribunal found that the appellants had disclosed all relevant information in their Classification List, and there was no intent to evade duty. The Tribunal held that the invocation of the larger period of limitation was unjustified, as the Department was aware of the appellants' manufacturing process and no material facts were suppressed. Therefore, the appeal was allowed, and the impugned order was set aside.

Allegations of Wilful Suppression:
The Department alleged that the appellants wilfully suppressed the fact that the Diesel Engines should have been classified under Tariff Item 29(i) during the initial classification process. However, the Tribunal found that there was no evidence of wilful suppression or intent to evade duty. The appellants had provided all necessary information in their filings, and the Department was aware of the manufacturing process. The Tribunal emphasized that for invoking the larger period of limitation, there must be an "intent to evade," which was not present in this case. Consequently, the Tribunal ruled in favor of the appellants, granting them relief from the allegations of wilful suppression and setting aside the demand for duty payment based on the larger period of limitation.

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