1997 (7) TMI 267 - AT - Central Excise

Summary

Issues:
Classification of goods under specific sub-headings for duty determination. Applicability of extended period of limitation for duty demand. Justification for penalty imposition based on alleged suppression of material information.

Classification Issue:
The appellants contested the classification of Anti-creep bearing plates and Brake-blocks/brake-shoes under Chapter sub-headings 7302.90 and 8607.00 by the Collector of Central Excise, Nagpur. The appellants sought classification under sub-headings 7307.10 and 7303.10 with the benefit of exemption under Notification 208/83-C.E., which was denied by the Revenue. The appellants eventually accepted the department's classification under sub-headings 7302.90 and 8607.00 but argued on the limitation aspect. They claimed the show cause notice issued beyond the normal period of limitation was not valid as they were under a bona fide belief regarding the classification due to past practices and availability of the exemption notification. The Tribunal, considering past decisions and the appellants' belief, held the duty demand as barred by limitation and set it aside.

Extended Period of Limitation Issue:
The Revenue invoked the extended period of limitation for the duty demand due to alleged suppression of material information by the appellants. The Revenue argued that the appellants mis-declared the goods to claim exemption and failed to disclose vital information regarding the goods being railway construction material or parts of railways. However, the Tribunal found merit in the appellants' argument of bona fide belief based on past practices and held that the extended period of limitation was not applicable. The Tribunal noted that the non-declaration of the entire supply of goods to Railways did not amount to suppression with intent to evade payment of duty, thus setting aside the penalty and impugned order related to duty and penalty.

Conclusion:
The Tribunal, after considering the submissions from both sides, upheld the classification of goods under specific sub-headings but ruled in favor of the appellants on the limitation aspect. The Tribunal found the duty demand beyond the normal period of limitation and set it aside. Additionally, the Tribunal determined that the penalty imposition was not justified as there was no intent to evade payment of duty, ultimately allowing the appeal against the duty demand and penalty.