TMI Blog2016 (1) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... it was accepted by the audit team that the classification of products is under Notification 72.14. On limitation the appeal succeeds and the demand for the period 01.03.2004 to 31.10.2004 is blatantly hit by limitation and the show-cause notice invoking the period of limitation under the provisions of Section 11A(1) is not correct. The impugned order is liable to be set aside on limitation only - Decided in favour of assessee. - Appeal No. E/12 & 35/11 - Final Order Nos. A/3758-3759/2015-WZB/EB - Dated:- 2-12-2015 - M V Ravindran, Member (J) And C J Mathew, Member (T) For the Appellant : Shri V S Sejpal, Adv For the Respondent : Shri Ashutosh Nath, Asst Commr (AR) ORDER Per M V Ravindran These two appeals are directed against Order-in-Appeal No. PKS/345/BEL/2010 dated 5.7.2010. 2. Since both the appeals raise a common question of law and facts, they are being disposed of by a common order. 3. The relevant facts that arise for consideration after filtering out the unnecessary details are appellant M/s. Sunil Forging Steel Industries (main appellant) have engaged in the manufacture of forged round bars etc. They manufactured forged round bars wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Note in HSN under 7214 and submit that the said Explanation squarely covers their product. He would then draw our attention to the photographs which were produced before the lower authorities and being produced before us as to what kind of products are cleared by them from their factory premises. It is his submission that the products merit classification under Chapter Heading 7214 and not 7326 as claimed by Revenue. He would submit that the product 7326 are other articles of iron and steel forged or stamped but not further worked while the products manufactured by them are in the form of grinding, punching etc. It is his further submission that on limitation, they have got very good case inasmuch as before starting the manufacturing of the products they had informed the departmental authorities in 2002 that they are manufacturing these articles. He would submit that they were filing the returns regularly with the authorities indicating clearances of these goods with a benefit of lower rate of duty as provided in Notification 16/2004. He would submit that the records of the appellant was audited by the audit party and by report on 24.09.2004, there was an audit objection of short p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt as reported at 2003 (156) ELT A210. He would submit that identical issue came in before this Tribunal in the case of Sharda Forging Stampings (P) Ltd. - 2004 (166) ELT 357 (Tri. - Del) and this Bench held that forged articles of iron and steel would fall under Heading 73.26. Aggrieved by such an order, the Apex Court was moved wherein the appeal filed by the assessee therein was dismissed the appeal which would merit classification under Heading 73.26. On limitation it is his submission that the appellant had filed the classification in 1994 would amount that there is suppression. It is his submission that the appellant had not indicated that they are manufacturing forged articles and have also mis-declared on the invoices that the product would fall under the category of iron bars and rods forged. It is also his submission that the year 2002 it is not necessarily covered the classification issued when auditing is being undertaken. 5. We have considered the submissions made at length by both sides and perused the records. 6. The issue involved in this case is whether the articles manufactured by appellant get covered under Heading 7214 or 7326 during the relevant perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pieces cut from bars and rods with a length not exceeding the greatest cross-sectional dimension (heading 73.26) 6.3 The Explanatory note to Chapter Heading 72.14 as reproduced herein above indicates that the pieces cut from bars and rods are not eligible to be classified under 72.14. The Explanatory Note to HSN of Chapter 73.26 also categorically states as under:- This heading covers all iron or steel articles obtained by forging or punching by cutting or stamping or by other processes such as folding, assembling, welding, turning milling or perforating other than articles included in the preceding heading of this Chapter or covered by Note I to Section XV or included in 82 or 83 or more specifically covered elsewhere in the Nomenclature. From the photographs which were reproduced herein above of the articles manufactured by the appellant, it would be seen that these products are correctly classifiable as per the HSN Explanatory Note under 73.26. 6.4 We find that the reliance placed by learned D.R. on the judgement of the Tribunal in the case of TISCO Ltd. (supra) as upheld by the Apex Court is directly on the point and in favour of the Revenue. We find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the appeal of the Revenue. In fact, it may be stated that a similar view was taken by the Tribunal in Sikka Heat Treatment Industry v . Collector of Central Excise, New Delhi reported in1996 (81) E.L.T. 628 and that order of the Tribunal has been confirmed by this Court vide 1997 (94) E.L.T. 5 ( Veekay Industries v. Collector of Central Excise, New Delhi ). The learned Senior Counsel appearing for the appellant has tried to overcome the above precedent by contending that Rule 2(a) of the Interpretation Rules was not considered by the Tribunal in the aforementioned case; but, as we observed supra, in the light of the findings recorded by the Tribunal there is no scope to invoke the Rule that is sought to be relied upon. Hence the appeal is dismissed. No costs. 6.5 In the case in hand the first appellate authority in the impugned order at para 11 has reproduced the manufacturing process as has been stated by the Manager of the appellant which indicates that the appellant used to continue to hammer the forged articles to the required shape and removes the excess/over shaping of the items which is resultant due to hammering from all sides and then used to clear the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l filed by the assessee which would mean that the classification of these kind of articles as manufactured by the appellant herein would be under Chapter Heading 73.26. 7.7 In view of the foregoing we hold that the products manufactured by appellant, in the facts of this case would merit classification under Ch. Heading 73.26. 7.8 As regards limitation, we find that the demand is for the period 01.03.2004 to 31.10.2004 and the show-cause notice is issued on 30.04.2009 by invoking extended period stating that the appellant had suppressed that they are manufacturing forged articles and mis-stating the facts. At the outset we record that the findings of the first appellate authority as well as the adjudicating authority on the limitation are incorrect for more than one reason. 7.9 Firstly, it is undisputed that appellant had been classifying the very same products from 1994 onwards under Ch. Heading 72.14 and also when they started manufacturing of products filed declaration with the authorities seeking to classify the product under Ch. Heading 72.14. Admittedly, during the material period there was no system of approval of the classification list filed by the assessee, at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 2 nd audit report. 10. In our view the entire demand is to be set aside on the ground on limitation only. Revenue authority cannot invoke the extended period of limitation, when the records of the assessee were audited by the officers once but did not find any short payment from records. The 2nd audit party, doing the audit of same period or over lapping period, cannot allege that appellant has miss-stated (sic) or suppressed the facts from the departments. We find that the Hon'ble High Court of Bombay in the case of Rajkumar Forge Ltd. 2010 (262) E.L.T. 155 (Bom.) held in paragraph no.13. 13 It is an undisputed fact that in so far as the Petitioners are concerned, audit of the Petitioners' factory was carried out on three dates i.e. 6th September 1993, 1st November 1995 and 2nd September 1994. The Petitioners vide their letter dated 6th September 1993 have recorded the visit of the audit party and have also replied to the audit objections raised by the said audit party in respect of scrap generated and have informed the authorities that they were debiting ₹ 80,000/at the rate of ₹ 1,000/per Metric Tonne and that they were also debiting differenti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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