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2016 (3) TMI 266 - CESTAT NEW DELHI

2016 (3) TMI 266 - CESTAT NEW DELHI - TMI - Extended period of limitation - Availability of exemption under notification 29/2004-CE - re-classify the product under heading 7019 and to deny the exemption - sustainability to demand for extended period - Held that:- The original authority clearly indicated in the order that the appellant has declared in their ER-1 returns that they are engaged in the manufacture of clearance of dust collection bags manufactured out of cotton fabric, poly fabric and .....

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of classifying the product, the assessee followed their understanding. When the material facts are disclosed, a particular classification followed by the appellant will not make a case for suppression. The Hon’ble Supreme Court in the case of [Desons Pultretaknik (2003 (1) TMI 115 - SUPREME COURT OF INDIA )] held that merely claiming a classification under a particular heading cannot be a willful misstatement or a suppression of facts. The Tribunal in the case of [AB Mauri India Pvt. Ltd. 2010 ( .....

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d due to reclassification as confirmed by the Original Authority with applicable interest will be restricted to the normal period of limitation. The appeal is disposed of in these terms. - Decided in favour of assesseee - Excise Appeal No. E/1656/2007-Ex[DB] - Final Order No. 50134 /2016 - Dated:- 2-2-2016 - MR. S.K. MOHANTY, MEMBER (JUDICIAL) AND MR. B. RAVICHANDRAN, MEMBER (TECHNICAL) For the Petitioner : Mr. B. L. Narsimhan(Advocate) For the Respondent : Mr. Govind Dixit, DR ORDER PER B. RAVI .....

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g 70199090 and not under tariff heading 59119090. Classification is relevant to decide the availability of exemption under notification 29/2004-CE. SCN cum Demand notice was issued to the appellant to re-classify the product under heading 7019 and to deny the exemption. The proceedings concluded with the issue of order in original dated 9.5.2007. The Original Authority held that the correct classification of dust collection bags manufactured out of woven glass fabrics will be tariff heading 7010 .....

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o 28.11.2006. The appellants are engaged in the manufacture of these impugned goods for a long time. The dispute regarding classification arose for the first time in 2004 as certain concessions were given in terms of notification 29/2004-CE dated 9.7.2004 which is applicable to the goods heading 59.11 and not to the goods under chapter 70. They have been manufacturing dust collection bags since 1994 and from that time onwards they have been filling various declarations on the raw materials, manu .....

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e of department for more than a decade. Declarations under Rule 173B were also filed in fact there were certain disputes regarding credit taken on the glass woven fabrics on certain technical issues. There were regular audits on their records and the classification of goods as mentioned in their documents and invoices are always open for scrutiny. The ER-1 return filed prior and post 2004 contained the same type of material information and there is no deliberate suppression of any fact from the .....

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order, it was mentioned that the modvat credit was proposed to be disallowed on woven glass fiber of chapter heading 7019. He also relied on various case laws to submit that extended period of limitation is not invokable in cases of classification disputes; in cases where declarations claiming a particular classification have been filed; where regular audit were being conducted on the records of the appellant assessee. 3. The Ld. AR contested the submissions made by the counsel for the appellan .....

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their obligation under self assessment procedure. The Ld. AR drew our attention to the various case laws relied upon by the Original Authorities. 4. We have heard both the sides and examined the records. 5. The only point for decision in this appeal is the sustainability to demand for extended period. The Original Authority discussed at length the question of application of limitation for the present demand. Regarding declarations filed under Rule 173B and Rule 57G and Rule 173H of the erstwhile .....

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in that case had made various declarations which are factually found to be wrong and misleading. In the present case, there is no such allegation of misleading or wrong declaration. The issue is the correct classification of one type of dust bags manufactured by the appellant. The said dust bags made out of woven glass fabric has been in existence for many years. The dispute came with the allegations of fraud, suppression and willful misstatement only after the issue of notification 29/2005-CE w .....

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le 173B and RT-12 returns filed by the appellant. It was noted that the appellants in that case misdeclared the product under Rule 173B with the intention to claim benefit of exemption. It may be noted here that in the present case that there is no requirement for a declaration under Rule 173B during the impugned period which is post 2004. Infact, during the impugned period there is no allegation or evidence to the effect that the appellant has filed any intimation or declaration to the Departme .....

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uty by availing ineligible exemption notification is not sustainable. We find that the Original Authority also emphasized that in self assessment system, the assesse should have intimated the Department about the correct classification or eligibility of exemption under the said notification. By claiming an unavailable exemption the appellant was held to be indulging in suppression. We find such allegation will not stand legal scrutiny. The original authority clearly indicated in the order that t .....

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