TMI Blog2000 (7) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... ant. The appellant had claimed classification of these foils and pouches under chapter 76 (foils under heading 76.07 and of the pouches under 76.12). The department was of the view that they are classifiable under heading 3920.38 and the pouches under heading 3920.90. Following the issue of show-cause notice and subsequent proceedings, the Commissioner's order confirmed the classification proposed. He also in addition imposed a penalty equal to the duty demanded of Rs. 3,38,90,754/- under section 11AC and recovery of interest under section 11A. Heading 76.07 reads as follows. "Aluminium foil (whether or not printed or backed with paper, paperboard, plastics or similar backing materials) of a thickness (excluding any backing) not exceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minated with polyethylene. He therefore finds recourse to the Interpretative rules justified. He finds that in the material plastic predominantly over the aluminium in terms of thickness and weight, as seen by the chemical test. He refers to the explanatory Notes to the Harmonized System of Nomenclature to chapter 39, providing that classification of products consisting of plastic plates, sheets, foils, etc. separated by a layer of another material such as metal foil, paper, paperboards, etc. are covered by chapter 39 provided that they retain the essential characteristics of articles of plastic. He finds that the goods in view of the predominance of the plastic by weight have the essential characteristic of plastic. He distinguishes the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plastics. When such products could be classifiable under chapter 39, note to chapter 76 is also supported by the fact that (unlike in the case of aluminium backed with paper) there is no note in chapter 39 corresponding to note (m) of chapter 48 excluding from that chapter metal foil backed with paper or paper board. The decision of the Tribunal in India Foil v. CC - 1998 (99) E.L.T. 101 will not help in choosing the alternative between chapter 39 and chapter 76. It was concerned with classification of aluminium foil pouches either under heading 76.07 or 76.01. 5. There is no dispute that the products, foils, with which we are concerned, consists of two layers of plastics separated by a layer of aluminium. The advocate for the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll have to be resorted to since it will be evident from the precedent discussion that none of the rules preceding it would apply. 6.The reliance on the Supreme Court Judgment in CCE v. Cotspun 1999 (113) E.L.T. 353 to say that there cannot be no short levy when clearances are in accordance with the approved classification list would not help the appellant in view of the amendment carried out in Finance Act, 2000, is that this provision has the effect of nullifying the retrospective effect of the judgment of the Supreme Court in CCE v. Cotspun and similar judgment that there cannot be short levy in a situation where duty has been paid in accordance with an approved classification list. 7. On merits therefore the classification of both th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report and initiated its action for short levy on the result of a further test report of samples drawn in January, 1998. Accordingly, the entire demand for duty contained in the notice dated 2nd April, 1998 will be barred by limitation as well as demand for clearances beyond six months from the relevant date contained in the notice dated 4th March, 1998 and 17th August, 1998. We are unable to determine this period exactly in the absence of dates of receipt of the notice by the appellant. 9.This position would hold true notwithstanding that we are unable to accept the contention that the circulars of the Board issued in 1989 and 1990 are contradictory and could give rise to doubts in the assessee's mind. The Board's circular No. 6/89-C.E. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered it necessary to deal with the departmental representative's argument, that penalty could be imposed on a manufacturer who had evaded duty prior to 28-9-1996 the date of its enactment. 11. In our view penalty could not be imposed on the appellant under Rule 173Q either. As we have noted, the classification of the goods as claimed by the appellant had been approved even after the goods were tested in 1991, and continued to be approved not less than 8 years thereafter. If the departmental authorities themselves were satisfied, after subjecting the goods to testing, that they were correctly classified, there is no question of expecting the assessee to think to the contrary, to its own disadvantage. The appellant having conducted its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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