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Customs, Excise and Gold Tribunal – Tamil Nadu
Sakthi Sugars Ltd. vs Commr. Of C. Ex. on 6 September, 2000
Equivalent citations: 2001 (138) ELT 709 Tri Chennai


ORDER

S.L. Peeran, Member (J)

1. This appeal arises from Order-in-Original No. 25/93 dated 26.04.93 passed by Commissioner of Central Excise, Coimbatore confirming duty demand of Rs. 8,47,097.44 and imposing penalty of Rs. 10,000/-. The issue for consideration is as to whether the 12 items which are described in the show cause notice are reclassifiable under various headings of Chapter 84 or 87 for the short period of 01.03.88 to 03.11.88 while reclassifying the goods which had been approved under sub-heading 7325.10 of Central Excise Tariff. The show cause notice was issued on 14.12.89 which was in supercession of show cause notices issued on 28th August 1986 and 22.12.88. This show cause notice was issued by the Collector while the earlier show cause notices for the same period and same issue had been issued by the Superintendent of Central Excise. The appellants had been filing classification list from time to time and the same had been approved which is not in dispute. The show cause notice intended to invoke Rule 2(a) of Interpretative Rules to reclassify the goods on the plea that the item have attained the essential characteristics of the final product namely parts of motor vehicles and pumps and as they were manufactured as per drawings of the parts and hence they are excluded from Chapter 73 and are required to be classified under the respective heads of Chapter headings 87.08 and 84.13 respectively by denying the benefit of Notification No. 208/83 dated 01.08.83 which was applicable for cast article of iron falling under heading 7325.10 which had been granted to the appellants.

2. The appellants’ contention was that the items had not attained the essential characteristics and they were continued to remain as castings and they were removed as such. They also pleaded that the item was also required to undergo several processes to attain the essential characteristics of parts of Motor vehicles which was not done by them and was carried out at the purchaser’s end. They further contended that the classification list had been approved from time to time and there are no facts which had been suppressed and hence the demands reissued by the Collector by show cause notice dated 14.12.89 was clearly barred by time. Further, it was pleaded that there was no allegation in the show cause notice indicating to “intention to evade duty” and hence proviso to Section 11A was not invokable. All these pleas were negati-vated by the Commissioner and the demands were confirmed holding that the item had attained the essential characteristics of final product namely parts of Motor vehicles requiring reclassification under respective headings of Chapter 84 or 87 by applying Rule 2(A) of Rules of Interpretation. He also negatived the plea of the non-applicability of extended period and confirmed the demands and imposed penalty.

3. Ld. Counsel J. Shankarraman submits that the issue is no longer res integra as this very issue was agitated before the Tribunal in larger number of appeals commencing from Shivaji Works Ltd. v. CCE as reported in 1994 (69) E.L.T. 674 (Tri.) wherein the very issue for reclassifying the castings from heading 73 to Chapters 84 to 87 was negatived and the Tribunal clearly overruled the departments’ stand of applicability of Rule 2(a) of the Interpretative Rules of the Tariff. He points out that this judgment has been taken into consideration for large number of earlier judgments also and has noted that the items removed continued to remain castings as it had to undergo various processes of manufacture to attain the stage of essential characteristics of final product. He submits that the issue was reconsidered again by the Tribunal in the case of Apex Steel Pvt. Ltd. v. CCE by a bench of 3-Members as reported in 1995 (80) E.L.T. 368 (Tri.) and after taking into consideration various aspects of the matter, the Revenue’s contentions were negatived. Ld. Counsel submits that the issue was again heard in the case of Paramount Centrispun Castings Ltd. v. CCE as reported in 1995 (77) E.L.T. 705 (Tri.) and on this very items and the findings given in Shivaji Works (supra), Aravali Forgings Ltd. v. CCE [1994 (70) E.L.T. 693 (Tri.)] and that of Echjay Industries Ltd. v. CCE [1994 (72) E.L.T. 98 (Tri.)] were reiterated and followed. He submits that these judgments have attained finality of Supreme Court by not accepting the Revenue appeals as can be noticed from the rejection of the appeal of Paramount Centrispun Castings Ltd. v. CCE as appearing in A176 of Volume 83 [1996 (83) E.L.T. A176]. He submits that as there is no suppression in the matter and classification list had been approved from time to time, therefore there is no cause for invoking larger period in confirming the demand and imposing penalty. Ld. Counsel also submits that the dispute concerned only to the short period as shown in show cause notice and for subsequent period the department has been accepting the item as castings and even the show cause notice itself conceded that for the subsequent period the item has been treated as unmachined castings and the benefit of Exemption Notification No. 275/88 has been extended.

4. Ld. DR Shri S. Kannan reiterates the contention and submits that the Revenues contentions are required to be accepted by rejecting the appellants’ plea.

5. On a careful consideration of the submission and on perusal of the records and the citations referred to, we notice that the issue has been gone into in great detail in the citations referred to by Id. Counsel. The item had not undergone various prcoesses to attain the essential characteristics of parts and they have been removed as castings only. Therefore, their contention that the item continues to remain as castings for classification under Chapter 73 is reinforced in the judgments cited by the Id. Counsel. The issue is no longer res integra and therefore, following the ratio of the same, the impugned order is set aside and appeal allowed. We may also add that the appellants’ contention on time-bar is also acceptable as there is no suppression of any facts and the department had been accepting the declarations given in the classification list from time to time and even for subsequent periods, the department has accepted the item to be unmachined castings. In that view of the matter, the impugned order is set aside and the appeal is allowed.


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