COMMISSIONER OF CENTRAL EXCISE Vs. KARTHIK STEELS LTD.

JUDGEMENT

(1.) IN the impugned order, Ld. Commissioner of Central Excise classified the goods in question as articles of Chromium under SH 8112.00 of the CETA Schedule as claimed by the Revenue but held that the demand of duty raised in SCN dated 8.2.95 on the goods cleared during 19.7.91 to 21.7.93 was time -barred. The present appeal of the Revenue is against Commissioner's decision on the limitation issue. In Final Order No. 1661/2001 dated 11.9.2001, this Bench had dismissed the appeal. The department took the order to the Supreme Court in Civil Appeal No. 5323/2002, which was allowed by remand as per order dated 24.1.2003, wherein the apex Court set aside the order of the Tribunal and directed the Tribunal to decide as to the applicability of the proviso to Section 11A(1) of the Central Excise Act to the facts of the case. Hence the Revenue's appeal before us again.

(2.) CERTAIN facts need to be recollected. The respondent was engaged in the manufacture of cast articles of iron and steel as well as unmachined steel castings, falling under Chapters 73, 84 and 87 of the CETA Schedule. Upon verification of their records, the department found that, apart from the above goods, the respondent had also manufactured (and cleared to customers like MRL, BHEL, IOCL and BPCL) castings of alloy containing chromium and nickel predominant by weight over other metals and that such goods were cleared as cast articles of stainless steel under SH 7325.00, during the above period. From the high chromium content in the goods evidenced by the respondent's own test results, it appeared to the department that the respondent had wilfully misdeclared the goods in their classification list as steel castings under SH 7325.00 with intent to evade payment of duty. According to the department, the respondent had suppressed the real identity and composition of the goods with intent to evade duty. It was on this basis that the show -cause notice dated 8.2.95 was issued to the party. In the reply to the notice, the respondent contended that, by virtue of Rules 1 and 3(a) of the Interpretative Rules, the goods would fall under Heading 73.25 and, further, that the extended period of limitation was not invocable against them as their classification list had been approved by the department. Accepting the latter contention of the assessee, Ld. Commissioner held that the larger period of limitation was not invocable against them. This decision of the Commissioner is under challenge on the ground that the classification list filed by the assessee did not mention cast articles of chromium and therefore the Commissioner's finding that they had not suppressed anything before the department is factually erroneous. The grounds of the appeal refer to the respondent's letter dated 19.1.94 wherein they had intimated to the department that they were engaged in the manufacture of steel castings since February 1982; that the constituents of the castings were carbon, nickel, manganese, sulphur, phosphorus, silicon, chromium, columbium, titanium, molybdenum, copper and vanadium; that 75% of their production was without nickel and chromium and the balance 25% with nickel and chromium. According to the department, in respect of this 25% of the respondent's production, they had not filed any classification list, though, as evidenced by their own test results pertaining to these goods, they were aware of the fact that these goods supplied to customers during the relevant period contained higher percentage of chromium than each of the other alloying elements warranting classification as articles of chromium under SH 8112.00 instead of stainless steel castings under SH 7325.00. According to the DR, the respondent ought to have filed separate classification list classifying these goods under SH 8112.00 and instead of doing so, they were wilfully suppressing the composition of the goods from the department and clearing them in the guise of stainless steel castings under SH 7325.00 with intent evade payment of duty. In the circumstances, the appellant contends that the larger period of limitation under the proviso to Section 11A(1) was invocable against the respondents.

(3.) LD . Counsel submitted that the chemical composition of the castings in question had, in fact, been furnished along with the classification list. In this connection, he referred to page 4 of the paper book filed by the respondents, which indicated that the chemical composition had also been made known to the department at the stage of filing of classification list. Nothing was concealed by the respondent. The classification list was approved. RT 12 returns were assessed, whereby the assessee's claim that the goods in question were classifiable as stainless steel castings falling under SH 7325.30 stood once again accepted. It was further pointed out by ld. Counsel that even exact chromium and nickel contents of the castings were discernible to the department from the purchase orders of the respondent's customers, produced along with Part -II price list. The material facts were thus available to the department and it was open to the authorities to verify the facts and, if necessary, raise demand of duty on the respondent within reasonable time. In any case, where the classification list was approved by the department, there was no question of suppression being alleged against the assessee, according to ld. Counsel. In this connection, reliance has been placed on the Supreme Court's judgments in CCE v. C.M.S. Computers P. Ltd., 2005 (182) E.L.T. 20 (S.C) and O.K. Play (India) Ltd. v. CCE, 2005 (66) RLT 657 (S.C). Ld. Counsel has also relied on the Supreme Court's judgment in the case of T.N. Dadha Pharmaceuticals v. CCE, 2003 (55) RLT 20 (S.C). The following decisions of the Tribunal were also cited by Ld. Counsel: