BEICO ELECTRICAL INSULATIONS Vs. C.C.E.

JUDGEMENT

(1.) THE appellants are manufacturers of, inter alia, laminated non -wovens and were paying duty on those goods under sub -heeding 56.03 of the Central Excise Tariff. A Show Cause Notice No. 13/94, dated 25 -3 -1994 was issued to the appellants by the Collector of Central Excise, Aurangabad alleging that the goods were correctly classifiable under sub -heading 3920.37 and the appellant is liable to pay differential duty of over Rs. 24 lacs during the period 1989 -90 to 1991 -92 (upto February, 1992) on account of the wrong classification (and payment of duty at lower rate). It was alleged in the Notice that the assessee had misdeclared the classification and had suppressed the fact regarding pro -dominance of the ingredients which were material for the classification of the goods, thereby attracting the Proviso to Section 11A of the Central Excise Act, 1944 for the purposes of recovering the duty short levied. Classification list from time to time indicating the correct description of the goods and this classification had been approved by the Departmental authorities indicating therein the rate at which the goods are to be assessed and duty paid. The appellants submitted that they had made no suppression of facts or made any misdeclaration and that payment of duty being at the rate approved by the Departmental authorities, there could be no allegation that there was suppression of fact or mis -declaration. The appellants also submitted that classification of goods is essentially a function of the Departmental authorities and allegation of misdeclaration of classification cannot lie against an assessee. They also submitted that it is settled law in the light of the decision of the Apex Court in Padmini Products [1989 (43) E.L.T. 195 (S.C.)] that the extended period as provided in Section 11A will not be attracted if no suppression or misdeclaration is involved. They therefore, submitted that the entire demand having been issued beyond the normal period of six months was time barred. The impugned order held that the correct classification of the laminated non -woven produced by the appellant was under Chapter Heading 3920.37 of the Central Excise Tariff in view of the pro -dominance of polyester film. The Collector also held that as the important criterion for classification of the goods under 56.03 (as claimed by the appellant) was the composition of the material and as the appellant had withheld the material information in that regard, which had direct bearing upon the assessment of the final product, the charge of suppression of facts and mis -declaration of the product was correctly made. He held as under : -

(2.) WE have perused the records of the case and considered the submissions made during personal hearing. We find that the clearances were always under approved classification lists and the appellants had paid duty at the rates approved in those classification lists. The goods were declared correctly as laminated non -wovens in the classification lists. If the Central Excise authorities required any more details about ingredients or any other details, it was for them to ask for and obtain those particulars before approving the classification list, as Central Excise classification of products is a responsibility of Central Excise officers. In these facts and circumstances, the allegation of misdeclaration or suppression of facts is not sustainable. Therefore, no demand could be raised for the extended period. The Collector's finding to the contrary is clearly incorrect. The appeal, therefore, succeeds on the ground of time bar. It is allowed with consequential relief to the appellant in accordance with law.