2018 ACR 81 CESTAT Chandigarh
HIM TEKNOFORGE LTD. GEAR DIVISION VERSUS CCE, CHANDIGARH
Hon’ble Mr. Ashok Jindal, Member (Judicial) And Hon’ble Mr. Devender Singh, Member (Technical)
No.- Appeal No. E/2766/2009 Order No.- Final Order No. 62475 / 2018 dated June 12th 2018
Note – Extended period of limitation is not invocable for issues pertaining to classification of items in question under the tariff entry.
ORDER
The appellant is in appeal against the impugned order praying for demands for the extended period of limitation and penalty against the appellant are to be set aside.
2. The facts of the case are that during the period 01.09.1999 to 30.09.2002, the appellant is engaged in manufacture of gear of tractors and harvesting combines and also manufacturing of parts such as pinions, couplings and hub/brake axles transmission shafts meant for harvester combines and threshing machines and classifying the same under heading 84.33 of first schedule to Central Excise Tariff Act, 1985. To that effect, the appellant port their registration certificate amended on 02.09.1999 and also filed their classification list showing the description of goods as parts of harvester combines and threshing machines classifying under chapter heading 84.33. The classification list was approved wherein the goods are not liable to pay duty. The appellant cleared the goods namely pinions, couplings and hub/brake axles transmission shafts meant for harvester combines and threshing machines and classifying the same under chapter heading 84.33 and clearing the same without payment of duty. Later on, it was found that the appellant is clearing those goods without payment of duty, investigation was started and it was found that the correct classification of the said goods is under chapter heading 84.83, therefore, the proceedings were initiated against the appellant and a show cause notice for the period of 01.09.1999 to 30.09.2002 was issued by invoking extended period of limitation on 05.11.2002. The matter was adjudicated. The demand of duty along with interest and equivalent amount of penalty was imposed. The said order was challenged before the ld. Commissioner (A) who hold that the extended period of limitation is not invokable and confirmed the demand within the period of limitation and allowed the cenvat credit on inputs and also dropped the penalty against the appellant. The said order was challenged before this Tribunal and this Tribunal remanded matter back to the ld. Commissioner (A) to pass a speaking order in the light of the decision of this Tribunal in the case of Raja Forging & Gears reported in 2009 (233) ELT 404 (Tri. Del.). In remand proceedings, the ld. Commissioner (A) hold that the extended period of limitation is invokable. Consequently demand as proposed in the show cause notice is confirmed along with interest and penalty equal to duty was confirmed. Against the said order, the appellant is before me.
3. This is the second round of litigation. The ld. Counsel for the appellant submits that in this case it was the issue of interpretation of classification of the goods in question and the appellant port amended registration certificate and filed the classification list before the authorities below, it was not objected, in that circumstances, being the issue of interpretation, the extended period of limitation is not invokable. Consequently, the penalty is also not imposable.
4. On the other hand, the ld. AR opposed the contention of the ld. Counsel and submits that the appellant did not file correct classification list giving the description of the goods, therefore, the extended period of limitation is invokable.
5. Heard the parties and considered the submissions.
6. In this case, this is the second round of litigation and in earlier round of litigation, this Tribunal remanded matter back with the following observation:
“4.2 We surprise when the most question of classification was before the learned appellate authority below, why he failed to decide that issue by a reasoned and a speaking order. He proceed to pass an elaborate order to say that penalty was not leviable for the reason that the appellant had filed the classification list and that was within the knowledge of the Revenue. He also observed that extended period was not invokable. We also surprise that when first appellate authority has to bring out clearly the matter in controversy by a speaking order reason of decision and decision on the controversial issue which is a legal requirement, he failed to follow the same. Considering that there is a legal infirmity of above nature and when the impugned order not being speaking and reasoned on the issue of classification was passed. We are of the opinion that the learned appellate authority should do well to make an exercise in the light of the decision in Raja Forgings & Gears Ltd. aforesaid. While doing such exercise, the authority may come across all material facts as to invokability of the extended period so also as to leviability of penalty if any.
5. In view of the aforesaid observation and findings, we remand the matter back to the learned appellate authority to decide the appeal in the light of Raja Forgings case aforesaid and determine the classification, in accordance with law as well as invokability of the extended period and leviability of penalty, if any, by a speaking and reasoned order. The appellant deserves fair opportunity of hearing before that authority while deciding the matter afresh in the light of law and material facts borne by record.”
7. In this Tribunal remanded matter back to pass an appropriate order in the light of the decision in the case of Raja Forging and Gears (Supra), therefore, it is necessary to examine the decision of this Tribunal in the case of Raja Forgings and Gears (Supra). In the case of Raja Forgings & Gears (Supra), the assessee was manufacturing gears and transmission for motor vehicle and harvester combines and classifying the same under chapter heading 84.33. This Tribunal held that the said classification is not correct and the same are to be classified under chapter heading 848390, therefore, we hold that the merit of classification of the goods in question which are identical to the case of Raja Forgings & Gears (Supra) are to be classified under chapter heading 848390 in the case of Raja Forgings & Gears (Supra) this Tribunal has further observed as under:
“7. In view of the above, we hold that the impugned goods, namely, gears, shaft coupling shall be classifiable under 848390 as held by the original authority. We, therefore, set aside the order of the Commissioner (Appeals) and restore the order of the original authority. While restoring the order of the original authority, we do not find justification for imposition of penalty on the respondent, as the case involves mere legal interpretation of tariff entries and no misdeclaration or suppression of facts with intention to evade can be attributed to the assessee. The classification as proposed by the Department is accepted. Duty demand along with interest is confirmed. However, the penalty is set aside.”
8. As this Tribunal in the case of Raja Forgings & Gears (Supra) has held that this is the case involving interpretation tariff entries, therefore, there is no mis-declaration or classification can be attributable to the assessee. Admittedly, in this case also the appellant have described their goods as part of harvesters combines which is not disputed the items manufactured of the appellant are harvester transmission. In that circumstances, this is the issue of interpretation or classification of the goods in question, therefore, relying on the decision of Raja Forgings & Gears (Supra) wherein this Tribunal dropped the penalty holding that the issue of interpretation. We hold that in this case also as it is the issue of correct classification of the goods in question, therefore, the extended period of limitation is not invokable. Consequently, penalty on the appellant is not imposable.
9. With these observations, we dropped the demand pertaining to the extended period of limitation, hence set aside penalty on the appellant.
With these observations, the appeal is allowed.
( Dictated and pronounced in the open court )