2005 (98) ECC 321 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(B)

Shri S.S. Kang, Vice President and Shri V.K. Agrawal, Member (T)

Laxmi Iron & Steel Re-rolling Mills & Ors.

Versus

Commissioner of Central Excise, Jaipur

Appeal No. E/4026-4027/04-NB(B)

[Arising out of Order-in-Appeal No. 339-343 (RM)/CE/JPR-II/2004 dated 11.6.04 passed by Commissioner of Central Excise, Jaipur II.]

Final Order No. 32-33/05-B, dated 24.12.2004, Certified on 12.1.2005

Demand (C. Excise)

Limitation -- Modification of classification was done by Asstt. Commissioner -- In a case where classification list has been filed and approved by the Department after modifying the same, the allegation of fraud, collusion etc. cannot be levelled against the Appellants and accordingly the extended period of limitation cannot be invoked.

[Para 4]

It has not been disputed by the Revenue that the classification list was filed by the Appellants claiming the classification of the impugned products under sub-Heading 7214.90 of the Central Excise Tariff and the Assistant Commissioner approved the classification list by modifying the classification to sub Heading 7211.30. This modification was carried out by the Assistant Commissioner on 24.4.90 itself. Demand has therefore, to be issued within the normal period of limitation specified in the Central Excise Act which was at the relevant time was only six months. The show causes notice for the extended period of limitation can be issued in those cases where the duty has not been paid or short paid on account of fraud, collusion, mis-declaration or suppression of facts, etc. In a case where classification list has been filed and approved by the Department after modifying the same, the allegation of fraud, collusion etc. can not be levelled against the Appellants and accordingly the extended period of limitation cannot be invoked.

Appeal allowed

PRESENT :

Shri K.K. Anand, Adv. for the appellant.

Shri O.P. Arora, SDR for the respondent.

Cases Cited :

1. Easeland Combines v. CCE, Coimbatore, 2003 (85) ECC 496 (SC).................... [Para 3]

2. Sarabhai M Chemicals v. CCE, Vadodara, 2004 (97) ECC 729 (SC)................... [Para 4]

Per : V.K. Agrawal

The issue involved in these two appeals filed by M/s. Laxmi Iron & Steel Rerolling Mills Ltd. and Shri DN Jain, Partner is whether the demand of Central Excise duty is time barred under the provisions of Section 11A(1) of Central Excise Act.

2. Shri K.K. Anand, learned Advocate, submitted that the Appellants manufacture iron and steel products; that they classified the products manufactured by them under sub-heading 7214.90 under the Classification List effect from 20.3.1990; that the Assistant Commissioner approved the classification on 24.4.90, classifying the product under sub-Heading 7211.30 of the Schedule to the Central Excise Tariff Act; that on Appeal the Commissioner (Appeals) also rejected their Appeal; that the Tribunal vide Final Order No. 336/2000-B dated 3.3.2000 remanded the matter to the jurisdictional Assistant Commissioner for physical verification of the goods before deciding the classification list; that the demand has been confirmed for the period 26.3.990 to 3.7.91 by issuing a Show Cause Notice dated 7.2.92; that as such the entire demand of duty is beyond normal period of six months specified in Section 11A(1) of the Central Excise Act.

3. Countering the arguments Shri O.P. Arora, learned Senior Department Representative submitted that the demand is sustainable in view of the judgment of the Supreme Court in the case of Easeland Combines v. CCE, Coimbatore, 2003 (85) ECC 496 (SC) : 2003 (54) RLT 377 (SC) wherein it has been held by the Supreme Court that provision of Section 11A, as amended by Finance Act, 2000 with retrospective effect from 17.11.1980 are applicable to all pending proceedings; that thus demand is not hit by the time limit specified under Section 11 A of the Central Excise Act.

4. We have considered the submissions of both the sides. It has not been disputed by the Revenue that the classification list was filed by the Appellants claiming the classification of the impugned products under sub-Heading 7214.90 of the Central Excise Tariff and the Assistant Commissioner approved the classification list by modifying the classification to sub-Heading 7211.30. This modification was carried out by the Assistant Commissioner on 24.4.90 itself. Demand has therefore, to be issued within the normal period of limitation specified in the Central Excise Act which was at the relevant time was only six months. The show causes notice for the extended period of limitation can be issued in those cases where the duty has not been paid or short paid on account of fraud, collusion, mis-declaration or suppression of facts, etc. In a case where classification list has been filed and approved by the Department after modifying the same, the allegation of fraud, collusion etc. cannot be levelled against the Appellants and accordingly the extended period of limitation cannot be invoked. It has recently been held by Supreme Court in the case of Sarabhai M Chemicals v. CCE, Vadodara, 2004 (97) ECC 729 (SC) that there is no willful suppression of facts on the part of the Appellants as the Appellants had filed the gate passes, invoices and monthly returns which were all duly approved by the Department from time to time. The decision in the case of Easeland Combines is not applicable to the facts of present matter, as the retrospective amendment to Section 11A(1) of the Act does not convert the time bar demand into a demand within the time limit specified in Section 11 A(1) of the Act. The amendment in Section 11A was carried out to provide that the demand can be issued even in those cases where classification list has been approved. However, the amendment nowhere says that demand can be issued beyond the time limits specified in Section 11A(1) of the Act. We, accordingly, allow both the appeals.

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