Custom, Excise & Service Tax Tribunal
Larsen & Toubro Ltd vs Commissioner Of Central Excise, Mumbai on 2 March, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT No. I
APPEAL No.E/2860/03
(Arising out of Order-in-Original No.14-15/2003 dated 29/05/2003 dated passed by Commissioner of Central Excise, Mumbai-II)
For approval and signature:
Honble Mr. M.V. Ravindran, Member (Judicial)
Honble Mr. P.R. Chandrasekharan, Member (Technical)
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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
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Larsen & Toubro Ltd., Appellant
Vs.
Commissioner of Central Excise, Mumbai Respondent
Appearance:
Shri.Prakash Shah, Advocate for appellant
Shri.V.K. Singh, SDR, for respondent
CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial)
Honble Mr. P.R.Chandrasekharan, Member (Technical)
Date of Hearing : 02/03/2011
Date of Decision : /04/2011
ORDER NO
Per: P.R. Chandrasekharan
1. This appeal is directed against the order-in-original No.14-15/2003 dated 29/05/2003 passed by the Commissioner of Central Excise, Mumbai-II.
2. The issue involved is the classification of Programmable Logic Controllers manufactured by the assessee M/s. Larsen & Toubro Ltd. The assessee had filed a classification list No.2/86-87 dated 01/03/86 classifying the programmable logic controllers manufactured by them under heading No.84.71 of Central Excise Tariff Act, 1985 claiming it to be an automatic data processing machine and also claiming benefit under Notification No.64/86-CE dated 10/02/86 as amended. The product supplied by the assessee to the various customers were described as L & T Yaskawa R-84 H Programmable Controller System.
2.1 The department, who investigated the matter came to the conclusion that the goods manufactured and cleared by the assessee were Control Panels incorporating programmable logic controllers, which are different from the automatic data processing machines falling under heading No.84.71 and are classifiable under heading No.85.37 of CETA, 1985, which covers Boards, Panels, (including numerical control panels), consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading No.85.35 or heading No.85.36, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of Chapter 90, other than switching apparatus of heading No.85.17. Accordingly, two show-cause notices dated 29/09/88 and 19/10/88 were issued to the assessee asking them to show-cause as to why,- (i) the goods manufactured and cleared by them should not be classified under heading No.85.37 of the CETA, 1985 during the period from 01/03/86 to 30/09/88; (ii) differential duty of Rs.53,16,956.60 should not be demanded under the proviso to sub-section (1) of Section 11A of the Central Excise Act, 1944 read with Rule 9 (2) of the Central Excise Rules, 1944; (iii) penalty under Rule 173Q of the said Rules should not be imposed and (iv) land, building, plant and machinery, etc. used in connection with the manufacture, production, storage, removal or disposal of such excisable goods should not be confiscated under Rule 173Q (2) of the said Rules.
2.2 The assessee contended that their product was classified under tariff item 33DD dealing with computers prior to the introduction of HSN based CETA, 1985 (5 of 1986), effective from February 1986 and as per the instructions issued by the department and the comparative chart indicating the comparison between the chapters of the old and new tariffs, it was stated the goods covered under erstwhile item 33DD would now be covered under Chapter 84. Since their product was incorporating automatic data processing machines, they classified the same under heading No.84.71 as no other appropriate heading was available under Chapter 84. They further argued that the programmable controllers manufactured by them consisted of Central Processing Unit, proportional-integral-differential, analogue control, digital inputs/output interfaces programmers and these are sophisticated electronic data processing machines built up from micro processors, integrated circuits, diodes and other semi conductor devices. These controllers are programmed to take care of specific requirement of the user and once programmed, they can perform the tasks desired by the user without any human intervention. They contended that their products are software based intelligent devices which can hold user configurable programme, and based on this programme are able to monitor a given situation or a set of situation in the plant, perform logically and give out suitable instructions and information (by doing arithmetical computations) to the field equipment. Therefore, these are rightly classifiable under automatic data processing machine falling under chapter heading No.84.71. They further argued that programmable controllers are not for electric control or for the distribution of electricity as described under heading No.85.37. It was submitted that the programmable controllers manufactured satisfied the criteria laid down in Boards order No.49/3/97-CX dated 11/09/05/97 and as such they were classifiable under heading No.90.32 and classification under heading No.85.37 was not sustainable in law.
3. The case was adjudicated by the Ld. Commissioner of Central Excise, who held that only machines having data processing operation as a main function can be classified under heading No.84.71. The programmable logic controllers are used for controlling industrial plant and machinery in a desired manner. The programmable logic controller is a combination of machines, one of its component machine, being 84.71, intended to control plant and machinery in industrial environment. As per note 4 to Section XVI of HSN where a machine including a combination of machines) consists of individual components (whether separate or interconnected by piping, transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the headings appropriate to that function. In view of this position, the Commissioner found that although the product is programmable logic controller incorporating an automatic data processing machine and performing specific functions other than data processing is classifiable in the heading corresponding to the function of that machine or in the absence of a specific heading and, therefore, does not fall classification under chapter heading 84.71 of the CETA 1985. The Commissioner further observed that the programmable logic controllers are used in electric control of machines, plant and plant management and from the literature given by the assessee, it was seen that the main system of the programmable logic controllers are having a panel base and a door equipped with two or more apparatus of chapter heading 85.35 or 85.36 such as switches and relays and, accordingly she concluded that the product merits classification under heading 85.37. As regards the CBEC 37B order No.49/3/97-CX dated 09/05/97 where a distinction has been made between programmable logic controller and programmable process controller, relied upon by the assessee for alternate classification under heading no.90.32, the Commissioner found that the assessee had been describing their product as programmable logic controllers/programmable controllers. Since as per the description given by the assessee, the product is programmable logic controller/programmable controller which are used for control of individual machines and complete plants and overall plant management, she concluded that the product manufactured by the assessee falls under heading 85.37 and not under heading 90.32. Accordingly, she confirmed the duty demand of Rs.53,16,956.60 under Section 11A of the Central Excise Act, 1944 classifying the product under heading No.85.37 of the CETA, 1985. She also imposed a penalty of Rs.25.00 lakhs on the assessee under Rule 173Q of Central Excise Rules, 1944. She further confiscated land, building, machinery, etc., of the assessee but gave an option to redeem the same on payment of fine of Rs.10.00 lakhs under Section 34 of the said Central Excise Act. It is against this order, the appellant is in appeal before us.
4. In their appeal, the appellant has given up their claim for classification under heading No.84.71 and they are claiming that the correct classification would be under heading No.90.32 of the CETA, 1985. Their arguments are as follows.
(1) As can be seen from the show-cause notice, the product manufactured by them is used in many industrial application for controlling various parameters, such as temperature, pressure, level of fluid flow and speed etc. in industrial or commercial process in various automatic industrial plants like cement, thermal power station, steel plant, etc. (2) As per CBEC 37B order No.45/3/96-CX dated 06/08/96, instruments and apparatus which consists essentially of (a) a measuring device (b) a control device and (c) a starting, stopping or operating device are to be classified under heading N0. 90.32. Programmable logic controller manufactured by them consists of
(i) a control device by way of servo meter, LED numeric indicators and indicator; (ii) it performs starting, stopping or operating by means of motor and magnetic contractor; (iii) it further performs the measuring operations by means of pulse generator, contract input, non-contact input, digital switch, sensor, converter. Therefore, it is their contention that the product manufactured by them falls under the heading No.90.32 in terms of the 37B order dated 06/08/96.
(3) Difference between the programmable logic controllers and programmable processing controllers have been clearly brought out in the CBECs 37B order dated 09/05/97. On a perusal of this order, it can be easily seen that their product merits classification under heading No. 90.32.
(4) They are also placing reliance on the Honble apex Courts decision in the case of NI systems (India) Pvt. Ltd., reported in 2010-TIOL-52-SC-CUS and also on the Tribunals decision in the case of Siemens Ltd. in order No.A/01 & 02/2911/EB/C-II dated 29/12/10 in appeal No.E/2615/03 & E/389/05. The ratio of these decisions are applicable to their case and accordingly, the product manufactured by them would merit classification under heading No. 90.32 of the Central Excise Tariff and not under heading No. 85.37.
(5) They further contended that the departments classification of their product under heading 85.37 is not tenable. In the the facts of the present case, heading No. 85.37 as stood at the relevant time did not cover numeral control apparatus and inclusion of numerical control panels under heading 85.37 came about only in 1997 consequent upon the amendment to heading 85.37.
(6) They further submit that the demand invoking the extended period of time is quite invalid for the following reasons. Prior to introduction of new tariff 1986 their product was being classified under tariff item No.35DD and in the new tariff corresponding heading was 84.71 as per the trade notice issued by the department. Accordingly, they have correctly classified the product under 84.71 and there was no intention on their part to evade any excise duty on account of fraud, suppression, willful mis-statement of facts. The classification lists submitted by the appellant assessee at the relevant time were also approved by the competent authorities and the goods were cleared on payment of excise duty as per the approved classification list. Therefore, invoking the extended period of time is totally incorrect, as has been held by the Honble High Court of Bombay in the writ petition filed by them vide judgement dated 16/09/2002 and also in the light of the judgement of the Honble apex court in the case of O.K. Play (India) Ltd., Vs. CCE, Delhi-III, 2005 (180) ELT 300 (SC), CCE Vs. Dabur (India) Ltd., - 2005 (182) ELT 308, CCE Vs. Muzzaffarnagar Steels - 1989 (44) ELT 562. In view of this position, no penalty is also warranted under Rule 173Q as has been held by the Tribunal in the case of Escorts Ltd., Vs. CCE, New Delhi-II 2002 (141) ELT 72 (Tri-Del) wherein it has been held that once the classification list is filed, penalty under Section 173Q is not warranted and the said decision of the Tribunal has been maintained by the Honble apex Court in the same case reported in 2003 (152) ELT A257 (SC).
(7) As regards the proposal for confiscation of plant and machinery, the same is not warranted as has been held in H.T. Bhavani Chemicals (P) Ltd., Vs. CCE Baroda 1997 (92) ELT 502.
5. The Ld. DR on the other hand reiterates the findings given by the Ld. Commissioner. He submits that as per the product literature and the various classification lists filed by the assessee, the goods have been described as programmable logic controllers/programmable controllers and such products are rightly classifiable under heading No.85.37 of the CETA, 1985. He submits that as per the appellants own submission made before the department vide letter dated 12/07/88 addressed to the Superintendent, Central Excise Range-V, Division-III, Mumbai, the product has been described as consisting of; (i) programmable micro-processor/micro-controller based Central Processing Units with memory (ii) Communication interfaces (iii) power supplies (iv) input and output devices (v) Programming devices. All the units are inter-connectable to the Central Processing Unit. The function of the product is described as storing the processing programme and data necessary for the execution of the programme; being freely programmable in accordance with the requirement of the user; performing specific data handling and arithmetic computations; and executing, without human intervention, a processing programme which requires them to modify their execution by logical decisions during the processing run. These are general purpose data processing machines, which can be freely programmed to satisfy the need of an industrial user and one of their use is sequencing of plant functions. As per the HSN explanatory notes at para 1391under heading No. 85.37 as it stood in 1986, programmable controllers are digital apparatus using a programmable memory for the storage of instructions for implementing specific functions such as logic, sequencing, timing, counting and arithmetic, to control, through digital or analog input/output modules, various types of machines and, thus, they are specifically covered under heading 85.37.
5.1 The Ld. DR also relies of the judgement of this Tribunal in the case of SPA Computers Ltd., Vs. CCE, Bangalore 2005 (180) ELT 497 (Tri-Bang.) wherein it has been held that programmable logic controllers are classifiable under heading 85.37 of CETA, 1985 and not under Chapter 90. As regards the 37B orders relied upon by the assessee, the Ld. DR submits that the functions of data logging and monitoring, sequencing plant functions, control of plants, monitoring of process plants and control thereof and plant management are functions which clearly fall under the category of heading 85.37 and, therefore, even as per the Boards circular the product is classifiable under 85.37. As regards the reliance placed by the assessee on the decision of the Honble apex Court on the decision of N.I. Systems (India) Pvt Ltd. (supra), the Ld. DR submits that in the said case classification under heading No.85.37 of the CETA, 1985 was not under consideration. The Ld. DR further submits that as has been rightly observed by the adjudicating authority, the appellant/assessee has misled the department about the true description and functions of the product and had suppressed the information from the department with malafide intention to evade duty. Accordingly, the invocation of extended period of time by the adjudicating authority is correct in law and, therefore needs to be upheld.
6. We have carefully considered the rival submissions.
7. From the records it is seen that the assessee had submitted as early as in 1985 vide letter dated 11/11/85, the product catalogue of the product to be manufactured by them in collaboration with Yaskawa, Japan. The product description was given as follows:-
R-84-H Advanced Programmable Controller for -
(i) Factory automation
ii) Process control
iii) Flexible Manufacturing Systems
iv) Material Handling .
The literature further states that the R-84-H is provided with software, PID control facility, which can make it suitable for process control such as temperature, pressure and flow rate. Data acquisition and open-loop control can be implemented using Analog input and output modules.
7.1 Further in the annexure-I to the show-cause notice dated 29/09/1988 it has been stated as follows:-
M/s.Larsen & Toubro Ltd., are the manufacturers of large capacity programmable controller by name YASKAWA U 8 and R.84 H. The programmable controllers consist of input and output cards depending upon controlling points requirements of industrial plant and machinery. It has a controlling card with programmable memory and a programme display module and power supply etc. The unit is used in many industrial application for controlling various parameters such as temperature, pressure, level of fluid, flow and speed etc. of industrial or chemical process in various automatic industrial plants like cement, thermal power stations, steel plants and petro-chemical industries.
The programmable controller is a digital machine working with programmable memory which has a stored programme. The controlling functions are executed by checking each input point serially and comparing it with corresponding stored value and if there is a difference in the two values then to correct it by sending digital signals (zeros or ones) to output stage to operate a relay or a contact or a counter or a positioning module etc. In this way, the machinery connected with output stage such as heater, magnetic switch, solenoid valve etc. will operate accordingly and required value of various parameters will be achieved. The scanning of individual input point and its output stage is at very high speed and hence the parameters of all the point of the process will always be controlled to the desired value. Further, by this programmable controller sequencing of the various operation in the plant can be set.
7.2. From the description given in the product catalogue as also the show-cause notice issued by the department, it is clear that the product is basically a regulatory apparatus for process control by continuously monitoring the desired values with actual value and undertake operations maintaining the variable to be controlled such as pressure, temperature, level of fluid, etc. at pre-determined level. These are functions undertaken by the programmable process controller as per the 37B order issued by the CBEC vide order dated 09/05/97 which reads as follows:
2. Representations have been received from trade pointing out that programmable logic controller and programmable process controllers such as process control equipment/distributed control systems are two different types of controls classifiable under different headings of central excise tariff i.e. heading 85.37 and heading 90.32 respectively. The following specific differences have been pointed out between two types of controllers.
Programmable Logic Controller Programmable Process controller These are for controlling various types of machines These are for controlling various types of processes Operations depends on set of pre-determined operations Operations depend on factor to be controlled Operations based on desired sequence of operations Operation operates basically by continuously monitoring and maintain the variable to be controlled such as pressure, flow, temperature, level etc. with/at pre-determined level No regulatory function Regulatory function by continuously monitoring the desired value with actual value and bringing variable to be controlled to the desirable value Conventionally it is relay based panel for electric control with timer and switches Regulating apparatus for process control for continuous process governing Relay based panel has been upgraded to programmable controller commonly known as programmable logic controller by using micro processor for storing and doing sequence of operations Micro processors are used for doing complex storing and algorithms primarily for controlling. These are commonly known as controllers, e.g. digital distributed control system, distributed control system.
The matter has been re-examined by the Board in consultation with the Dept. of Electronics. Their opinion is reproduced below:-
(i) The programmable controllers covered under heading 85.37: They perform specific functions such as logic instruments timing etc. to control various types of machines in a plant.
(ii) The automatic regulating or controlling instruments and apparatus under heading No. 90.32: They may be considered as industrial process control systems satisfying criteria mentioned in No. 90.32. These are primarily used for controlling/maintaining the flow, level, pressure or variables of liquids or gases or for automatically controlling temperature of a process (may be refinery, steel, chemical industry) at the present level. They can perform functrions both sequence logic and different control strategies like Proportional-integral-differential (PID) control and other forms of control.
4. It is observed that opinion of the Dept. of Electronics is also in conformity with the Explanatory Notes of HSN.
5. Now therefore, in exercise of the powers conferred under section 37B of the Central Excise Act, 1944 and in supersession of the Boards order dated 6-8-96 referred to above, and for the purpose of ensuring uniformity in the classification of the goods in question, Board hereby orders that programmable logic controller as described in para 2 and other similar forms will be classifiable under heading No. 85.37 of the Central Excise Tariff and programmable process controllers as described in para 2 and other similar forms will be classifiable under heading No. 90.32 of the Central Excise Tariff. 7.3 A comparison of the functions attributed to the product in question in the product catalogue and also as mentioned in the show cause notice with the 37B order quoted supra, it can be easily seen that the product satisfies the criteria specified for Programmable Process Controller falling under heading No. 90.32 of the Central Excise Tariff and we hold accordingly.
7.4 In the NI Systems (India) Pvt. Ltd., case decided by the Honble apex Court cited supra where the Honble apex Court was dealing with the classification of PXI controllers and the in the said case the honble apex court held as follows:
39.?In our view, the above argument of the importer is unsustainable for the following reasons. Firstly, it is nobodys case that a PAC/Programmable Process Controller by itself is an automatic regulating, controlling instrument or apparatus in terms of Chapter 90. On the contrary, in view of Chapter Note 2(b) to Chapter 90 read with Note 3 of the same Chapter, PACs/Programmable Process Controllers are parts and accessories of a system/instrument which are suitable for use solely or mainly with a number of machines, instruments, apparatus of the same Heading, i.e., 9032 like sensors, thermostats etc. In our view, PACs/Programmable Process Controllers imported by the assessee herein are suitable for use principally with Industrial Process Control Equipment like sensors, thermostats etc. which measures temperature, process etc. Therefore, they are correctly classifiable as a part of the said machine, instrument or apparatus. Secondly, a control system generally refers to the control of a device, process or system by monitoring one or more of its characteristics. It ensures that output processing remains within the desired parameters over a period of time. Controllers are generally connected to other computing apparatus. The principle function of controllers is to execute control algorithm for real time monitoring and for controlling devices, processes or systems. In this connection, it may be noted that, a PAC/Programmable Process Controller (PPC) is not by itself an automatic regulating, controlling instrument or apparatus. A PAC/PPC when imported is suitable for use mainly with an industrial process control equipment like sensors, which measures temperature, pressure etc. As such, a PAC/PPC is a part of an industrial process control equipment/system and accordingly such controllers are classifiable as a part of instrument or apparatus [see Chapter Note 2(b) read with Note 3 of Chapter 90]. Thirdly, in this case, we are concerned with not only classification of PXI Controller and other controllers, we are also concerned with classification of Input-Output Modules and Chassis. The key aspect, therefore, concerns the nature and function of I.O. Modules and Chassis along with controllers. One has therefore to take into account all the imported items as constituting a complete System which performs the work of measurement. PXI is a system. It is composed of three basic components - chassis, system controller and peripheral modules. These modules are also imported by the importer in this case. One such module is Network Interface Module. This module is used to connect to a network for distributed control applications. It interconnects a PC to a measuring instrument by sending and receiving messages from the two units. It is important to note that in the chassis of the PXI there are slots in which Analog Output Boards (Cards); Digital Input-Output Boards, Image Acquisition Boards, Distributed Input-Output Boards, NIM etc. are inserted. Each I.O. Module imported by the assessee is tailored to a specific function and therefore such I.O. Module is a part of a regulating or controlling apparatus. Take the case of NIM. It is a hardware device. It may be in the form of a network interface card or a network adapter or in the form of Network Interface Controller (NIC). NIM is a computer hardware component designed to allow computers to communicate over a computer network. It provides connectivity between the industrial network and the I.O. Module. A network interface module works as a connector and adapter unit in order to provide a two way interconnection between external sensor unit and the ADP. Thus, I.O. Module is a hardware. It is also known as I.O. device or I.O. Point. It may be in the form of I.O. Cards or I.O. Boards. When I.O. Module is used to accept data (input) from sensors, transducers, Programmable Logic Controllers (PLC), computers etc. and then distributes the data (output) to other devices in the system, then I.O. Module is called as Distributed I.O. Module. Such system is also called as Distributed Control System (DCS), which is a control system used normally in a manufacturing plant or in any other kind of dynamic system. DCS, therefore, is used in a variety of industries to monitor and control distributed equipments. An I.O. Module is important from another angle also. It converts readings from sensors and provides output signals which are used for operating actuators (which make a device move or start working) via Network Interface Module. A Modular Distributed I.O. System which is also known as a Field Point provides for industrial monitoring and control applications. Thus, the Field Point System includes Analog and Digital I.O. Modules, terminal bases and network modules which connect I.O. Modules to industrial networks and software tools. Field Point Systems are ideal for use in industrial environment. Fourthly, Programmable Logic Controller (PLC) is a control device. It is normally used in industrial control applications. It is a Programmable Microprocessor based device which is used to control assembly lines and machinery on the shop floor as well as to control many other types of mechanical, electrical and electronic equipment in a plant. A PLC is designed for real-time use in rugged industrial environments, connected to sensors and actuators. PLCs are characterized by the number of I.O. Ports which they provide. PLCs are also categorized by their I.O. scan rates. As stated, PACs, which expands the role of PLCs and, at the same time, combines the capabilities of several traditional controls and monitoring systems, offers several benefits in the form of enhanced functionalities. Thus, a PAC does not replace the traditional PLCs but it expands the role of a PLC. A PAC has features found in Programmable Logic Controllers, Distributed Control Systems, Remote Terminal Units and PCs.
40.?The summary of what we have stated above is that PACs/Programmable Process Controllers and I.O. Modules by themselves are not measuring, regulating or controlling instrument (system). Physical variables such as temperature and voltage are measured by device, like sensors which constitute measuring and control systems. In other words, controllers and I.O. Modules each have a specific function to perform being parts of a measuring and control system i.e. sensors.
41.?We also do not find any merit in the submission of the importer that in view of the Explanatory Notes, the Measuring Device, the Control Device and the Operating Device has to form a single entity. There is no dispute that if all the above three devices are found in one single entity then classification will fall under Chapter 90. However, the test of single entity containing three devices is not a pre-condition for classification under CTH 9032. On the contrary, the test is not that of single entity, but of the device being capable of working as a functional unit. In this connection, Note 3 of Chapter 90 is to be read. Note 3 incorporates Note 4 to Section XVI. Note 4 inter alia provides for a machine consisting of individual components which may be separate as long as they are intended to contribute to a clear defined function. The PACs/Programmable Process Controller, though separate from sensors, is an individual component intended to contribute to a clearly defined function. Note 3 of Chapter 90 has to be read with Note 2(b) of Chapter 90 and if so read then it becomes clear that PAC/Programmable Process Controllers, being parts and accessories and a regulating or controlling apparatus like sensors have got to be classified under CTH 9032.89.10.
42.?For the above reasons, we hold that PACs (including embedded Controllers/Programmable Process Controllers) have been rightly classified by the Department under CTH 9032. 7.5 Similarly, in the case of CCE, Bangalore Vs. Asea Brown Boveri Ltd., - 2005 (182) ELT 401 (Tri-Bang) this Tribunal had held that the distributor control system which is meant for controlling various processes like pressure, temperature, etc. would merit classification under heading No.9032.80 as per the Boards Circular No.49/3/97-CD dated 09/05/97.
7.6 Therefore, considering the functions of the product manufactured by the assessee as revealed from the product literature and also as admitted by the department, and applying the ratio the judgments cited supra we are of the considered view that the product is a process control equipment merit classification under heading 90.32 and not a product handling under Chapter 85.37.
8. As regards the issue of invoking the extended period of time for confirmation of demand, we find that the same is clearly unsustainable in law. The appellant had submitted the product catalogue as early as 1985, which gave all the details of the product. Therefore to say that they have mis-declared the description of the product is totally irrelevant. If the department wanted to verify the matter, they could have done so based on the product catalogue furnished by the assessee and the other details submitted by the assessee on various functions and use of the product in the classification list and having failed to undertake such action, the department cannot lay the blame on the door step of the assessee and allege they have mis-declared. Therefore, we hold that the demand is clearly time barred. Regarding the imposition of penalty it is observed that the matter relates to classification of the product. in respect of classification it is quite possible to hold different views. Such action cannot be taken as suppression or willful mis-statement of facts and does not warrant imposition of any penalty as has been held in the various judicial pronouncements relied upon by the assessee.
9. In sum, we hold that the programmable controller Yaskawa U-84 and R-84 H manufactured by the assessee is classifiable under heading No 90.32 of the First schedule to the Central Excise Tariff Act, 1985. Accordingly, we set aside the order dated 29/05/2003 passed by the Commissioner of Central Excise classifying the product under heading No.85.37.
(Pronounced in Court on .) (M.V. Ravindran) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) pj 1 2