Customs, Excise and Gold Tribunal - Mumbai
Cello Household Appliances Ltd., P.J. ... vs Commissioner Of Customs And Central ... on 21 November, 2001
JUDGMENT Gowri Shankar, Member (T)
1. The application is for waiver of deposit of duty of Rs. 28.65 lakhs, and penalty of equal amount of Cello Household Appliances Ltd., the assessee, and penalties under Rule 209A of Rs. 5 lakhs on P.J. Sharma, its director, and of Rs. 1 lakh on Anil Das, its authorised signatory.
2. The duty has been demanded, and penalty imposed, on the finding of the Commissioner that the goods described as "Singapore shelf", "Hong Kong shelf", "Tokyo shelf" and "Japan Shelf" are articles of furniture classifiable in heading 9403.00 and not, as claimed by the applicant, as articles of plastics under heading 3924.90.
3. We have heard representative of the applicant and also seen a sample of the Singapore shelf in question. The representative states that the other shelves are similar in design and functioning, the only difference being the dimension of the article and the number of shelves. He states that these articles are meant to be placed on the tops of tables, kitchen counter etc. to be used for keeping various small articles. They are therefore excluded from classification as furniture in heading 9803 by virtue of note 2 to Chapter 9 which provides that the goods are classifiable in heading 9403 only if designed for placing on the floor or ground. He further contends that the extended period of limitation invoked in the notice will note apply. The applicant disclosed to the department in its declaration for claiming exemption under notification 15/94 the fact of manufacture of these goods. Additionally, the goods have been examined when they were to be exported by the central excise officer who was required to seize the container in which they have been packed.
4. The departmental representative contends that it is perfectly possible for these articles to be kept on the floor and, having regard to the conditions of life in India, a number of persons who may not have more than a basic furniture in their homes, use these articles by keeping them on the floor. He points out that the declarations filed by the assessee gave no details whatsoever of the nature and function of the goods. He contends that the officer who was concerned with sealing the container of the export goods would have no case to go into the classification, since he was not concerned with that and was only concerned with their packing in the containers.
5. On the fact of it we do not find a strong prima facie case for the applicant on merits or on limitation. We do not see at this stage how these articles could not be used or kept on the floor, particularly in rural areas or in the case of indigent persons who may not have much furniture. As to limitation, the points that the departmental representative has taken appear to us prima facie to be sound.
6. However we note the contention of the representative of the applicant that, if duty were payable on these gods; modvat credit of the duty paid on the plastic raw materials and others used in the manufacture would be available towards payment of such duty and that, in determining the duty it is the ex duty price that is to be considered. After making deductions of the duty on this account, the duty payable would come to Rs. 11.72 lakhs. Taking this into account, we consider that a deposit of Rs. 7 lakhs would be appropriate.
7. The matter is one of classification and it is possible that the applicant could reasonably have come to the conclusion that the gods were not furniture. We note the total absence of any enquiry by the department into the declarations that the applicant had filed. We therefore waive deposit of the penalty imposed on the assessee and on its employees and stay its recovery, and the fine for confiscation of the assessee's land and machinery.
8. The amount to be deposited within a month from the date of receipt of this order and compliance to be reported on 3rd January, 2002.