Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise And ... vs &3) M/S. Hi Flow Pump Co on 3 April, 2012
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
EAST ZONAL BENCH: KOLKATA
1)EXCISE APPEAL NO.E/A/478/06
2)CROSS OBJECTION NO.81/06
3)EXCISE APPEAL NO.E/A/422/06
4)EXCISE APPEAL NO.E/A/213/07
(ARISING OUT OF ORDER-IN-APPEAL NO.21/CE(A)/GHY/06 DATED 27.02.2006 PASSED BY COMMISSIONER(APPEALS):CENTRAL EXCISE, GUWAHATI
FOR APPROVAL AND SIGNATURE OF
SHRI S.K.GAULE, HONBLE TECHNICAL MEMBER
DR. D.M.MISRA, HONBLE JUDICIAL MEMBER
1. Whether Press Reporters may be allowed to see :
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 :
of the Order?
4. Whether Order is to be circulated to the Departmental :
Authorities ?
COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, DIBRUGARH
APPLICANT(S)/APPELLANT (S)
VERSUS
1&3) M/S. HI FLOW PUMP CO.
AND
2) M/S. C.M.HO & CO.
RESPONDENT (S)
APPEARANCE:
SHRI S.CHAKRABORTY, A.R. (ASSTT. COMMR.) FOR THE REVENUE;
SHRI AMALENDU CHAKRABORTY, CONSULTANT FOR THE RESPONDENT(S).
CORAM:
SHRI S.K.GAULE, HONBLE TECHNICAL MEMBER DR. D.M.MISRA, HONBLE JUDICIAL MEMBER Date of Hearing/Decision:03.04.2012 ORDER NO Per Shri S.K.Gaule Heard both sides.
2. Revenue filed these Appeals against the Order-in-Appeal 21/CE(A)/GHY/06 dated 27.02.2006, whereby the learned Commissioner (Appeals) upheld the lower Adjudicating Authoritys Order dropping the proceedings of the impugned show cause notices.
3. Briefly stated facts of the case are that the Respondents are engaged in the manufacture of excisable goods viz.Tea Sorting Machine, Tea Extractor Machine and parts thereof. They had classified the same under Heading No.84.33 of the Central Excise Tariff Act, 1985 attracting nil rate of duty. They also claimed the benefit under different SSI exemption notifications. The Officers of DGCEI working on intelligence made a case against the Respondents on the ground that the goods in question were classified as excisable goods. However, they wrongly availed the benefit of SSI exemption notifications. Accordingly, show cause notices were issued for recovery of duty by classifying the products under Heading 84.38 not under 84.33. There was also a proposal for imposition of penalties on the Respondents. However, the lower Adjudicating Authority dropped the proceedings against the Respondents. The Revenue challenged the same before the Commissioner (Appeals), who in turn upheld the Lower Adjudicating Authoritys Order. Aggrieved by this Order, the Revenue is in appeal before us.
4. Learned AR for the Revenue contended that Chapter Heading 84.33 does not cover Tea Sorting Machine and Tea Extractor Machine. The contention of the Revenue is that the goods are rightly classifiable under 8438. The contention is that there was an element of suppression of facts and misdeclaration/misclassification and the learned Commissioner (Appeals) failed to appreciate the same. The learned AR also reiterated what is stated in the Grounds of Appeals.
5. Learned Consultant appearing for the Respondents contended that they were clearing the goods at nil rate of duty as per their classification of the goods in question under Chapter Heading 84.33, vide their Classification List effective from 01.04.94. The Classification List was approved by the competent authority of Central Excise. The contention is that since they had been classifying the products under Chapter Heading 84.33 w.e.f.01.04.94, they were paying the duty accordingly. The contention is that as per Chapter Heading 84.33, they had been paying the duty under the same Chapter Heading by availing the benefit of Notification and the Department did not raise any objection, so far as the approved Classification List effective from 01.04.94 was concerned. The contention of the learned Consultant is that their produce is an agricultural produce. The contention is that the agricultural produce is not defined under the Central Excise provisions. However, vide the Notification No.08/2004-ST dated 09.07.04, agricultural produce had been defined which included tea. Therefore, tea is an agricultural produce and the goods manufactured by them had rightly been classified under 84.33.
6. We have considered the submissions and perused the records. Learned Commissioner (Appeals) found in his Order as under:-
4. I have carefully gone through the case records and appellants as well as respondents submissions in course of personal hearing. The only issue to be decided in this case is whether the adjudicating authority was legally correct in dropping the demands. According to the Review Order the adjudicating authority should have appreciated the fact that evidence available before him was not available before the Assistant Commissioner at the time of approval of the classification list and so extended period for demand is invokable. The Additional Commissioner in his order has given a categorical finding that classification lists were filed before 1994 and also post 1994. The Review Order also accepts these findings. Only objection in the Review Order was that the documents available before the Additional Commissioner were not available before the Assistant Commissioner at the time of approval. But no such document has been specified by the Commissioner. I have perused the copy of the Show Cause Notice filed with the Review Application but l do not find any such evidence in the Show Cause Notice, which was not available to the Assistant Commissioner, to determine the classification otherwise. The Show Cause Notice also did not allege that material facts were suppressed by the respondents, it only alleged that they misdeclared/misclassified the products under a different heading in order to enjoy exemption benefit. The case records reflect that the department was made aware of classification and it was open to the department to change the classification if the product was held to be classifiable under a different heading/sub-heading. The Honble Tribunal as well as the Apex Court have consistently held the view that when classification lists are filed and approved allegation of suppression or willful mis-statement in order to invoke extended period for demand is not sustainable. This view is confirmed by the following case laws:
(i) Bharat Carbon and Ribbon Mfg. Co. Ltd [2005(186)ELT 0491(T)]
(ii) Acons Construction Products Ltd. [2005 (184) ELT 120(SC)
(iii) Graver & Weil (l) Ltd. [2004 (174) ELT 0487 (T)]
(iv) Sapana Polyweave Pvt. Ltd. [2003(151) EIT A83(SC)]
5. The review order also held that there is no estoppel in the matter of taxation. I agree with the Commissioner that there is no estoppel in taxation matters. Taxing authority can change its view which it had taken for earlier period in respect of subsequent period. But this change should be prospective and not retrospective. I therefore hold that the adjudicating authority can not alter the classification accepted by the Assistant Commissioner who is the proper officer under Central Excise Law to finalise classification unless the Assistant Commissioners such acceptance order is challenged before higher legal forum and is reversed by higher forum.
6. The Review Order also holds that adjudicating authority should also have taken strength from the provisions of retrospective amendment made in Section 11A vide Section 110 of the Finance Act, 2002. I find that for demanding duty under Section 11A. invoking extended period for demand, the charges of suppression, mis-statement etc. has to be established. This amendment gives authority to demand for previous period of one year/five years even if classification list was approved as under Section 11A prior to its amendment demand could be only prospective if classification was approval by the Department in view of law laid down in Cotspun Ltd. case [1999 (113) ELT 353 (SC)].
7. We find that the learned Commissioner (Appeals) has given cogent findings. The Department could not produce anything contrary. Thus, we do not find any reason to interfere with concurrent findings of both the lower Authorities. Therefore, the Order passed by the Commissioner (Appeals) is upheld and Revenues Appeals which are bereft of merit, are dismissed. Cross Objection filed by the Respondents also stands disposed off.
Dictated and pronounced in the open court.
Sd/- Sd/-
(D.M.MISRA) (S.K.GAULE)
JUDICIAL MEMBER TECHNICAL MEMBER
DUTTA/
4 EX.APPs.478 & 422/06 AND 213/07