Judgment:
1. In the order impugned in this appeal, the Collector has held the product "Ecoklin' manufactured by the applicant to be classifiable as a cleaning preparation under Heading 3402.90 of the Tariff, confirmed the demand for difference between the duty payable under that heading and that paid by the appellant following its classification under Heading 2851.00 and also imposed a penalty on the applicant.
2. Appellant is absent and unrepresented despite notice. The appeal does not question the classification determined by the Collector but contends that the demand for duty was barred by limitation. The notice to show cause was issued for a period beyond six months and therefore invoked the extended period in the proviso to Section 11A(1) of the Act. It is the appellant's contention that it had correctly described the goods in the classification list as a degreasing compound and had done so ever since the product was manufactured, and that, being aware of this description, the department had approved the classification rate under Heading 28.51. Nothing has therefore been suppressed from the department and the extended period is not available.
3. The departmental representative answers by saying that the appellant did not indicate that the product was a cleaning preparation and the department therefore was not in a position that the product is classifiable elsewhere and was claimed by the appellant.
4. Heading 3402.90 of the Tariff inter alia includes cleaning preparations whether or not contains soap. The HSN Explanatory Notes to this heading, which is identically worded in the Explanatory Notes and in the tariff, refers to cleaning or degreasing preparation not having a basis of soap or other organic surface active agent being included in the heading. The note in fact used the terms degreasing and cleaning synonymously. Therefore, when the appellant informed the department that the goods were a degreasing preparation, it could reasonably assume the department could understand that the product was a cleaning preparation also. We are in fact unable to see distinction between the two. A degreasing preparation clears the object on which it is applied of green. In that situation, the only lapse attributed to the appellant is a mistake in classifying the goods under Heading 2851.00. The heading, which inter alia includes other organic compounds, compressed air and amalgams of metals (we have reproduced only relevant extracts) would clearly not apply to these goods. However, classification is not entirely the responsibility of department. Having known that the goods were degreasing compound, it would have or ought to have known that Heading 2851.00 would not apply. When the department itself had approved the classification list as claimed as also the assessment in RT12 return, the appellant could reasonably believe that the classification claimed was correct. Thus, not only has the appellant not suppressed any information which it was the duty to disclose, it would also have no intention to evade duty. The appropriate course for the department would have been to have the product tested or obtain further information in the heading keeping the assessment provisional.
Therefore in our view there is no basis to invoke the extended period and the demand for the period from August, 1991 to December, 1991 by the notice issued in August, 1994 is barred by limitation.