Full Judgment
plastic CD tower and plastic audio cassette stand, falls under chapter heading 94.03 of the Central Excise Tariff Act. The applicant classified the above goods under Chapter 39 which covers plastics and articles thereof. According to the department, the goods are rightly classifiable under Chapter 94 which includes furniture, bedding, mattresses etc. The department's contention is that the assessee's goods are classifiable as furniture. The applicant claims that articles of plastic falling under Chapter 39 are exempt from payment of duty. In the impugned order, the Commissioner (Appeals) upheld the lower authority's decision to invoke extended period of limitation as the applicant misdeclared the product in dispute as other household articles instead of describing them as furniture and also that the applicant has not declared the fact that they were using the brand name of another person who was manufacturing similar goods. While upholding the suppression and misdeclaration on the part of the applicant, the Commissioner (Appeals) has set aside the penalties imposed on the partners of the applicant firm.
3. The basic issue is whether the applicant is guilty of suppression of facts from the department for the latter to invoke the extended period of limitation. It is admitted by the department that the applicant has been filing declarations from lime to time claiming exemption from the whole of Central Excise duty under notification 4/97 dated 1.3.1997 in respect of the product manufactured including the products in dispute, i.e. plastic CD tower and plastic audio cassette stand. During the relevant period, the goods were fully exempted from payment of excise duty, if the classification is held to be falling under Chapter 39. We observe that the department's attempt to classify them as furniture and thereby bringing under purview of Chapter 94 is prima facie not correct. As per HSN note as well as section note of Chapter 94, it is clear that furniture which can be placed on the floor is classifiable under that chapter whereas the products of the applicant are such that they are not placed on the floor and basically used as a stand kept on a table or any other piece of furniture. The product is used for only storing CDs and cassettes, as the photograph of the product clearly shows. The department is attempting to invoke the larger period of limitation by stating that the applicant has suppressed the fact that they were manufacturing furniture. In fact in their declaration, the applicant has clearly said that they were manufacturing a certain product which falls under Chapter 39. The applicant's plea that the larger period is not invocable in their case and that their goods fall under Chapter 39 of CETA prima facie has considerable strength. We therefore waive pre-deposit of the duty demanded and penalty imposed and stay recovery of the amounts pending the appeal.