2025-VIL-726-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Classification of goods, Extended period of limitation – Appellant is engaged in manufacturing and selling various products like soap solution, potassium base brown soap, anti-adhesive, sodium hypochlorite, detergent powder etc. – Duty demand alleging that the appellant had wrongly classified the goods under Chapter 15 of the Central Excise Tariff Act, 1985 instead of Chapter 34 - Whether the goods manufactured by the appellant are correctly classifiable under Chapter 15 or Chapter 34 of the Central Excise Tariff Act, 1985 – HELD - The goods manufactured by the appellant are appropriately classifiable under Chapter Heading 3403 of the Central Excise Tariff Act, 1985 which deals with 'Lubricating Preparations', as the products are used as lubricating solutions for movement of LPG cylinders. As per the interpretative rules, when a product is classifiable under more than one Chapter Heading, the more specific heading should be preferred over the general heading. Since Chapter Heading 3403 specifically covers lubricating preparations, the Tribunal held that the goods are correctly classifiable under this heading and not under Chapter 15 - The demand is restricted to the normal period of limitation, and the penalties imposed on both the appellants are set aside – The appeals are partly allowed - Whether the demand for extended period of limitation is sustainable – HELD - the Department was aware that the appellant had been classifying the goods under Chapter 15 and availing the benefit of relevant notifications, and hence the allegation of suppression of facts to invoke the extended period is not established. Accordingly, the demand is restricted to normal period of limitation - Whether the penalties imposed on the appellant company and its proprietor are sustainable – HELD - Since there is no suppression of facts with intention to evade duty, the penalty imposed on the appellant company is not sustainable and is set aside - the identity of a proprietor and its proprietorship concern are one and the same, and hence separate demands and penalties cannot be raised against both. Accordingly, the penalty imposed on the proprietor is also set aside.
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