Order Date – 09 January 2023

Parties: M/S. EPC International Pvt. Ltd Vs Union of India & Anr.

Facts – 

• The Petitioner, M/s. EPC International Pvt. Ltd., was issued with a show cause notice dated 11th March, 2016 alleging that they have clandestinely manufactured and cleared “Special Boiling Point Spirit” classifiable under Central Excise Tariff Sub-heading 2710.1213 commercially known as ‘EPC solvent’ during the period from 2011-12 to 2015-16 (up to October, 2015) without payment of Central Excise Duty.

Issue – 

• Whether the extended period of limitation can be invoked in the case of classification of a product?

Order – 

• The Hon’ble High Court held that the tariff sub-heading under which the product was classified was accepted by the department for more than six years and the products were cleared at NIL rate of duty. Also on several occasions the officers of the department inspected the factory premises of the appellant. Thus the allegations of mis statement, willful suppression are absolutely vague. Therefore, by any stretch of imagination the question of invoking extended period of limitation does not arise.
• circular dated 11.04.2016 provides whether the process undertaken by the assessee amounts to manufacture or not is an interpretational issue and therefore when a demand is raised it should be raised for the normal period of limitation only.
• The Court finds that in the adjudicating order there is only a discussion about certain decisions which was referred to by the adjudicating authority and nothing turns out on the facts of the case on hand. The issue in the case on hand relates to classification of a product which requires to be done in a scientific manner and such classification cannot be determined and concluded based on statements given by either the Director of the company or their employees.
• Hence the appeal is allowed.