Bharat Petroleum Corporation Limited Vs Commissioner of Central Excise (CESTAT Mumbai)
The classification cannot be changed merely because 8 digit classification has been introduced, CESTAT sets aside demand of differential duty along with penalties
We share the recent final order passed by the Hon’ble CESTAT, Mumbai. The appellant is a public sector undertaking. It was selling polypelene/propane feed stock (PPFS). It filed classification lists prior to 2000 and the same were approved. However, post introduction of 8 digit tariff, again, classification dispute was raised. A demand of over Rs. 60 crores was confirmed under section 11A of the Central Excise Act. It was challenged before the Hon’ble Tribunal. The issue was whether the goods sold by the appellant would merit classification under heading 2902 9090 as claimed by the assessee or under chapter heading 2711 1400 as claimed by the department.
The Hon’ble CESTAT, Mumbai has set aside the demand and allowed the appeal. It held: (i) explaining the features of the product and relying on Interpretation Rules, holds that the goods would not be covered under chapter heading 2711; (ii) criticises the test report relied upon by the commissioner; (iii) explains the product “petroleum” in detail; (iv) holds extended period of limitation cannot be invoked as there is no suppression; (v) the classification cannot be changed merely because 8 digit classification has been introduced; sets aside demand of differential duty along with penalties; (vi) remits the matter back to the Commissioner to decide the correct classification.
