Per Lajja Ram: M/s T.V.S. Electronics Ltd., Tumkur (hereinafter referred to as 'TVS'), have filed the present appeal being aggrieved with Order dt. 21.9.1992 of the Collector of Central Excise, Bangalore.

2. The matter relates to the classification of the products Modem, Cartridge Tape Drive (CTD) and passive Hubs, used with the Data Processing Machines. Data Modem and Fax Modem were classified by the TVS under Heading No. 84.71 of the Schedule to the Central Excise Tariff Act 1985 (hereinafter referred to as the "Tariff") and were classified by the Revenue under Heading No. 85.71 of the Tariff. CTD were classified by TVS under Heading No.84.71 of the Tariff and were classified by the Revenue under Heading No. 84.73 of the Tariff. Passive Hubs were classified by TVS under Heading No.84.71 and were classified by the Revenue under Heading No.84.73 of the Tariff. In the show cause notice dt. 26.3.92 issued by the Collector of Central Excise, Bangalore the extended period of limitation was invoked. The Collector of Central Excise, Bangalore in his order dated 21.9.92 ordered classification of Modems under Heading No.85.17 and CTD under Heading No. 84.73 and confirmed the demand of differential duty relating there to The demand with regard to Passive Hubs was however, vacated as time barred. The Id. Collector, Central Excise observed that it was open to the Asst. Collector to determine the correct classification of the Passive Hubs in accordance with law. A penalty of Rs.3

3. The matter was posted for hearing on 17.10.95 when Shri Krishna Srinivasan, Advocate with Shri P.K. Ram, Advocate appeared for the appellants. Shri K.K. Jha, SDR represented the respondents.

4. Shri K. Srinivasan, Id. Advocate stated that the show cause notice is dt. 26.3.92 while the duty had been demanded for the period 1.9.88 to 28.2.90. He referred to the earlier show cause notices on the same issue and submitted that the entire material had been furnished by them to the Deptt. and that there was no ground for alleging suppression against them. On merits, the Id. Advocate stated that no independent inquiry had been made by the adjudicating authority and that the reliance on Expert's opinion was not correct. The testimony of Shri Hemans Kumar was not reliable. The end use was not relevant for classification. There was no mensrea and therefore, penalty was not imposed.

5. In reply Shri K.K. Jha, Id. SDR submitted that as per HSN Explanatory Notes. Fax Modem and Data Modem were excluded from the Heading No.84.71. (LTD were also excluded as perChapterNote-5 of Chapter-84 from HeadingNo.84.7 I. They performed specific functions and is in the nature of parallel back-up facility. On limitation, the Id SDR referred to the show cause notice and the Order-in-Original and submitted that the appellants had misrepresented. In support of his arguments, the Id. S D R relied upon the Hon'ble Supreme Court's decision in the case of CCE Vs. Fuse Base Eltoto Ltd. - 1993 (67) ELT 30 (SC).

6. We have carefully considered the matter and have given our due thought and consideration to the submissions made by both the sides.

7. First, we would take-up the matter of classification of the three products under consideration.

MODEM

8. In their supplementary classification list No.4/89, TVS had declared Data Modem and Fax Modem as units of Automatic Data Processing Machines and units. There of, classifiable under Heading No.84.71 of the Tariff. A Modem is a device that allows computer users to communicate with one another over telephonic lines. It takes the digital information from the computer and modulate it into audio signals that can be sent over telephone lines. Using the modem we can send information to another computer by calling its modem on the phone. The matching compatible modems communicate through the communication software which controls the connection between the two identified computers. Communications software calls the other computer; that computers modem answers the ph