Specific tariff entries for gears/shafts under 8483 prevail over agricultural parts entries despite exclusive use; extended limitation not invocable absent deliberate suppression in interpretational disputes with filed returns and audits.

P. ANJANI KUMAR:

The appellants, M/s GNA Gears Ltd, Phagwara (Formerly-M/s GNA Dura parts Ltd) filed this appeal, No. /61080/2019-EX, against the impugned order dated 19.10.2016 passed by Commissioner of Central Excise and Service Tax, Jalandhar.

2. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of excisable goods namely Rear Axles Shafts, Transmission shafts, Gear box & Gears falling and parts of agriculture implements falling under CETA 87089900, 84834000’ the appellants were clearing the same under Tariff Heading No. 84329090/84339000 without payment of Central Excise duty. Acting on the information that the Noticee were manufacturing transmission shafts falling under Tariff heading 84831099, gears/gearing/gear boxes/gear housings/ Bevel Set/ Spur Gears/ Side Gears etc falling under Tariff Heading No. 84834000 and clearing them misclassifying the same under Tariff Heading No. 84329090/84339000, under the garb of parts of agricultural implements and clearing the same, without payment of duty as exempted goods, the unit was visited by the Preventive staff of Central Excise Division, Phagwara on 11.09.2015. During the visit, it was observed that the appellants were clearing the goods manufactured as parts of agricultural implements, without payment of duty, classifying in the periodical ER-1 Returns under Tariff heading 84329090/84339000; there was no difference between the parts being cleared by them on payment of duty and those being cleared without payment of duty. On completion of investigation, a show cause notice dated30.09.2015, was issued to the appellants seeking to recover central excise duty of Rs.13,86,31,711, for the period 01.09.2010 to 31.08.2015, along with interest and penalties. The proposals in the Notice were confirmed by the impugned order. Hence, this appeal.

3. Learned counsel for the appellants submits that the appellants manufactured goods. i.e. single/ multi speed gear box of different sizes, transmission shafts, Bevel/ Spur/Side/Housing gears etc; the goods were customized/Tailor made specially manufactured and meant for use as parts of Rotavator/ Rotary Tiller (Agriculture machinery).; the customers issued purchase orders with specific Drawings/ Design as per their requirement for use in the Rotavators (Agriculture machinery); the same are fitted as part and the machine is complete only after fitment of the said items; these are basically parts of the agriculture machinery and are not parts for general purpose.; they are solely and principally meant/ used as part of agriculture machinery; they are neither saleable in the market as such nor usable for any purpose other than for use as part of Rotavator as they are manufactured as per the drawings/ specifications of the customers; the specific and exclusive use of items in agriculture machinery is evident and confirmed by the Certificates issued by the customers.

4. Learned counsel submits further that all the Agricultural, Horticultural machinery is classifiable under chapter Heading 8432; chapter Heading 8432 specifically provides the parts of Agricultural, Horticultural or forestry machinery to be classifiable under sub Heading 8432 90; therefore, the items in question are appropriately classifiable under Heading 8432 9090. He submits that despite specific entry of Parts under Sub Heading 8432 90, the department initiated the proceedings & confirmed the demand in addition to interest and penalty by classifying the subject goods under Heading 8483 (Transmi