1999 (11) TMI 732 - AT - Central Excise

Summary

Issues:
Classification of products under specific chapter sub-heading and setting aside of demands raised.

Classification Issue Analysis:
The case involved the classification of HDPE tapes, fabrics, and sacks under chapter sub-heading 3926.90 or 5406.90. The Asstt. Collector initially classified the products under 5406.90, which was upheld by the Collector (A). However, the High Court directed the matter to CEGAT, which classified the goods under sub-heading 3920.32. The Revenue argued against this classification, citing directions from the High Court. On analysis, it was found that the M.P. High Court's decision in Rajpack Well and subsequent Tribunal cases supported the classification under 3920.32, thus settling the issue.

Demand Setting Aside Issue Analysis:
Regarding the demands raised, the Revenue contended that the Asstt. Collector's order was based on the High Court's directives and should not have been overturned by the Collector (A). The Respondent relied on the judgment of the Delhi High Court in Bharat Commerce Industries, which held that if goods were illegally assessed under one tariff item, refunds could not be denied unless a proper demand was issued within the stipulated time. The Tribunal found this view valid and upheld it, concluding that the demands should be set aside. Consequently, the order of the Collector (A) was deemed legally sound, and all 6 appeals were rejected based on the settled classification and demand setting aside issues.