2000 (3) TMI 882 - AT - Central Excise

Summary

Issues:
1. Classification of yarn spun out of glass fibre under Notification No. 52/86
2. Re-opening of approved classification list by the Revenue after a prolonged litigation
3. Time-barring of demands raised by the department
4. Applicability of exclusion clause in the Notification to the benefit of the assessee
5. Justification of demands raised by the Assistant Commissioner

Classification of Yarn Spun out of Glass Fibre under Notification No. 52/86:
The case involved a dispute over the classification of yarn spun out of glass fibre under Notification No. 52/86. The Assistant Commissioner had initially rejected the classification list filed by the appellants, but after multiple appeals and remands, finally accepted the classification list on 17-5-85. Subsequently, the Government amended the Notification, excluding continuous filament yarn from the exemption. The Revenue sought to re-open the approved classification list, leading to a legal battle over the classification and benefit under the amended Notification.

Re-opening of Approved Classification List by the Revenue:
After a prolonged litigation and the final approval of the classification list in 1985, the Revenue initiated proceedings to re-open the approved classification list in 1991. The Assistant Commissioner modified the classification list, leading to demands being raised for the period 1-3-86 to 13-11-90. The appellants argued that there was no change in the manufacturing process, suppression of facts, or review by the department, thus contending that the demands should be prospective only. The Commissioner (Appeals) set aside the order confirming the demands, which the Revenue appealed against.

Time-Barring of Demands Raised by the Department:
The appellants contended that the demands raised by the department were time-barred, as the manufacturing process remained unchanged, and there was no suppression of facts. The Assistant Commissioner confirmed the demands without delving into the legal aspects, prompting the appeal to the Commissioner (Appeals) who ruled in favor of the appellants. The Revenue challenged this decision, arguing that the demands were not time-barred and that the exclusion clause in the Notification did not affect the benefit to the assessee.

Applicability of Exclusion Clause in the Notification to the Benefit of the Assessee:
The case also revolved around the applicability of the exclusion clause in the Notification to the benefit of the assessee. The Revenue attempted to deny the benefit of the Notification by modifying the classification list, which the appellants contested based on the lack of changes in the manufacturing process and the long-standing approval of the classification list. The Commissioner (Appeals) sided with the appellants, leading to the Revenue's dissatisfaction and subsequent appeal.

Justification of Demands Raised by the Assistant Commissioner:
The Assistant Commissioner's issuance of show-cause notices to revise the classification list and deny the benefit of the Notification was challenged by the appellants. They argued that the demands were not justified due to the absence of any changes in the manufacturing process and the lack of review by the department. The Tribunal found in favor of the appellants, dismissing the Revenue's appeal and granting consequential relief to the assessee respondents, emphasizing the importance of approved classification lists in determining the prospective applicability of demands.