2005 (3) TMI 579 - AT - Central Excise

Summary

Issues: Classification of goods under different headings, retrospective effect of re-classification, demand of duty for past period, applicability of Supreme Court judgments, representation of respondents before the Tribunal.

In this case, the respondents were involved in the manufacture of "Busduct with flexibles" classified under Heading Nos. 85.37/85.38 of the CETA Schedule, approved by the Assistant Collector. Subsequently, the CBEC re-classified the goods under Heading No. 85.44, leading to a show cause notice for duty demand on the goods cleared during January to June 1992. The appeal contended that the re-classification should not have retrospective effect, citing the Supreme Court's judgment in Rainbow Industries case. The appellate authority agreed with the appeal, setting aside the duty demand for the past period, prompting the Revenue to appeal.

The Revenue argued that the decision in Rainbow Industries was overruled by the Supreme Court in Ballarpur Industries Ltd. case, stating that duty short-levied based on an approved classification list was recoverable even for a period before the show cause notice, subject to the time limit under Section 11A of the Act. The Revenue also relied on the ITW Signode India Ltd. case. Despite notice, the respondents did not appear before the Tribunal or request an adjournment.

The Tribunal found the issue to be squarely covered in favor of the Revenue by the ITW Signode India case, allowing the demand of duty for a period prior to the show cause notice based on the re-classification of goods under Heading No. 85.44. The Tribunal held that the demand was lawful and in accordance with the Supreme Court's decision, setting aside the previous order and allowing the appeal of the Revenue. The operative part of the order was pronounced on 28-3-2005.