2005 (10) TMI 310 - AT - Central Excise

Summary

Issues:
1. Assessment of duty on small pouches of shampoo under Section 4 or 4A of the Central Excise Act.
2. Validity of reopening assessment based on a previous High Court decision.
3. Commissioner's comments on the High Court decision and judicial discipline.

Analysis:

Issue 1: Assessment of duty on small pouches of shampoo
The case involved a demand of duty against the appellants for small pouches of shampoo cleared between April 1999 to March 2004. The dispute was whether sachets of 3 to 9 ml are liable to duty under Section 4 or 4A of the Central Excise Act. The High Court, based on a Board's Circular, directed the revenue to assess the items under Section 4. The Assistant Commissioner also confirmed this assessment, dropping a previous demand of about Rs. 3 crores. However, a show cause notice was issued later for the period April 1999 to October 2002, leading to the current appeal.

Issue 2: Validity of reopening assessment
The appellants argued that since the High Court and Assistant Commissioner had already decided the issue in their favor, there was no justification for reopening the assessment. The Commissioner's observations on the High Court's decision were deemed inappropriate and a breach of judicial discipline. The Tribunal held that the Commissioner should have followed the High Court's decision as a judicial precedent without questioning its correctness, especially when the dispute was settled between the parties.

Issue 3: Commissioner's comments and judicial discipline
The Tribunal found the Commissioner's comments on the High Court's decision to be unwarranted and potentially contemptuous. The Commissioner was reminded of the need to respect judicial decisions and not challenge them, particularly when the matter had been resolved between the parties. The Tribunal granted the appellant's stay petition based on the clear precedent set by the Bombay High Court in the appellant's own case, indicating a prima facie case in their favor. Additionally, the Tribunal directed the Chief Commissioner to take appropriate action regarding the conduct of the officer who made the contentious comments about the High Court decision.

In conclusion, the Tribunal upheld the appellant's case based on the previous High Court decision and criticized the Commissioner's comments for lacking judicial discipline.