2008 (5) TMI 522 - AT - Central Excise

Order of Commissioner (Appeals) - Classification of Brown Sugar - scope of SCN - Held that - The Commissioner (Appeals) went beyond the scope of show cause notice, when he decided the classification of brown sugar under Chapter sub-heading 1701.39 as this was not the subject matter in the show cause notice. Therefore, the order passed by the Commissioner (Appeals) is not legal and proper - appeal allowed - decided in favor of Revenue.

Summary

Issues: Revenue appeal against Order-in-Appeal No. RK/112/A/2003 - Classification of brown sugar under Central Excise Tariff Act - Duty payment discrepancy - Penalty imposition - Interest demand - Legal validity of Commissioner (Appeals) decision.

The judgment pertains to an appeal filed by the Revenue against the Order-in-Appeal No. RK/112/A/2003, concerning the classification of brown sugar under the Central Excise Tariff Act and the associated duty payment discrepancy. The Respondents, sugar manufacturers, had classified the brown sugar under sub-heading no. 1701.90, attracting a basic excise duty of 16% adv. The Assistant Commissioner had accepted this classification. However, the Revenue contended that the brown sugar should be classified under Heading 1701.39, attracting a duty of Rs. 85 per quintal. The Commissioner (Appeals) allowed the appeal filed by the assessee, holding that the duty had been correctly paid, and no penalty or interest was warranted. The Revenue challenged this decision.

Upon review, the Tribunal observed that the Respondents had filed a classification list classifying the brown sugar under sub-heading no. 1701.90, which was accepted by the Assistant Commissioner, making the classification final. The Commissioner (Appeals) exceeded the scope of the show cause notice by deciding the classification under sub-heading 1701.39, which was not part of the original matter. Consequently, the Tribunal deemed the Commissioner's decision as not legally valid and set it aside. The appeal by the Revenue was allowed, and the Order-in-Original passed by the Assistant Commissioner, confirming the duty demand, was reinstated.

In conclusion, the Tribunal's decision focused on the correctness of the initial classification of the brown sugar under the Central Excise Tariff Act, highlighting the finality of the classification made by the Assistant Commissioner. The judgment emphasized the importance of adherence to the scope of show cause notices in appellate proceedings, ultimately leading to the restoration of the duty demand as per the original classification.