1984 (6) TMI 251 - AT - Central Excise

Summary

Issues:
1. Validity of the order of the Collector of Central Excise regarding the payment of duty on PVC plastic coated paper.
2. Legality of the transfer of the case from the Assistant Collector to the Collector.
3. Applicability of Rule 10 for short levy demands.
4. Classification of the finished product under Item 17(2) for exemption under Notification 68/76-C.E.

Analysis:

Issue 1: The appeal challenged the order of the Collector of Central Excise, Bombay-1, regarding the payment of duty on PVC plastic coated paper. The appellant argued that a subsequent order by the tribunal had invalidated the demands made by the Collector, entitling them to exemption under Notification No. 68/76-C.E. The appellant contended that the demands were based on incorrect classification and should be set aside.

Issue 2: The legality of the transfer of the case from the Assistant Collector to the Collector was questioned by the appellant. It was argued that the Assistant Collector did not have the authority to transfer the case to the Collector after hearing the party. The appellant contended that such transfer was improper and lacked justification, as it was beyond the Assistant Collector's powers to transfer the matter.

Issue 3: The applicability of Rule 10 for short levy demands was debated. The appellant argued that Rule 173-I of Chapter VIIA should prevail over Rule 10, as it provided for assessment and collection of any short levy. The appellant emphasized that all procedures were followed, and there was no short levy under Rule 10, as the assessment had been approved.

Issue 4: The classification of the finished product under Item 17(2) for exemption under Notification 68/76-C.E. was a key point of contention. The department argued that the base paper was assessed under Item 17(1), making the finished product assessable under Item 17(2) and ineligible for exemption. However, the tribunal held that the finished product was entitled to exemption under the notification, as the appropriate duty had been paid, and set aside the Collector's order for demanding payment on past clearances.

In conclusion, the tribunal set aside the Collector's order, ruling in favor of the appellant based on the exemption entitlement under Notification 68/76-C.E. The tribunal emphasized the correct classification and payment of duty on the finished product, leading to the refund of moneys recovered under the Collector's order within three months.