1985 (4) TMI 301 - AT - Central Excise

Summary

Issues: Classification of metallised yarn under the Central Excise Tariff from 28-7-69 to 3-2-72; Refund claim based on correct classification under item 15A(2) as an article of plastic; Time-barred claim under rule 11 read with rule 173-J of the Central Excise Rules, 1944.

In this judgment by the Appellate Tribunal CEGAT New Delhi, the issue revolved around the classification of metallised yarn under the Central Excise Tariff from 28-7-69 to 3-2-72. The appellants, who manufactured metallised yarn used as imitation zari, contended that the correct classification should be under item 15A(2) as an article of plastic, contrary to the Department's assessment under item 18 as synthetic yarn. The appellants sought a refund of duty paid under protest amounting to &8377;1,24,822. The lower authorities upheld the classification under item 18 and rejected the refund claim, leading to the appeal before the Tribunal.

During the hearing, the appellants relied on a Gujarat High Court judgment that supported their classification argument. They pointed out that there was no contrary judgment from any other High Court or the Supreme Court. The Department, however, argued that the Tribunal was not bound by the Gujarat High Court judgment, especially since the Department had appealed against it to the Supreme Court. Additionally, the Department raised concerns about the lack of protest records for the duty payment and highlighted the time-bar issue under rule 11 read with rule 173-J of the Central Excise Rules, 1944.

The Tribunal, after careful consideration, emphasized the importance of achieving uniformity in customs and excise duty assessments across the country. They noted that in the absence of contrary judgments, they would respect and follow the Gujarat High Court judgment, which classified metallised yarn under item 15A(2) and not item 18-C.E.T. The Tribunal rejected the Department's request to analyze and overturn the High Court judgment, maintaining consistency in their approach to following High Court decisions.

Regarding the time-bar issue raised by the Department, the Tribunal agreed that a part of the refund claim was beyond the one-year time limit specified in the rules, unless the appellants could prove that the duties were paid under protest. Consequently, the Tribunal allowed the appeal on the classification issue, directing the refund amount to be subject to the time-bar regulations unless protest payment could be substantiated to the Assistant Collector's satisfaction.