2011 (5) TMI 782 - AT - Central Excise

Duty demands - change of classification from sub-heading 5903.21 to sub-heading 3923.90 - prospective or retrospective Held that - Since the assessments for this period were provisional the duty demand on account of finalization of classification under sub-heading 3923.90 is not hit by the limitation. In view of this, we are of the view that so far as duty demand for the period from August 91 to March 93 is concerned, the same has been rightly upheld and as such there is no infirmity in the impugned order

Summary

Issues: Classification of goods under Central Excise Tariff

Analysis:
1. Classification Dispute: The appellant, a manufacturer of Textile fabrics coated with plastics, faced a classification dispute regarding items sold as Tarpaulins, Vehicle Covers, and Tents. The appellant claimed classification under sub-heading 5903.21 of the Central Excise Tariff, while the department argued for classification under sub-heading 3923.90. The Assistant Commissioner confirmed a duty demand of Rs. 4,97,695, leading to an appeal to the Commissioner (Appeals) and subsequently to the Tribunal.

2. Provisional Assessment: The department issued a show-cause notice in 1991 for a duty demand based on changed classification. Provisional assessment was ordered for the period from August 1991 to March 1993. A subsequent show-cause notice in 1994 demanded differential duty, confirmed by the Assistant Commissioner. The Commissioner (Appeals) upheld this decision, leading to an appeal before the Tribunal.

3. Legal Arguments: The appellant argued that their classification list approved in 1990 under sub-heading 5903.21 should be binding unless challenged, citing precedents that classification changes should be prospective with valid reasons. The Tribunal noted that the duty demand for the period from February 91 to July 91 was not sustainable due to the approved classification list. However, for the period from August 91 to March 93, where assessments were provisional, the duty demand based on finalization of classification under sub-heading 3923.90 was upheld.

4. Tribunal's Decision: The Tribunal allowed Appeal No. E/868/03, setting aside the duty demand for the period from February 91 to July 91. On the other hand, Appeal No. E/893/03 was dismissed, upholding the duty demand for the period from August 91 to March 93. The Tribunal found no infirmity in the impugned order for the latter period, based on the provisional assessments and subsequent finalization of classification.

This detailed analysis of the judgment highlights the classification dispute, provisional assessments, legal arguments, and the Tribunal's decision on the duty demands for the respective periods, providing a comprehensive understanding of the case.