2012 (6) TMI 641 - AT - Central Excise

Revalidating the issuance of SCNs - Wrong Classification of goods Revenue allegation that the goods are classifiable under Heading 8537.00 and denial of benefit of Notification No.52/93-CE dt. 28.2.93 - the Commissioner quantified the demand by classifying the goods under Heading 8537 to be adopted only from 14.7.94 and would have only prospective effect - Held that - As there was no suppression of facts the proviso to Section 11A(1) cannot be invoked for demand of duty - Revenue s prayer for confirmation of entire duty by invoking the extended period cannot be accepted as the earlier order of the Tribunal had categorically held that extended period is not available to the Revenue and demand should be restricted to six months period - Having held that the earlier order, in clear terms, restricts the demand to a period of 6 months, we need not examine the intention of the Members writing the judgement - Revenue s appeal is allowed and the matter is remanded for quantification of duty for a period of 6 months in respect of each SCNs issued to the respondents.

Summary

Issues:
Classification of goods under Central Excise Act, 1985, Notification No. 52/93-CE, retrospective validation of SCNs under Section 11A, prospective effect of Board's circular, remand for re-determination of classification issue, quantification of duty for a specific period.

Detailed Analysis:

Classification of Goods:
The case involved the classification of circuit breakers under the Central Excise Act, 1985. The respondents had been discharging duty on the goods under Heading 8535.00 as per Notification No. 52/93-CE. However, subsequent SCNs alleged that the goods should be classified under Heading 85.37. The issue of classification was crucial in determining the duty liability.

Retrospective Validation of SCNs:
The Revenue argued that subsequent to a Tribunal order remanding the matter, an amendment to Section 11A of the Finance Act 2000 retrospectively validated the issuance of SCNs for a specific period. The Revenue contended that demands raised against the assesses should be confirmed for the entire period, irrespective of classification list approvals.

Prospective Effect of Board's Circular:
The respondents argued that due to a Board circular dated 14.7.94 changing the classification, the demand of duty should only be confirmed prospectively. They relied on Supreme Court decisions to support their stance. The issue of whether the Board circular should have a retrospective or prospective effect was central to the case.

Remand for Re-Determination:
The Tribunal had earlier remanded the matter for re-determination of the classification issue and directed that the demand of duty be restricted to a specific period. The majority order emphasized quantifying duty for a limited 6-month period, which was a significant aspect in the subsequent proceedings.

Quantification of Duty for a Specific Period:
The final decision emphasized the need to quantify the duty for a specific 6-month period as directed by the Tribunal's remand order. The Commissioner was bound by the Tribunal's directions, and the demand of duty was required to be fixed for the specified period, not less.

In conclusion, the judgment addressed various complex issues related to the classification of goods, retrospective validation of SCNs, the prospective effect of circulars, and the quantification of duty for a specific period as directed by the Tribunal. The decision highlighted the importance of following Tribunal directions and the limitations on the extended period for demanding duty.