2013 (10) TMI 1146 - AT - Central Excise

Classification of HDPE Tapes Assessment Provisional OR Not - Held that - For the assessment to be provisional, the elaborate procedure as prescribed under Rule 9B has to be followed by the Revenue as also by the assessee - Such procedure envisaged by Rule 9B of the erstwhile Central Excise Rules, require an order to be passed by the proper officer in terms of provisions of Rule 9B (1) - The assessee is required to execute a Bond and the expression under protest has to be written on each and every documents including the invoices and the returns to be filed by the assessee - Such provisional assessment has to be converted into a final assessment under Rule 9B(5). Order classifying the goods not to be treated provisionally merely because the appeal or other proceedings questioning the correctness of the such order are pending before the higher authorities and for establishing the clearances to be on the provisional basis, an order under Rule 9B of the erstwhile Central Excise Rules, 1944 and clearances / payment of duty on provisional basis is essential. As such, we hold that the assessment were not provisional as held by Commissioner (Appeals). If the assessments were not provisional, the question whether the classification has to be done under 3920.32 in terms of Board s circular No. 54/12/91-CX.1 dated 24.9.92 is to be decided. We find that exact issue stand decided by the Hon ble Supreme Court in the case of H M Bags Manufacturers 1997 (7) TMI 119 - SUPREME COURT OF INDIA as also in the case of Jai Fibres referred 2007 (11) TMI 22 - SUPREME COURT OF INDIA . In that scenario, the said decisions would become applicable to the facts of the present appeals. By following the same, we hold that for the disputed period August, 1989 to 14.10.92, the classification would not be under heading 3920.32 as held by the Commissioner (Appeals). - Decided in favor of assessee.

Summary

Issues Involved:
Classification of HDPE tapes manufactured by the appellants under Chapter headings 54.06 and 3926.90 from August 1989 to 14.10.92. Applicability of Board's circular and trade notice issued on 24.9.92 and 5.11.92. Provisional assessment and compliance with Rule 9B of the Central Excise Rules. Interpretation of the Supreme Court judgments in the cases of HM Bags Manufacturer and Jai Fibres Ltd. regarding classification of HDPE tapes.

Analysis:
The appeals involved in this judgment concern the classification of HDPE tapes manufactured by the appellants under Chapter headings 54.06 and 3926.90 from August 1989 to 14.10.92. The dispute arose when the appellants initially claimed classification under Chapter 54, but later filed a revised classification under heading 3926.90. The High Court directed the appellants to clear goods under subheading 3926.90 with a nil rate of duty, pending the resolution of the classification issue. The Board's circular issued on 24.9.92 clarified the classification under heading 3920.32, which was challenged by the Revenue before the Commissioner (Appeals).

The Assistant Commissioner, relying on the Supreme Court decision in HM Bags Manufacturer, held that the Board's circular would only apply prospectively from the trade notice date. However, the Commissioner (Appeals) reversed this decision, leading to the present appeal. The Tribunal noted that the assessments were not provisional as claimed by the Commissioner (Appeals) since the proper procedure under Rule 9B for provisional assessment was not followed. The execution of a bank guarantee by the appellants to cover the differential amount did not equate to provisional assessment.

The Tribunal referred to the Supreme Court judgments in HM Bags Manufacturer and Jai Fibres Ltd., which held that the classification under heading 3920.32 could only be adopted from the date of the circular, not retrospectively. Therefore, for the period in question, the Tribunal held that the classification would not be under heading 3920.32 as determined by the Commissioner (Appeals). The impugned order was set aside, and the original authority's orders were restored, disposing of all appeals accordingly.

In conclusion, the Tribunal clarified the non-provisional nature of the assessments, the applicability of the Board's circular from the trade notice date, and the correct classification of HDPE tapes based on the Supreme Court precedents. The judgment provides a detailed analysis of the legal issues involved in the classification dispute and sets a precedent for similar cases in the future.