2016 (1) TMI 199 - AT - Central Excise

Classification of goods - whether the product manufactured by respondent is rough forging and merits classification under 73.26 as claimed by the respondent or 72 07.10 as confirmed by the first appellate authority - Held that - The classification which has been arrived at by the first appellate authority in his impugned order is under Chapter Heading No. 7207. In our view the impugned order cannot travel beyond the show-cause notice and classifying the product under Chapter Heading No. 7207 seems to be incorrect. At the same time the findings of the adjudicating authority are contested before the first appellate authority. Hence in the interest of justice we find that the matter needs reconsideration by the first appellate authority. Without expressing any opinion on merits of the case keeping all issues open we set aside the impugned order and remand the matter back to the first appellate authority to reconsider the issue afresh following the principles of natural justice. - Matter remanded back - Decided in favour of Revenue.

Summary

Issues:
Classification of product under Chapter Heading No. 7326 or 7214, Appeal against Order-in-Appeal SVS/346/NGP-II/2006, Interpretation of relevant facts and submissions, Consideration of evidence and principles of natural justice.

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI pertained to the classification of Iron and Steel products by the respondent under Chapter Heading No. 7326 till 31.3.2004 and subsequently under Chapter Heading 7216 and 7214 from 01.04.2004. The Revenue issued a show-cause notice challenging this classification, which was contested before the adjudicating authority. The adjudicating authority confirmed the demands raised with interest and penalties. However, the first appellate authority reversed this decision and allowed the appeal, leading to the appeal by the Revenue.

During the proceedings, the Revenue argued that the classification under 7207.10/7207.90 was incorrect, emphasizing that the product should fall under Chapter Heading 73.26. They highlighted the absence of evidence supporting the classification under 7207, and referred to historical case law and circulars to support their stance. On the other hand, the respondent contended that the product was correctly classified as "rough forging" under 73.26, supported by the manufacturing activity and purchase orders.

After considering the submissions, the Tribunal found that the matter required reconsideration by the first appellate authority. The Tribunal noted that the classification under Chapter Heading No. 7207 seemed incorrect and that the impugned order exceeded the scope of the show-cause notice. Therefore, the Tribunal remanded the matter back to the first appellate authority for fresh consideration, emphasizing adherence to natural justice principles and consideration of all relevant evidence.

In conclusion, the appeal was allowed by way of remand, granting the respondent the opportunity to present evidence in favor of their classification under 72.14/72.16 as alleged in the show-cause notice. The first appellate authority was directed to adjudicate the matter within the scope of the notice and principles of natural justice, ensuring a fair reconsideration of the classification issue.