2016 (3) TMI 562 - AT - Central Excise

Denial of small scale exemption - Held that - Classification list and period in the present case is different from the period and classification list involved in the case of Commissioner (Appeals) s Order dated 06-4-1994. In the present case which is based on Commissioner (Appeals) s Order dated 04-7-2001 which was accepted by the revenue cannot be influenced by any out come in the appeal filed by the revenue in the New Delhi Tribunal. We, therefore, do not find any infirmity in the impugned order of Commissioner (Appeals). Therefore the same is upheld and revenue s appeal is dismissed. CO also stands disposed of accordingly.

Issues:
Classification of products under different sub-headings for Central Excise duty, denial of small scale exemption, rejection of revenue's appeal by Commissioner (Appeals), pending appeal before Tribunal New Delhi, finality of classification list and period in the present case.

Analysis:

1. Classification of Products and Denial of Small Scale Exemption:
The case involved the classification of products - Time Recorder, Line Converter/Concentrator, and Printer under specific sub-headings for Central Excise duty. The respondent claimed small scale exemption under Notification No. 175/86. However, the department sought to classify these products as Computers under Heading No. 8471, leading to the denial of the small scale exemption. Show cause notices were issued by the department, which were later dropped based on the Commissioner (Appeals)'s order upholding the classification. The issue of classification and exemption was central to the dispute.

2. Rejection of Revenue's Appeal by Commissioner (Appeals):
The Commissioner (Appeals) rejected the revenue's appeal on the grounds that the classification list approved in a specific Order-in-Original dated 31-07-1997 differed from the classification list in the Order-in-Original dated 27-07-1993. The rejection was based on the finality of the classification list approved in 1997, which covered various periods and pertained to different provisional assessment orders. The rejection of the revenue's appeal by the Commissioner (Appeals) was a crucial aspect of the judgment.

3. Pending Appeal Before Tribunal New Delhi:
The appellant, represented by Shri H.M. Dixit, Assistant Commissioner, argued that the issue on merit was pending in an appeal before the Tribunal in New Delhi. However, the status of the appeal could not be produced despite the significant time elapsed since its filing. The pending appeal before the Tribunal added complexity to the case and raised questions about the impact of its outcome on the present dispute.

4. Finality of Classification List and Period:
The respondent's counsel, Shri Mayur Shroff, emphasized that the Order-in-Original was based on the finalization and upholding of the classification by the Commissioner (Appeals) in 2001. It was argued that the classification list and period in the present case were distinct from those in previous orders and appeals. The finality of the classification list and period in the present case was crucial in determining the validity of the Order-in-Original and subsequent actions.

5. Tribunal's Findings and Decision:
The Tribunal carefully considered the submissions from both parties. The Commissioner (Appeals)'s findings highlighted the differences in classification lists and periods between the present case and previous appeals. The Tribunal upheld the Commissioner (Appeals)'s decision, stating that the classification list approved in 1997 was separate from the list in 1993, and hence, the revenue's appeal was dismissed. The finality of the classification list and the lack of overlap with previous periods were key factors in the Tribunal's decision.

In conclusion, the judgment addressed the complex issues of classification, exemption denial, pending appeals, and the finality of classification lists and periods. The Tribunal's decision to uphold the Commissioner (Appeals)'s rejection of the revenue's appeal was based on the distinct classification lists and periods involved in the case.

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