2016 (4) TMI 841 - SC - Central Excise

Classification - Synthetic Rubber Aprons and Synthetic Rubber Cots - Whether to be classifiable under Chapter Heading 4009.99 or Chapter Heading 4016.99 - Held that - it is the case of the Revenue in the show cause notices that the goods are classifiable under Chapter Heading 4016.99. Therefore, no new case could have been set up or decided contrary to the show cause notices that the goods fall under Chapter Heading 8448.00 without issuing a fresh show cause notice to the assessee in this regard. By following the decision of this court in the case of Commissioner of Central Excise, Nagpur v. Ballarpur Industries Ltd. 2007 (8) TMI 10 - SUPREME COURT OF INDIA and reiterated in the case of Commissioner of Central Excise v. Gas Authority of India Ltd. 2007 (11) TMI 276 - SUPREME COURT , Revenue is permitted to issue a fresh show cause notice to the assessee seeking to classify the goods under Chapter Heading 8448.00. However, due to the passage of time, it would not be advisable (or permissible under the provisions of the Central Excise Tariff Act) to permit the Revenue to reopen the entire proceedings and classify the goods under Chapter Heading 8448.00. The matter is remitted back to the Tribunal to take a decision on whether the goods manufactured by the assessee are classifiable under Chapter Heading 4009.99 as claimed by the assessee or 4016.99 as claimed by the Revenue. - Appeal disposed of

Summary

Issues: Classification of goods under Central Excise Tariff Act, 1985

In this judgment, the Supreme Court addressed the issue of classification of goods under the Central Excise Tariff Act, 1985. The assessee, engaged in manufacturing Synthetic Rubber Aprons and Synthetic Rubber Cots, claimed that the goods were classifiable under Chapter Heading 4009.99, approved by the Assistant Commissioner. The Revenue contended that the goods should be classified under Chapter Heading 4016.99. The Tribunal, however, classified the goods under Chapter Heading 8448.00, based on a previous order in a different case involving the assessee. The appellant argued that since show cause notices were issued for classification under Chapter Heading 4016.99, the Tribunal could not have directed classification under Chapter Heading 8448.00, a new contention not raised by the Revenue before. Citing precedents, the appellant emphasized the importance of show cause notices as the foundation for levy and recovery of duty. The Court acknowledged the usual practice of allowing fresh show cause notices but due to the passage of time, decided against it in this case. Consequently, the Court set aside the Tribunal's order and remanded the matter to determine whether the goods should be classified under Chapter Heading 4009.99 or 4016.99, limiting the remand to this specific issue.

This judgment primarily deals with the classification of goods under the Central Excise Tariff Act, 1985. The dispute arose when the assessee claimed classification under Chapter Heading 4009.99, while the Revenue argued for Chapter Heading 4016.99. The Tribunal, however, classified the goods under Chapter Heading 8448.00, deviating from the initial contentions. The Court highlighted the significance of show cause notices as the basis for duty levy and recovery, emphasizing the need for consistency in classification. Despite the usual practice of allowing fresh show cause notices, the Court, considering the time elapsed, refrained from permitting the Revenue to reopen proceedings for reclassification. Instead, the Court set aside the Tribunal's decision and remanded the matter solely for determining the appropriate classification between Chapter Heading 4009.99 and 4016.99, restricting the scope of the remand to this specific issue.