2017 (6) TMI 530 - AT - Central Excise

Classification of goods - whether the goods manufactured by assessee-respondent shall be governed by N/N. 23/2003-CE dated 31.03.2003 or N/N. 7/2003 dated 01.03.2003 CE? - Held that - Applicability of N/N. 7/2003 dated 01.03.2003 shall be ruled out when a specific matter is dealt by a specific N/N. 23/2003 dated 31.03.2003 in respect of the goods in question - Appellant is directed to satisfy the adjudicating authority as to whether goods fall under Sl. No.5, 6 and 7 of the Table appended to the N/N. 23/2003. The condition of the notification is to be satisfied - appeal allowed by way of remand.

Summary

Issues:
1. Interpretation of Notification No. 23/2003-CE dated 31.03.2003 vs. Notification No. 7/2003 dated 01.03.2003 CE.

Detailed Analysis:
The main issue in this case is the interpretation of Notification No. 23/2003-CE dated 31.03.2003 in comparison to Notification No. 7/2003 dated 01.03.2003 CE. The Revenue argued that the goods manufactured by the assessee-respondent should be governed by Notification No. 23/2003, which requires specific conditions to be met, regardless of the chapter under which the goods fall. The appellate authority had allowed the benefit of Notification No. 23/2003 to the assessee-respondent without considering this overriding provision. The assessee-respondent, on the other hand, contended that there were no allegations regarding this issue in the show-cause notice or the review order by the Revenue.

The Tribunal emphasized that the show-cause notice should not be hyper-technically read when a fundamental issue needs to be decided in accordance with the mandate of the Notification. The Tribunal extracted relevant portions of Notification No. 23/2003 for clarity. It was concluded that the applicability of Notification No. 7/2003 dated 01.03.2003 should be ruled out when a specific matter is addressed by Notification No. 23/2003 dated 31.03.2003 concerning the goods in question. The Tribunal directed the appellant to demonstrate whether the goods fall under specific serial numbers of the table appended to Notification No. 23/2003 and satisfy the conditions stipulated therein.

Another issue raised by the assessee-respondent was regarding the penalty. The Tribunal noted that the appeal was against the penalty, but since the matter was remanded for further examination, it was premature to make a decision on the penalty at that stage. The adjudicating authority was instructed to provide the appellant assessee with an opportunity to present their case and reach a proper conclusion based on the evidence and pleadings that would be scrutinized concerning the levy of the penalty.

In conclusion, the Tribunal remanded both appeals to the adjudicating authority with specific directions to address the issues related to the interpretation of the notifications and the penalty, allowing for a fair hearing and examination of evidence before reaching a final decision.