2019 (7) TMI 634 - AT - Central Excise

Scope of SCN - classification of rubber solution - while the claimed classification was heading no. 4006 90 of the First Schedule to the Central Excise Tariff Act, 1985, the show cause notice proposed classification under heading no. 4005 00 of the First Schedule to the Central Excise Tariff Act, 1985 despite which the impugned order has classified the goods under heading 3506 00 of the First Schedule to the Central Excise Tariff Act, 1985 - HELD THAT - During the pendency of the proceedings on the lists filed under section 173B and 173C of erstwhile Central Excise Rules, 1944, the assessment of periodical returns were kept pending or, upon completion, computed in accordance with the law as settled in the dispute. The original authority has merely directed the jurisdictional range officer to re-work the demand of duty for recovery of the differential amount. As the classification has since been settled and the re-working of the differential duty thereof on the RT-12, filed for the relevant period, is a mandatory consequence, we find that the original authority has merely utilized the proceedings arising out of the show cause notice to issue directions for compliance with the orders of the Tribunal which are anyway to be implemented. There is no flaw in the order - This is not a decision on classification on the initiative of the original authority after due evaluation of any submission but mere direction to enable implementation of the orders of the Tribunal. Appeal dismissed - decided against appellant.

Issues involved:
Classification of goods under Central Excise Tariff Act, 1985; Discharge of show cause notice beyond limited charge; Recovery of differential duty; Compliance with Tribunal orders.

Classification of goods under Central Excise Tariff Act, 1985:
The appeal was limited to challenging the discharge of the show cause notice due to the classification issue. The appellant claimed the goods fell under heading no. 4006 90, but the show cause notice proposed classification under heading no. 4005 00. However, the impugned order classified the goods under heading 3506 00. The appellant argued that the authorities should accept the classification claimed by the assessee if the proposed alternative is deemed inapplicable, citing relevant Tribunal and Supreme Court decisions.

Discharge of show cause notice beyond limited charge:
The appellant contended that the impugned order and that of the original authority exceeded the limited charge in the show cause notice. Despite the proposed alternative classification in the notice, the appellant argued that the authorities should adhere to the classification claimed by the assessee, as per previous decisions.

Recovery of differential duty:
The issue in dispute was not the classification itself but the recovery of differential duty resulting from the revised classification. The original authority directed the re-working of the demand of duty for the recovery of the differential amount. The Tribunal found that the re-working of the differential duty was a mandatory consequence of the settled classification, and the original authority's order was merely to ensure compliance with Tribunal orders.

Compliance with Tribunal orders:
The Tribunal upheld the original authority's order, stating that it was not a decision on classification but a direction to implement the Tribunal's orders. The proceedings were utilized to issue directions for compliance with the settled classification, and there was no flaw in the order. The Tribunal dismissed the appeal, finding no reason to interfere with the impugned order.

This detailed analysis of the judgment covers the issues of classification of goods under the Central Excise Tariff Act, 1985, discharge of show cause notice beyond limited charge, recovery of differential duty, and compliance with Tribunal orders, providing a comprehensive understanding of the legal reasoning and decision-making process involved in the case.

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