2019 (9) TMI 111 - AT - Central Excise

Classification of goods - Polyester Staple Fibre using the old and used PET bottles - classified under chapter note 1 to chapter 54 of CETA, 1985 or under chapter 55? - section 37B of the Central Excise Act - Revenue s contention is that the adjudicating authority has erred in concluding that the said Board Circular dated 29.06.2010 has only prospective effects. HELD THAT - There is no merits in the above stand of the Revenue. Admittedly the goods in question were being classified under chapter 39 as also under chapter 55 in different Commissionerates and the said Circular has streamlined the classification of the goods in question. Prior to the issuance of the said Circular, the appellant was not discharging its duty liability and it is only with the issuance of the said Circular, the proceedings were initiated against them - Admittedly the Circular in question is not favourable to the assessee and as such the ratio of the various decisions of the Hon ble Supreme Court stands correctly followed by the adjudicating authority. No infirmity is found in the order of the Commissioner. Appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against order passed by Commissioner
- Classification of goods under chapter 54 and chapter 55
- Applicability of Circular No.929/19/2010-EX
- Retrospective vs. prospective effect of Circular
- Interpretation of case laws by Commissioner
- Revenue's appeal against Commissioner's order

Analysis:
The judgment pertains to an appeal against an order passed by the Commissioner where the Revenue challenged the classification of goods and the applicability of Circular No.929/19/2010-EX. The respondents were involved in manufacturing Polyester Staple Fibre using recycled PET waste without polymerization. The Commissioner rejected the plea of the activity falling under chapter 54 and classified the goods under chapter 55 based on show cause notices. The Commissioner ruled that the Circular would be effective prospectively, citing Supreme Court decisions emphasizing retrospective application of beneficial circulars. The Revenue appealed, arguing against the prospective effect of the Circular and the Commissioner's reliance on the Supreme Court decisions.

The Tribunal noted that prior to the Circular, the goods were classified differently across Commissionerates, leading to the initiation of proceedings against the appellant upon issuance of the Circular. The Tribunal upheld the Commissioner's order, stating that the Circular, being unfavorable to the assessee, was correctly interpreted in line with Supreme Court decisions. The Tribunal rejected the Revenue's appeal, finding no merit in their argument against the prospective effect of the Circular and the Commissioner's application of relevant case laws.

In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the Commissioner's order regarding the classification of goods and the prospective effect of Circular No.929/19/2010-EX. The judgment highlights the importance of consistent classification and the interpretation of circulars in line with established legal principles, as demonstrated through the analysis of relevant case laws by the Commissioner.