1996 (12) TMI 87 - HC - Central Excise

Summary

Issues involved: Classification of the product manufactured by the petitioner, validity of show cause notice and detention order.

Classification of the product: The petitioner manufactured a jute fabric with polypropylene surface. Initially classified as "Jute Carpet" at 5%, later the Department sought to reclassify it under a different category. The appellate authority had classified it as jute carpet under item No. 5703.30, which became final. The Court agreed with this classification based on the Tariff Act and Chapter Notes.

Validity of show cause notice: The Department issued a show cause notice to reclassify the product, contending that it should fall under a different category. The Court held that without a change in factual situation or law, the earlier classification cannot be reviewed. The Department's reliance on budget proposals instructions was deemed insufficient to override the existing rules. The show cause notice was deemed without jurisdiction and quashed.

Detention order: The petitioner challenged the detention order, arguing it was premature as there was no default in duty payment. The Court found the detention order untenable and quashed it.

Adjustment of tax: The Court directed the adjustment of the higher tax already paid by the petitioner against future dues or for refund.

In conclusion, the writ petitions were allowed, and no costs were imposed.