2000 (10) TMI 80 - AT - Central Excise

Summary

Issues: Classification of STD/PCO monitor and parts/accessories, applicability of duty rates, interpretation of circulars, enforceability of demand of duty, relevance of Section 110 of the Finance Act, 2000.

In this judgment by the Appellate Tribunal CEGAT, Court No. II, New Delhi, the issue revolved around the classification of STD/PCO monitor and parts/accessories for the period of November 1998 to February 1999. The Department sought to classify the products under different tariff entries with a higher duty rate, leading to a demand for differential duty from the respondents. The lower Appellate authority set aside the duty demand, citing a circular by the Central Board of Excise and Customs (CBEC) from 1994 that classified the goods under a different tariff heading. The Tribunal observed that the earlier circular was in force during the dispute period, thus affirming the lower authority's decision. The Tribunal highlighted the Supreme Court's ruling that the circular in force at the relevant time governs classification, not subsequent circulars changing the classification. The Tribunal emphasized that the demand period fell within the validity of the earlier circular, leading to the correct payment of duty by the respondents.

Regarding the enforceability of the duty demand, the Revenue argued that Section 110 of the Finance Act, 2000, made the demand enforceable for the period before the subsequent circular. However, the Tribunal dismissed this argument, stating that the earlier circular's validity during the dispute period rendered the demand void of short-levy. The Tribunal reiterated the binding nature of CBEC circulars on Departmental authorities and emphasized that the demand for the period in question had been rightfully vacated by the lower Appellate authority. The Tribunal concluded that the Revenue's appeal lacked merit, rejecting it based on the established legal principles and interpretations of the relevant circulars and rulings by the Supreme Court.