1986 (12) TMI 134 - AT - Central Excise

Summary

Issues:
Classification of tear off and tear down vial seals under TI 42 CET or TI 68 CET, jurisdiction of the Collector to confirm demand under Section 11-A of the Central Excises and Salt Act, jurisdiction of the Collector to review classification approved by the Assistant Collector, validity of the order for confiscation of seized goods.

Classification Issue:
The appellants, manufacturers of pilferage proof caps and aluminium vial seals, claimed exemption under Notifications 83/83 and 77/83. The dispute arose when the department seized tear off and tear down vial seals, alleging they were classifiable under TI 42 CET instead of TI 68 CET. The Collector classified the seals as pilferage proof caps under TI 42 CET, leading to the present appeal. The appellants argued that the seals were not caps but seals, not known as pilferage proof caps in trade, and could not be classified as such. The Tribunal analyzed the definition of pilferage proof caps, emphasizing they must have integral pilfer-proof arrangements and be reusable, unlike the one-time-use seals in question. The Tribunal held that the seals did not qualify as pilferage proof caps under TI 42 CET.

Jurisdiction Issue - Review and Demand for Duty:
The Tribunal addressed the Collector's jurisdiction to review the classification approved by the Assistant Collector and confirm the demand under Section 11-A. It was argued that the Collector could not overturn the Assistant Collector's classification without a review under Section 35-A. The Tribunal agreed, stating that in the absence of new material, the Collector had no jurisdiction to differ from the earlier classification. Regarding the demand for duty, the Tribunal held that the Collector lacked the authority under Section 11-A, as this power was initially conferred only on the Assistant Collector. The Tribunal rejected the argument that the Collector could exercise the Assistant Collector's powers, emphasizing the absence of such provision in the Act.

Confiscation Issue:
The Tribunal examined the order for confiscation of the seized goods, concluding that since the goods were cleared under the earlier classification by the Assistant Collector and were exempt under TI 68 CET, no statutory violation warranted confiscation. The Tribunal held that the confiscation order was improper due to the absence of any infringement justifying confiscation. Consequently, the Tribunal set aside the Collector's order, allowing the appeal and providing consequential relief if necessary.