2024 (6) TMI 371 - AT - Central Excise

Scope of SCN - Classification of goods - by-products such as hard pitch, extra hard pitch, soft pitch, total pitch and pitch creosote mixture ( PCM ) - to be classified as bye products under Chapter Heading 2706 of Central Excise Tariff Act, 1985 or under subheading 2708.11 for certain products - contention of the appellant (department) in the grounds of appeal is that the impugned order does not bring on record the duty paid by the Respondent on hard pitch, extra hard pitch, soft pitch and total pitch in terms of the classification held by the Hon ble Supreme Court, viz. tariff subheading 2708.11 - HELD THAT - It is the settled principle of law that an order cannot be passed travelling beyond the scope of the SCN inasmuch as the SCN lays down the foundation of adjudication proceedings and if the charges are not brought out properly to the knowledge of the assessee, then he should not face charges by any order passed beyond the facts contained in the SCN. Any infirmity in the SCN cannot be bridged by the adjudication or appellate authority. The adjudicating authority has correctly quantified the duty payable in the impugned order passed pursuant to remand directions. Accordingly, there is no infirmity in the impugned order - appeal filed by the Revenue is dismissed.

Summary

Issues:
Classification of products under Central Excise Tariff Act, 1985, Duty demand on various products, Verification of duty payment, Scope of Show Cause Notice (SCN)

Detailed Analysis:

Classification of Products:
The case involved the classification of various by-products generated during the manufacturing process of iron and steel products by a company. The dispute arose regarding the correct classification of hard pitch, extra hard pitch, soft pitch, total pitch, and pitch creosote mixture (PCM) under the Central Excise Tariff Act, 1985. The department contended that these products should be classified under a specific subheading, while the Respondent had classified them under a different chapter heading. Previous orders and judgments by CESTAT and the Hon'ble Supreme Court were cited to support the arguments on classification.

Duty Demand and Verification:
The department had issued a Show Cause Notice (SCN) demanding excise duty on the products based on a specific classification. Subsequent orders confirmed the duty demand, but CESTAT Kolkata set aside the demand based on incorrect classification proposed by the department. The department argued that the duty paid by the Respondent should have been verified under the correct classification determined by the Tribunal. However, the Respondent maintained that the duty demand was correctly set aside by CESTAT Kolkata, and the adjudicating authority was not required to re-verify the duty payment under a different classification.

Scope of Show Cause Notice:
The Respondent emphasized that the foundation of adjudication proceedings lies in the Show Cause Notice (SCN), and any order passed should not go beyond the scope of the charges mentioned in the SCN. Citing legal principles and a judgment by the Hon'ble Supreme Court, the Respondent argued that the duty demand should align with the classification proposed in the SCN, and any deviation would be impermissible. The Respondent contended that the duty demand was correctly quantified by the adjudicating authority in line with the remand directions.

Conclusion:
After considering the arguments presented by both parties and reviewing the previous orders and legal principles, the Tribunal upheld the impugned order. It was determined that the duty demand was correctly set aside based on the classification determined by CESTAT Kolkata. The Tribunal emphasized the importance of adhering to the scope of the SCN in adjudication proceedings and concluded that there was no infirmity in the impugned order. The appeal filed by the Revenue was rejected, and the impugned order was upheld.