1993 (9) TMI 223 - AT - Central Excise

Summary

Issues:
Classification of non-cellulosic unstretched waste under Tariff Item 68, provisional approval by Asst. Collector, subsequent re-classification under Tariff Item 18(IV), enforcement of demands, time-barred assessment, acceptance of classification under Tariff Item 18(IV) by respondents, challenge to provisional assessment.

Analysis:
The case involves an appeal by the revenue against an order regarding the classification of non-cellulosic unstretched waste. The respondents initially classified the product under Tariff Item 68, which was approved provisionally by the Asst. Collector. Subsequently, a show cause notice proposed re-classification under Tariff Item 18(IV), leading to demands being issued. The Collector (Appeals) confirmed the re-classification but limited the enforcement of demands to a specific period. The revenue appealed against this decision.

The respondents, while accepting the re-classification under Tariff Item 18(IV), contended that the initial classification under Tariff Item 68 was changed without proper notice, making the assessment final and time-barred. They argued that the provisional assessment was unnecessary as no bond was filed under Rule 9(b). They referenced a Supreme Court judgment to support their position that demands should be prospective.

Upon review, the Tribunal found that the initial classification under Tariff Item 68 had acquired finality for a specific period, but the subsequent approval of the classification under Tariff Item 68 was provisional. The Asst. Collector's direction for provisional assessment under Rule 9(b) was deemed valid. The Tribunal cited a Supreme Court judgment to establish that assessments based on provisional approvals are considered provisional until finalized. The failure to appeal the order of provisional assessment meant the respondents were bound by it, leading to the enforcement of demands.

The Tribunal dismissed the cross-objection by the respondents, emphasizing that the issue was settled by the Supreme Court judgment regarding provisional assessments. The decision upheld the appeal by the revenue, confirming the re-classification under Tariff Item 18(IV) and enforcing the demands based on the provisional assessment order.