1996 (2) TMI 217 - AT - Central Excise

Summary

Issues Involved:
1. Classification of "Diamond Impregnated Segments."
2. Applicability of Notification No. 108/88-C.E. and 207/88-C.E.
3. Legality of multiple show cause notices.
4. Binding nature of previous orders by the Assistant Collector and Collector (Appeals).

Summary:

1. Classification of "Diamond Impregnated Segments":
The appellants, manufacturers of "Diamond Impregnated Segments," used these segments for manufacturing complete saws in their factory. Initially, they filed a classification list claiming assessment under Heading 8202.00 and the benefit of Notification No. 108/88-C.E., which was approved by the Assistant Collector. However, subsequent show cause notices challenged this classification, proposing Heading 8209.00 instead.

2. Applicability of Notification No. 108/88-C.E. and 207/88-C.E.:
The Assistant Collector's order dated 17-4-1989 held that the items were entitled to the benefit of Notification No. 108/88-C.E. and 207/88-C.E., and this was confirmed by the Collector (Appeals) on 28-8-1991. Despite this, the Department issued further show cause notices, which were deemed illegal as they contradicted the binding orders. The Tribunal observed that the wordings in the notifications were the same as in Heading 82.02, and thus, Chapter Note 2 could be used to interpret the notifications, confirming the benefit to the appellants.

3. Legality of Multiple Show Cause Notices:
Several show cause notices were issued despite the Assistant Collector's and Collector (Appeals)' orders being in force. The Tribunal found these notices to be illegal and without jurisdiction, as the Department was bound to follow the previous orders, which had attained finality. The Tribunal emphasized that demands could only be issued after finalizing assessments, not before.

4. Binding Nature of Previous Orders:
The Tribunal highlighted that once an order by the Assistant Collector is confirmed by the Collector (Appeals) and no appeal is filed against it, the order attains finality. The Department was bound to follow these orders and finalize all pending matters accordingly. The Tribunal cited the Supreme Court's decision in Union of India v. Kamalakshi Finance Corporation Ltd., reinforcing the binding nature of superior appellate/judicial authorities' orders.

Conclusion:
The Tribunal held that the appellants were entitled to the benefit of Notifications 108/88 and 207/88 during the relevant period. The appeal was accepted, and the Tribunal emphasized the importance of adhering to binding judicial orders and the proper interpretation of exemption notifications.