1996 (11) TMI 424 - AT - Central Excise

Summary

Issues Involved: Classification of calendered fabric coated with rubber, demand of differential duty, classification under Tariff Item 16A(2) and Chapter 40, review of classification, appropriate classification under Chapter 59, Notification under Section 11A, Ministry's classification under Chapter 59, demand of duty, change in classification, due process of law.

Classification of Calendered Fabric Coated with Rubber:
The appellants filed three classification lists claiming classification of fabric under sub-heading No. 4006.90/4005.00 read with Notification No. 71/68. A show cause notice was issued seeking classification under sub-heading 5905.10/5905.20 and to recover duty leviable under Section 11A. The Assistant Collector classified the fabric under Heading 59.05 but did not address the demand of differential duty. The Collector (Appeals) upheld this classification and stated that the duty demanded prior to the show cause notice was correct in law.

Review of Classification and Appropriate Classification:
The appellants claimed that the goods were earlier classifiable under Tariff Item 16A(2) and should fall under Chapter 40. They argued that the classification should be based on usage rather than weight. The Departmental Representative contended that under the earlier Tariff, the goods were classified under Item 19(1)(b) and should be under Chapter 59. Referring to a Supreme Court judgment, it was argued that there was no estoppel against law. The Ministry also held that such goods should be classified under Chapter 59.

Change in Classification and Due Process of Law:
The existing classification can be changed if the assessees are notified and due process is followed. The Assistant Collector provided notice through a show cause notice and heard the appellants before amending the classification. No duty was confirmed as short levied, and no duty was demanded from the assessee. Both the original and Appellate Authority gave detailed reasons for the classification. The Ministry's Notification under Section 11C specified the classification under Heading 59.05. The Tribunal upheld the Collector's order, stating that the demand within six months from the show cause notice date was irrelevant due to the Notification under Section 11C.