2006 (10) TMI 13 - AT - Central Excise

Central Excise The process of manufacturing of insta whitening system is not a new product, hence not excisable as held earlier Tribunal ruling in the assesses own case is bound on the Commissioner when Tribunal earlier order had not been challenged or set aside Revenue can not re-open the issue once it is settled by an earlier judgment

Summary

Issues:
1. Dispute over classification of product for excise duty.
2. Commissioner's refusal to accept Tribunal's ruling.
3. Applicability of previous Tribunal judgments.
4. Judicial discipline and binding nature of Tribunal's order.
5. Legal principles regarding acceptance of Tribunal's order by Revenue.

Analysis:

1. The dispute in this case revolves around the classification of the product "Insta whitening system" under the brand name "Ujala Supreme" for excise duty purposes. The Tribunal, in a detailed majority order, found that the manufacturing process did not result in the creation of a new excisable product. The Revenue accepted this ruling in previous cases but the Commissioner of Central Excise, Calicut, refused to accept it, leading to the demand of duty and penalty.

2. The Commissioner's refusal to accept the Tribunal's ruling, which was accepted by other Commissioners and not appealed by the Revenue, raised concerns regarding judicial discipline. The Commissioner issued a show cause notice challenging the Tribunal's order, citing a minority view that differed from the majority decision. This led to a disagreement between the parties regarding the binding nature of the Tribunal's order on the Commissioner.

3. The Tribunal's order in the assessee's favor was based on a detailed analysis of the manufacturing process and the absence of a new dutiable product. Previous judgments by the Tribunal and other legal authorities were cited to support the appellants' position. The appellants argued that the Revenue should follow the principle of finality in judicial decisions and not reopen settled matters without filing an appeal.

4. The Tribunal emphasized the importance of upholding its previous order, especially when the Revenue had accepted the same principle in identical cases. Citing legal precedents, including judgments by the Apex Court, the Tribunal highlighted the need for consistency and adherence to established legal principles. The Tribunal expressed disappointment in the Commissioner's refusal to accept the settled matter and emphasized the need for judicial discipline in honoring Tribunal's decisions.

5. The Tribunal, in line with the Apex Court's rulings, held that once an issue is settled by a Tribunal judgment and accepted by the Revenue without appeal, it cannot be reopened. The absence of any material change in circumstances or legal provisions further strengthened the binding nature of the Tribunal's ruling on the Commissioner. Consequently, the Tribunal allowed the stay applications and appeals, reaffirming the finality and binding effect of its previous order on the Commissioner.

This comprehensive analysis of the judgment highlights the key legal issues, arguments presented by the parties, and the Tribunal's reasoning in resolving the dispute over the classification of the product for excise duty purposes.