1998 (10) TMI 147 - AT - Central Excise

Summary

Issues:
1. Review of classification lists approved by the adjudicating authority.
2. Power of the Assistant Collector to review classification lists.
3. Correctness of Modvat credit availed by the respondents.

Issue 1: Review of Classification Lists:
The case involved the respondents engaged in the manufacture of chemicals under Chapter 28 and 31 of the Schedule to the C.E.T.A., 1985. The respondents filed classification lists for approval of sodium nitrate/ammonium nitrate under C.E.T. sub-heading 2834.00, which were approved. However, it was later found that the classification lists were wrongly approved as no new goods came into existence by conversion of ammonium nitrate. The Department initiated proceedings for revision of classification lists and recovery of Modvat credit under Rule 57-I of the Central Excise Rules. The Assistant Collector dropped the proceedings, stating that the power to review approved classification lists vested only with the Collector. The Department appealed the decision.

Issue 2: Power of the Assistant Collector to Review Classification Lists:
The respondents argued that the review of classification lists is permissible only if new facts come to light and since the entire manufacturing process was submitted to the department at the time of license grant, review was not warranted. However, the Tribunal referred to a Supreme Court judgment stating that excise authorities are not estopped from taking a different view from the approval of the classification list, and the Assistant Collector was empowered to review the same. The Tribunal held that the lower appellate authority erred in concluding that the classification list cannot be reviewed by the officer who approved it.

Issue 3: Correctness of Modvat Credit:
Regarding the correctness of Modvat credit availed by the respondents, the Tribunal could not make a finding due to insufficient material on record and the absence of a finding by the lower authorities on this argument. The respondents claimed they undertook the manufacturing process correctly and did not carry out any prilling. The Tribunal remanded the matters for a decision on merits after providing the respondents with a reasonable opportunity to be heard in person.

In conclusion, the appeals were allowed by way of remand for further consideration on the correctness of Modvat credit availed by the respondents after clarifying the power of the Assistant Collector to review classification lists.