1999 (10) TMI 218 - AT - Central Excise

Summary

Issues:
Application for stay of operation of the impugned order of the Commissioner (Appeals) regarding the recovery of erroneously sanctioned refund of duty paid on HDPE tapes/strips captively consumed in the manufacture of final product, HDPE sacks.

Analysis:
The applicants initially classified HDPE tapes/strips under CET sub-heading 5406.90 and paid duty accordingly before November 1989. The classification lists were approved, and they later classified sacks under CET sub-heading 6301.00, claiming exemption from duty under Notification 223/86. The Assistant Collector denied the exemption, leading to a dispute. The Collector (Appeals) remanded the classification list for fresh adjudication in light of a High Court judgment. Subsequently, refund claims were filed for duty paid during specific periods. The jurisdictional Assistant Collector sanctioned the refunds based on a different classification, which was challenged by the Commissioner under Section 35E(2) of the Central Excise Act, stating that the Assistant Collector lacked authority to revise classifications retroactively. The Commissioner (Appeals) upheld this view, emphasizing that the High Court's judgment did not cover the classification of HDPE tapes/strips.

The applicants argued that the Assistant Collector, post the Collector (Appeals) order, classified HDPE tapes/strips/sacks under Chapter Heading 39 with exemption under Notification 217/86, unchallenged by the Revenue. They sought a stay on the order setting aside the refunds, fearing financial loss. However, the Tribunal noted that the remand order pertained only to the classification of HDPE woven sacks, not tapes/strips. The contention that the Assistant Collector's subsequent order had finality did not support their refund claims linked to the Collector (Appeals) order. Given the contentious nature of the issue, the Tribunal declined to intervene, rejecting the application for stay.