1999 (11) TMI 209 - AT - Central Excise

Summary

Issues:
Classification and payment of duty based on Section 37B order.

Analysis:
The appeal was against the Commissioner (Appeals) order affirming the correct classification and duty payment of the appellant's product in line with a Section 37B order of the Board. The appellant's previous period appeal had been allowed, leading to the conclusion that the demand for duty and penalty was unjustified. Consequently, the appeals were allowed, providing consequential relief to the appellants, and the adjudication order was set aside.

Facts of the Case:
The appellants initially classified their product under Chapter heading 4016.99 but later, the CBEC and Customs issued a clarification under Section 37B, stating that the product should be classified under sub-heading 4008.29. The Department contended that the benefit of this classification would only apply from the date of filing the revised classification list. The appellants began using the revised classification from 16-7-1992 but officially filed the revised list on 16-11-1992.

Arguments by Appellant and Respondent:
The appellant's representative argued that the product should be classified under Chapter Heading 4008.99, as clarified by the CBEC. They claimed that the respondents started using the revised classification without filing the revised list promptly. On the other hand, the respondent's counsel maintained that they had a longstanding dispute with the department regarding the classification and were compelled to modify it based on department instructions. They insisted that their claim under sub-heading 4008.29 should have been accepted.

Judgment:
The Tribunal deliberated on whether a clarification under Section 37B issued by the CBEC should take effect upon issuance or only after revising the classification list accordingly. Despite the CBEC's clarification in March 1992, the respondents filed the revised classification list effective only from 16-11-1992. The Tribunal emphasized that the benefit of a revised classification can only be availed once the classification is officially revised. Therefore, the benefit of classifying the product under 4008.29 was deemed effective only from 16-11-1992. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellants.