2000 (2) TMI 260 - AT - Central Excise

Summary

Issues:
1. Classification of dipped man-made fabrics.
2. Applicability of show cause notices for reclassification.
3. Effect of Board's order under Section 37B on classification.
4. Challenge to the classification of the product under 5905.20.

Issue 1: Classification of Dipped Man-Made Fabrics
The appeals by M/s. Madura Coats Ltd. and Revenue concern the classification of dipped man-made fabrics. The dispute arose from the department's proposal to reclassify the fabrics under heading 5906.90, contrary to the previous classification under 54.09 approved by the Assistant Collector. The subsequent show cause notices suggested reclassification under sub-heading 5905.20. The assessees argued that the demands prior to 20-1-1987 should not be considered valid based on the decision in Cotspun Limited. The Tribunal agreed, applying the principles of the Cotspun Limited case to uphold the assessees' position.

Issue 2: Applicability of Show Cause Notices for Reclassification
The Revenue contended that the relevant date for classification change should be 10-12-1986 when the first show cause notice was issued, not 20-1-1987. They argued that the assessees' withdrawal of additional pleas regarding classification under heading 5409.00 implied acceptance of the classification change. However, the Tribunal found that the demands confirmed in the Order-in-Original and upheld by the Order-in-Appeal should only be valid from 20-1-1987, as per the Cotspun Limited judgment.

Issue 3: Effect of Board's Order under Section 37B on Classification
The assessees invoked the Board's order under Section 37B to support their position on classification. However, the Tribunal rejected this argument, noting that the show cause notices were issued before the Board's order. The judgment in H.M. Bags Manufacturer v. CCE was cited to emphasize that circulars from the Board have prospective effect only from their date of issue. Therefore, the Board's order under Section 37B did not impact the classification in this case.

Issue 4: Challenge to Classification of the Product under 5905.20
The assessees indicated their withdrawal of challenges to the classification of the product under 5905.20. Consequently, no further order was required on this aspect. The Tribunal ultimately rejected the appeals of the Revenue and partially allowed the appeals of the assessees by quashing demands prior to 20-1-1987, modifying the Order-in-Appeal accordingly.

This detailed analysis of the judgment highlights the key issues surrounding the classification of dipped man-made fabrics, the implications of show cause notices, the impact of the Board's order under Section 37B, and the challenge to the classification of the product under 5905.20. The Tribunal's decision was guided by legal precedents and interpretations to arrive at a fair and reasoned outcome.