2000 (10) TMI 248 - AT - Central Excise

Summary

Issues:
Challenge to validity of order regarding duty demand for a specific period - Classification of goods under different headings - Time-barred differential duty demand - Provisional approval of classification lists - Compliance with procedural requirements for provisional assessment - Justification for differential duty demand - Necessity of separate show cause notice for demanding differential duty.

Comprehensive Analysis:
The judgment involves a challenge by the Revenue against the validity of an order related to duty demand for a specific period concerning the classification of goods. The respondents had filed classification lists for their products, including a "Battery Pack," under a particular sub-heading. However, the Revenue did not accept this classification and issued a show cause notice for reclassification. The Assistant Collector subsequently changed the classification, leading to a demand for duty payment for the goods cleared during a specific period. The Collector (Appeals) confirmed the classification change but held that the duty demand for the mentioned period was not recoverable as the goods were cleared under approved classification lists.

The main issue in the appeal was whether the differential duty demand for the period in question was time-barred. The Revenue contended that the clearances made by the respondents during that period were not under approved classification lists but were provisionally approved. The respondents argued that they were not informed of any provisional approval and that no show cause notice for recovery of the differential duty was served on them. The Tribunal analyzed the facts and legal provisions to determine the validity of the differential duty demand.

The Tribunal observed that the respondents' classification lists were provisionally approved, as evidenced by the show cause notice issued for reclassification. The respondents had cleared goods during the pending approval of their lists and paid duty based on declared prices. The Tribunal emphasized the legal requirement for provisional assessment under Rule 173-CC of the Central Excise Rules, which allows removal of goods pending approval by paying duty based on declared prices. The duty paid under such circumstances is deemed to be assessed provisionally under Rule 9B.

The Tribunal rejected the argument that the provisional assessment order applied only to goods cleared after its issuance, stating that clearances during pending classification approval were under provisional assessment. The Tribunal cited relevant case law to support its conclusion that the duty demand for the period in question was not time-barred and that the respondents were liable for the differential duty on goods cleared before final approval of their classification lists.

Regarding the necessity of a separate show cause notice for demanding the differential duty, the Tribunal held that the initial show cause notice for reclassification sufficed. The Tribunal emphasized the respondents' failure to comply with procedural requirements for provisional assessment and upheld the Revenue's right to demand the differential duty based on the final classification. The Tribunal set aside the Collector (Appeals) order deeming the demand time-barred and allowed the Revenue's appeal.