1997 (3) TMI 350 - AT - Central Excise

Summary

Issues: Classification of glass fibre RPO tissue under Central Excise Tariff, benefit of exemption Notification 52/86, dispute regarding classification under Sl. No. 10 or Sl. No. 11 of the Notification, change in classification from Chapter 70 to Chapter 68, supply of full text of the report of the Chemical Examiner to the appellants, application of mind by the Assistant Collector on the question of dispute prior to 11-7-1988.

The case involved the classification of glass fibre RPO tissue under the Central Excise Tariff by the appellants, who claimed the benefit of exemption under Notification 52/86, specifically under Sl. No. 10 of the Table. The Central Excise authorities issued a show cause notice questioning this classification and denying the benefit of nil rate of duty under Sl. No. 10, proposing classification under Sl. No. 11 of the same Notification. The matter was appealed to the Collector of Central Excise (Appeals), who remanded the case for a detailed examination. The lower appellate authority directed the original authority to determine whether the product was Glass Fibre or Glass Fabric to ascertain the correct classification under the Notification.

In the subsequent proceedings, the original authority issued a show cause notice after testing the product, proposing classification under Tariff Heading 6807 instead of Chapter 70 as claimed by the appellants. The Assistant Collector confirmed this new classification under Tariff Heading 6807, leading to the appeal by the appellants. The Tribunal noted the department's change in classification from Chapter 70 to Chapter 68, which occurred for the first time on 11-7-1988. Prior to this date, there was no dispute about the classification, with both parties agreeing on Chapter 70 classification. The dispute was limited to the applicability of Sl. No. 10 or Sl. No. 11 of Notification 52/86.

Regarding the classification issue, the Tribunal criticized the authorities for not providing the full test report of the Chemical Examiner to the appellants, stating that the relevance of any portion of the report should be decided by the appellants themselves. The Tribunal directed a fresh decision on the classification from 11-7-1988, emphasizing the need to supply the complete report to the appellants. Additionally, the Tribunal noted that the Assistant Collector had not properly addressed the dispute regarding the application of Sl. No. 10 or Sl. No. 11 of the Notification before 11-7-1988. The matter was remanded for a fresh decision by the adjudicating authority, considering the appellants' submissions and any reports from the Chemical Examiner, ensuring compliance with the principles of natural justice.

As a result, the Tribunal allowed the appeal and remanded the case to the adjudicating authority for a reevaluation of the classification issues, both from 11-7-1988 onwards and regarding the dispute prior to that date, with instructions to consider all relevant factors and provide the appellants with necessary information for a fair determination.