2000 (3) TMI 410 - AT - Central Excise

Summary

Issues:
Classification list approval, Differential duty demand, Benefit of Notification No. 175/86-C.E., Correct rate of duty, Applicability of Hon'ble Supreme Court decision.

Classification list approval:
The appellants filed an appeal against the Collector of Central Excise (Appeals) order dated 2-1-1992. They are engaged in manufacturing M.S. Arc Electrodes and filed a classification list claiming the benefit of Notification No. 175/86-C.E. The approved classification list mentioned a duty rate of 5% instead of the correct 10%. A show cause notice was issued, demanding differential duty, which was confirmed by the adjudicating authority and the appeal was rejected.

Differential duty demand:
The appellants argued that the demand for differential duty cannot be made for the past period as they were clearing goods under the approved classification list. They relied on a Supreme Court decision stating that excise duty should be levied based on the approved classification list until its correctness is questioned via a show cause notice. The show cause notice in this case was issued to modify the rate of duty, not the classification list itself.

Benefit of Notification No. 175/86-C.E.:
The Notification provided exemptions based on the value of clearances and specified rates of duty. The correct rate of duty for the appellants should have been 10% as per the Notification, but they paid duty at 5%. The differential duty was demanded due to the incorrect rate mentioned in the classification list, not as a revision or denial of the exemption.

Correct rate of duty:
The correct rate of duty payable by the appellants was 10% as per Notification No. 175/86, but they paid only 5%. The differential duty was demanded to rectify this discrepancy, as mentioning the correct rate of duty in the classification list does not constitute a revision or modification of the list itself.

Applicability of Hon'ble Supreme Court decision:
The Revenue argued that the Supreme Court decision cited by the appellants was not applicable in this case, as the issue was about the correct rate of duty mentioned in the approved classification list, not the validity of the classification itself. The Tribunal found no infirmity in the order and rejected the appeal, stating that the Supreme Court decision did not apply since the classification of the product and the availability of the exemption were not in question.

In conclusion, the Tribunal upheld the differential duty demand based on the correct rate of duty specified in Notification No. 175/86-C.E., rejecting the appellants' argument that the demand could not be made for the past period. The decision emphasized that rectifying the duty rate discrepancy in the approved classification list did not constitute a revision of the list itself, and the Supreme Court decision cited by the appellants was deemed inapplicable to the present case.