2000 (6) TMI 542 - AT - Central Excise

Summary

Issues:
Classification of products under Tariff Heading 85.38 vs. 85.36 of the CETA, validity of reviewing classification list, retrospective effect of classification list review.

Analysis:
The appeal was filed against an order confirming the reclassification of products by the Collector (Appeals) from Tariff Heading 85.38 to 85.36 of the CETA. The appellants, engaged in manufacturing lamp holders, power plugs, and sockets, had their classification lists initially approved under Heading 85.38. However, the Department later contended that the products should be classified under Heading 85.36, leading to a review of the classification list. The Assistant Collector, through an Order-in-Original, reclassified the products under sub-heading 8536.90 chargeable at a duty rate of 10% ad valorem, a decision upheld by the Collector (Appeals).

The appellants challenged the reclassification on the grounds that once a classification list is approved, it cannot be retrospectively reviewed. However, the Collector (Appeals) rejected this argument, citing the precedent set in CEAT v. Assistant Collector, emphasizing that if goods were wrongly classified, the officer could issue a notice to rectify the mistake after providing a reasonable opportunity to the affected party. The Collector (Appeals) also highlighted the amendment to Section 11A of the Central Excises Act, allowing for the recovery of short payment of duty even after assessment approval.

The Tribunal found no legal infirmity in the Collector (Appeals) decision, asserting the officer's right to review classification lists if approved erroneously due to factual or legal errors. The judgment emphasized that the law permits such reviews and rejected the appellants' argument against the retrospective effect of the classification list review. Consequently, the appeal was dismissed, affirming the reclassification of the products under Heading 85.36 of the CETA at a duty rate of 10% ad valorem.