1999 (8) TMI 687 - AT - Central Excise

Summary

Issues: Classification of "Rice Rubber Rolls" under Central Excise Tariff Act, retrospective application of classification changes, violation of principles of natural justice in enhancing total value of clearances for denying small scale exemption.

Classification Issue:
The case involved the classification of "Rice Rubber Rolls" under the Central Excise Tariff Act. Initially, the Central Board of Excise and Customs classified the product under Tariff Item 16 A(3). However, subsequent classifications by the Assistant Collector and the Collector (Appeals) varied, leading to multiple appeals and conflicting decisions. The Assistant Collector classified the product under sub-heading 4016.99, while the Collector (Appeals) classified it under sub-heading 4009.99, extending the benefit of Notification No. 197/67. The dispute continued with changes in classification lists and show cause notices. The Appellate Tribunal, referring to previous judgments, upheld the classification under sub-heading 4016.99, denying the small scale exemption under Notification No. 197/67.

Retrospective Application Issue:
The issue of retrospective application of classification changes arose due to conflicting interpretations of the High Court's clarification on subsequent periods for classification. The High Court clarified that the department could classify the goods under Heading 4016.99 or any other applicable Tariff Entry for subsequent periods. The Tribunal determined that the subsequent period would commence from 1-8-1992, following the High Court's clarificatory order. The Appellants argued for prospective classification changes, citing previous judgments, but the Tribunal clarified that the case did not involve the revision of approved classification lists, and thus, the changes would be effective from the specified date.

Principles of Natural Justice Violation:
Regarding the violation of principles of natural justice in enhancing the total value of clearances without notice to deny small scale exemption, the Tribunal acknowledged the necessity of affording a reasonable opportunity of hearing before modifying declarations. As the Revenue did not contest the violation, the Tribunal remanded the appeals to the Assistant Commissioner for fresh adjudication following the principles of natural justice. The appeals on this issue were allowed by way of remand.

In conclusion, the judgment addressed the classification of "Rice Rubber Rolls," the retrospective application of classification changes, and the violation of principles of natural justice in enhancing total clearances without notice. The Tribunal upheld the classification under sub-heading 4016.99, clarified the effective date of classification changes, and remanded appeals concerning the violation of natural justice for fresh adjudication.