2012 (2) TMI 397 - SC - Central Excise

Maintainability of appeal - Revenue is in appeal against order of rejection of appeal by Tribunal Tribunal confirmed the order of first appellate authority regarding classification of Bitulux Insulation Board under Chapter Sub-heading 4407.10 at nil rate of duty - Held that - Since the revenue has not questioned the correctness or otherwise of the order passed by the first appellate authority dated 16.5.1997, setting aside the order of Asst Commissioner (Adjudicating Authority) it may not be open for the revenue to contend that the adjudicating authority was justified in issuing the impugned show cause notices and also the further confirmation of said notices vide orders passed by the adjudicating authority, the appellate authority and the Tribunal. Therefore, revenue would not be entitled for any relief Appeal dismissed.

Summary

Issues:
1. Classification of the product under Chapter Sub-heading 4407.10 of the Central Excise Tariff Act, 1985.
2. Discrepancy in levying duty rate on the product.
3. Show cause notices issued by the revenue for payment of differential duty.
4. Appeal against the show cause notices and subsequent orders.
5. Challenge to the Tribunal's decision by the revenue.
6. Question of relief for the revenue based on the appellate authority's previous order.

Classification of the product under Chapter Sub-heading 4407.10:
The case involved the classification of 'Tikki Exjo Filler' obtained through the bituminization process under Chapter Sub-heading 4407.10 of the Act. The assessee claimed the product should be classified at nil rate of duty, arguing no manufacturing was involved. The adjudicating authority initially classified the product under Chapter Sub-heading 4407.10, levying a 10% duty rate, considering the process as manufacturing. The first appellate authority later accepted the assessee's stance, classifying the product at nil rate of duty, a decision that became final.

Discrepancy in levying duty rate:
The revenue issued show cause notices demanding payment of differential duty at 10% for the product under Chapter heading 4407.10. The assessee contended the product should be classified at nil rate, as the Insulation Board and Bitulux Insulation Board were the same. The adjudicating authority confirmed the show cause notices, but the first appellate authority set them aside based on the previous order classifying the product at nil rate.

Show cause notices and appeal:
The assessee appealed the show cause notices, which were set aside by the first appellate authority, leading to a subsequent appeal by the revenue. The Tribunal rejected the revenue's appeal, upholding the first appellate authority's decision. The revenue did not challenge the first appellate authority's findings, which deemed the product identical to the Insulation Board and not involving manufacturing activity.

Relief for the revenue:
As the revenue did not contest the first appellate authority's order, which set aside the classification of the product as manufacturing, the Supreme Court held that the revenue was not entitled to any relief. Consequently, the appeals were dismissed, as the order considering the process as manufacturing had been overturned by the first appellate authority.

Conclusion:
The Supreme Court dismissed the appeals, maintaining the classification of the product at nil rate of duty and emphasizing that the revenue could not seek relief without contesting the first appellate authority's decision. The decision in the related appeal was also dismissed in line with the main judgment.