2015 (4) TMI 961 - SC - Central Excise

Classification of manufacturing of floating pontoons which it describes as Pantoon with spuds - Classification under 8905.00 or 8907.00 - Held that - Tribunal was not agreeing with the order of the Commissioner, the order of the Tribunal should have been a speaking order dealing with the reasoning given by the Commissioner and stating as to why the said reasoning was faulty. - issue as to whether the product is marketable or not was not even raised by the respondent in reply to the show cause notice nor was it argued before the Commissioner and therefore on that ground the Tribunal could not have allowed the appeal. - matter remanded back - Decided in favour of Revenue.

Summary

Issues: Classification of goods under Chapter Heading 8905.00 or 8907.00

In this case, the respondent company manufactures floating pontoons described as 'Pantoon with spuds' and claims that the goods should be classified under Chapter Heading 8905.00 attracting nil duty. However, the Department argues that the goods should be classified under Chapter Heading 8907.00, attracting duty at 20%. A show cause notice was issued, leading to an Order-in-Original by the Commissioner classifying the product under Chapter Heading 8907.00. The Tribunal, in its impugned order, allowed the appeal on the grounds that the product is not marketable and classified it under 8905.00 without providing detailed reasons. The Supreme Court noted that the Tribunal should have given a speaking order addressing the Commissioner's reasoning if it disagreed. The Court highlighted that the issue of marketability was not raised earlier and remitted the case back to the Tribunal for a decision on classification through a speaking order.

The judgment emphasizes the importance of providing detailed reasoning in tribunal orders, especially when disagreeing with the lower authority's decision. It underscores the necessity for parties to raise all relevant arguments at the appropriate stages of proceedings to ensure a fair and comprehensive adjudication. The Court's decision to remit the case back to the Tribunal demonstrates the significance of a thorough and reasoned decision-making process in matters of classification under excise duty laws.