2015 (12) TMI 741 - SC - Central Excise

Classification of Vacuum Brake Hose Pipe - Classification under Tariff Heading 4009.92 or under Tariff Heading 4009.99 - Bar of limitation - Held that - view taken by the High Court is unsustainable on two grounds. In the first instance, writ petition itself was not maintainable when there was alternate remedy available to the assessee under the provisions of the Central Excise Tariff Act and the assessee should have exhausted those statutory appeals. Even otherwise, on merits, the High Court has allowed the writ petition wrongly. The High Court has glossed over the vital fact that the order of Collector (Appeals) in the first round of litigation was not accepted by the Department but was challenged. This plea did not fail on merit but appeal was dismissed by the Tribunal as time barred. Therefore, at the most, the said order of the Collector (Appeals) attained finality insofar as period covered by the earlier show cause notice is concerned and could not have been binding precedent for future period. - Impugned order is unsustainable - Decided in favour of Revenue.

Summary

Issues:
Classification of goods under Tariff Heading 4009.92 or 4009.99 of the Central Excise Tariff Act, 1985; Maintainability of writ petition when statutory appeals available; Binding precedent of Collector (Appeals) order.

Classification of Goods:
The appeals revolved around the classification of goods known as "Vacuum Brake Hose Pipe." The Revenue argued for classification under Tariff Heading 4009.92, while the assessee contended for classification under Tariff Heading 4009.99. The initial show cause notice in Civil Appeal No.1644/2008 led to the Adjudicating Authority classifying the goods under Tariff Heading 4009.92. The assessee appealed to the Collector (Appeals), where their plea for classification under Tariff Heading 4009.99 was accepted. However, the Department challenged this decision before the Tribunal, which dismissed the appeal as time-barred, without considering the merits.

Maintainability of Writ Petition:
Subsequently, another show cause notice was issued by the Revenue in 1992, classifying the goods under Tariff Heading 4009.92. Instead of appealing to the Collector (Appeals), the assessee filed a writ petition in the High Court of Bombay, which was allowed based on the argument that the Collector (Appeals) decision from the previous litigation was binding on the Adjudicating Authority. The court found the writ petition maintainable due to the previous decision.

Binding Precedent of Collector (Appeals) Order:
The High Court's decision was challenged on the grounds that the writ petition was not maintainable when statutory appeals were available under the Central Excise Tariff Act. The High Court's judgment was deemed incorrect as it failed to acknowledge that the Department had challenged the Collector (Appeals) decision from the first round of litigation. The Tribunal had dismissed the appeal on grounds of being time-barred, not on merit. Therefore, the Collector (Appeals) decision only held finality for the period covered by the earlier show cause notice and could not serve as a binding precedent for future periods.

Conclusion:
The Supreme Court allowed the appeals, overturning the High Court's orders. It was emphasized that the assessee should have pursued statutory appeals available under the Act instead of opting for a writ petition. The decision clarified that the Collector (Appeals) order from the previous litigation did not establish a binding precedent for subsequent periods. The respondent/assessee was given the opportunity to file statutory appeals challenging the orders previously contested in the High Court.