2017 (2) TMI 378 - AT - Central Excise

Classification - Synthetic Rubber Aprons and Cots - whether the product is classifiable under Chapter 4009.99 attracting nil rate of duty as claimed by the appellant or classifiable under Chapter Heading 4016.99 attracting duty at the rate of 15%? - Held that - the classification of goods in question is to be decided under Chapter heading between 4009.99 or 4016.99. Since both the lower authorities have decided the classification under 8448.00, they have not considered the possibility of classifying the goods under 4009.99 or 4016.99. Since classification is based on the facts of nature of goods, it will be appropriate in the interest of justice that the matter be reconsidered by the adjudicating authority - appeal allowed by way of remand.

Summary

Issues:
Classification of goods under Chapter Heading 4009.99 or 4016.99, impact of show cause notice proposal, remand direction from the Hon'ble Supreme Court.

Analysis:
The issue in question pertains to the classification of goods manufactured by the appellant, specifically Synthetic Rubber Aprons and Cots, under Chapter 4009.99 or 4016.99. The department raised this issue in a show cause notice, contending whether the goods should attract a nil rate of duty or duty at 15%. The adjudicating authority and the Commissioner (Appeals) classified the goods under Chapter Heading 8448.00, imposing a duty rate of 10%. The appellant challenged this classification, leading to a series of appeals culminating in a direction from the Hon'ble Supreme Court to determine the classification under Chapter Heading 4009.99 or 4016.99.

The appellant argued that since the classification under Chapter Heading 8448.00 was not proposed in the show cause notice, the goods cannot be classified under Chapter Heading 4009.99 or 4016.99. Citing relevant case law, the appellant contended that all proceedings based on the incorrect proposal in the show cause notice should be set aside. The Revenue, represented by the Joint Commissioner, reiterated the findings of the impugned order, emphasizing the classification under Chapter Heading 8448.00.

In compliance with the remand direction from the Hon'ble Supreme Court, the Tribunal revisited the issue. Referring to the Supreme Court's order, which highlighted the importance of the show cause notice as the foundation for duty classification, the Tribunal acknowledged that the classification under Chapter Heading 8448.00 could not be revisited due to the passage of time. Consequently, the Tribunal set aside the previous order and remanded the matter to the original adjudicating authority for a fresh decision on the classification of the goods under Chapter Heading 4009.99 or 4016.99. The appeals were allowed by way of remand, emphasizing the need for a reconsideration based on the Supreme Court's directions.

In conclusion, the Tribunal's decision, pronounced on 05/01/2017, underscored the significance of the show cause notice in duty classification matters and directed a reevaluation of the goods' classification under the relevant chapters, 4009.99 or 4016.99, by the adjudicating authority.