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TMI Blog2014 (12) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities have merely carried out the directions of this Tribunal to re-calculate the duty and in the absence of any challenge to such re-calculation by the appellant, the present appeal is liable to rejected and we hold accordingly. Tribunal set aside the final assessment done by the lower authorities and directed the assessing officer to undertake re-assessment as per the classification decided by the Tribunal and to re-compute the differential duty liability. Thus the remand order passed by the Tribunal restored the provisional assessment resorted to earlier by setting aside the final assessment order and it is in pursuance of the said remand order, the jurisdictional Dy. Commissioner passed the re-assessment order and confirmed the differential duty liability. - amount of duty demand confirmed is much less than the amount specified in the show cause notice issued for finalization of provisional assessment. In the notice dated 1-3-98 which was issued for finalization of provisional assessment, the differential duty sought to be recovered was ₹ 37.05 Crore approx whereas in the final assessment order, the demand confirmed is only ₹ 5,30,86,840/- which is much les ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the adjudicating authority also filed an appeal before the lower appellate authority. The lower appellate authority vide order dated 30-9-1999 set aside the classification ordered by the adjudicating authority and allowed the benefit of notification 155/86-CE and also rejected the appeal filed by the Commissioner. In respect of the subsequent period, the Asst. Commissioner again followed his earlier order which on appeal was allowed by the lower appellate authority vide order dated 14-2-2000. Revenue filed appeals against both the orders of the lower appellate authority before this Tribunal. This Tribunal vide order dated 22-1-2009 held that the product in question is not a heat pump as claimed by the appellant and therefore, not eligible for the benefit of notification 155/86. The tribunal further held that the product is a complete machine in itself and not part of a machine. Since the demands were raised on the basis of rates applicable to parts of refrigeration machine, the Tribunal remanded the matter to re-calculate the duty as per the rates applicable to refrigeration machine and also to examine whether the price realized by the appellants were cum-duty price or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the decision in the case of Warner Hindustan Ltd. [1999 (113) ELT 24 (SC)] wherein a classification dispute arose, regarding a product called 'Halls Ice Mint Tablets . In the said case the assessee sought classification under CETH 3003.30 as ayurvedic medicines while the department classified the product under CETH 3003.19 as patent or proprietory medicines. In appeal the Tribunal held the classification to be CETH 17.04 as confectionery. In appeal, the hon'ble Apex Court held that it is impermissible for the Tribunal to consider a case that is laid for the first time in appeal and allowed the appeal while holding that it shall be open to the excise authorities to issue show cause notice proposing classification under CETH 1704. (3) In the present case, the Tribunal has held that the product is classifiable as a complete air-conditioning and refrigeration machine and no opportunity was given to the appellant to prove their case that it is otherwise. Therefore, the revenue ought to have issued a show cause notice to the appellant seeking classification as a complete air-conditioning and refrigeration machine. Having failed to do that the impugned demand is not susta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required to confirm the demand following CESTAT's order in accordance with law and in law, the Dy. Commissioner cannot confirm the demand beyond 40% adv. in respect of the periods 91-92 and 92-93. In the present case the show cause notice dated 10-3-98 was issued under section 11A before finalization of provisional assessment and therefore, the said notice is bad in law. (6) In any case, the Tribunal does not have power to enhance the duty demand confirmed on the assessee. Reliance is placed on the decisions in the case of Pathikonda Balasubba Setty (1967) 65 ITR 252 (Mys) and Hukumchand Mills Ltd. vs. CIT [(1967) 63 ITR 232 (SC)] wherein it was held that the power of the Tribunal to pass such orders as it thinks fit include all powers (except the power of enhancement). In the light of the above submissions, it is prayed that the impugned orders be set aside and the appeal allowed. 4. The ld. Commissioner (AR) appearing for the Revenue strongly refutes the contentions raised on behalf of the appellant and submits as follows:- (a) It is a settled law that a provisional assessment retains its provisional character for every purpose as held by the hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of assessment is made. Therefore, there is no question of issuing a notice under section 11A when the assessments are provisional and when the assessment is sought to be finalized. The same ratio was followed by this Tribunal in the case of Indian Oil Corporation Ltd. [2010 (251) ELT 541] wherein it was held that provision of section 11A relating to recovery of short levy or penalty does not apply to provisional assessment. (c) The show cause notice dated 10-3-1998 has been issued under Rule 9B for finalization of provisional assessment and not under section 11A for recovery of any short levy or non-levy. Para 52 of the said notice clearly invokes the powers under Rule 9B of the Central Excise Rules, 1944 for finalization of the provisional assessment. In the assessment order issued in pursuance to the said notice also, it is clearly stated that the assessment is being finalized in terms of the said order. In view of the factual position as evident from the records, the appellant's contention that show cause notice has been issued earlier under section 11A is factually incorrect. (d) The amount of demand confirmed is not more than the amount demanded in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as heat pumps in the facts and circumstances of this case. Hence the benefit of the notifications applicable to heat pumps during the relevant period will not be available to the assessee. 26. We have now to see whether these MVACs can be treated as parts or components of refrigeration/air-conditioning machinery as claimed by the revenue or otherwise. We find that in a somewhat similar situation in the case of Air-con Ltd. [2001 (128) ELT 485], this Tribunal was dealing with the classification of chillers - whether under heading 84.18 as claimed by the assessee or under heading 84.15 as parts of air-conditioning system as contended by the Revenue. The Tribunal held that end use of 'chillers' in the air-conditioning system would not take away the primary or basic function of the chillers which is to produce chilled water by using a refrigeration circuit and the same shall fall under chapter heading 84.18 of the Central Excise Tariff Act. This decision of the tribunal has been upheld by the hon'ble Apex Court as reported in 2006 (199) ELT 577 (SC). The hon'ble apex court found that the main function of the air-conditioning system is to control temperature, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to re-open the issue of classification. Therefore, the appellant's contention that show cause notice should have been issued for the proposed classification and the appellant should have been heard once again is clearly unsustainable and has to be rejected outright. 5.3 It is true that the appellant has challenged the above order of this Tribunal before the hon'ble Apex Court which is said to have been admitted and pending. However, the appellant has not been able to obtain any stay against the said order. Thus the classification, as laid down by the Tribunal in the said order dated 22-1-2009 shall prevail unless and until it is set aside by the hon'ble Apex Court. Further in the said order, the Tribunal has considered the submissions made by the appellant in support of classification as a heat pump and its claim for benefit under notification 155/86. After considering all the relevant aspects, namely, the product's functions and its usage, technical literature, HSN Explanatory Notes, various Tribunal and Apex Court decisions relevant to the classification the product, the Tribunal has recorded a detailed finding and has classified the product. Therefore, it ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the broad resemblance to another case is not at all decisive. In both the above cases relied upon by the appellant, the issue therein did not relate to finalization of a provisional assessment which was under challenge before the Tribunal. Further in those cases, the Tribunal also did not give any specific directions as to how the finalization of the provisional assessment should be done. Thus the facts involved in those cases are different and distinguishable. Therefore, following the ratio of the decision of the apex court in the Alnoori Tobacco case (supra), it has to be held that the ratio of the decisions in the Hindustan Polymer and Warner Hindustan case is not applicable. 5.5 As regards the reliance placed by the appellant in the Mafatlal Industries case, in para 95 of the said decision, the hon'ble apex court had, inter alia, held as follows: 95. Any recoveries or refunds consequent upon the adjustment under sub-rule (5) of Rule 9B will not be governed by Section 11A or Section 11B, as the case may be. However, if the final orders passed under sub-rule (5) are appealed against - or questioned in a writ petition or suit, as the case may be, assu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovides for a penal provision. Before a penalty can be levied, the procedures laid down therein must be complied with. For construction of a penal provision, it is trite, the golden rule of literal interpretation should be applied. The difficulty which may be faced by the Revenue is of no consequence. The power under Section 11-A of the Act can be invoked only when a duty has not been levied or paid or has been short-levied or short-paid. Such a proceeding can be initiated within six months from the relevant date which in terms of Sub-section (3)(ii)(b) of Section 11-A of the Act (which is applicable in the instant case) in a case where duty of excise is provisionally assessed under the Act or the Rules made thereunder, the date of adjustment of duty after the final assessment thereof. A proceeding under Section 11-A of the Act cannot, therefore, be initiated without completing the assessment proceedings. The hon'ble Delhi High Court re-iterated the above view in the case of ITC Limited [2010 (250) ELT 189 and further held that- 12.6 (i) ...................................................... .............................................................. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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