Customs, Excise and Gold Tribunal - Delhi
Collector Of C. Ex. vs Kasturi Food And Chemicals on 28 March, 1995
Equivalent citations: 2003(159)ELT271(TRI-DEL)
ORDER P.K. Kapoor, Member (T)
1. This is an appeal filed by the Revenue against the order dated 29-2-88 passed by the Collector of Central Excise (Appeals), Madras.
2. Briefly started the facts of the case are that the appellants filed a classification list No. 5/86 effective from 1st March, 86 and another No. 6/85-86 effective from 13-3-86 claiming Pharma Yeast as non-excisable. The said classification lists were approved modifying the rate of duty at 12% ad valorem. The Range Officer issued a show cause notice to the assessee asking them to show cause as to why duty amounting to Rs. 8,448/- being the duty on 4,400 kgs. Pharma Yeast cleared during the period from April, 86 to September, 86 should not be demanded under Section 11A of the Central Excises and Salt Act. The assessee paid the duty under protest on 31-10-86 and submitted a representation dated 21-1-87 claiming that Chapter 21 of the Tariff did not cover Yeast put up as medicament. On this ground they prayed that the amount of duty paid by them under protest may be refunded. The Assistant Collector held that the classification lists effective from 1-3-86 and 13-3-86 were approved after modification to show the rate of duty leviable on Pharma Yeast as 12% ad valorem and during the period 1-4-86 to 4-4-86 the assessee cleared the goods without payment of duty and subsequently they paid duty under protest. On 31st October, 1986 another classification list filed by the assessee claiming Pharma Yeast as medicament as classifiable under sub-heading 3003.30 was approved. However, the duty paid by the assessee against earlier classification list against which no appeal had been filed was held as not refundable. Being aggrieved by the order passed by the Assistant Collector the assessee filed an appeal before the Collector (Appeals) who held that the classification of the product in question having been finally approved under heading 3003.30 it was not necessary for the assessee to file an appeal against the earlier incorrect order and therefore the amounts paid under protest. In excess of their liability could not be withheld in terms of Section 11B. He, therefore, allowed the appeal arid directed the Assistant Collector to sanction the refund.
3. Being aggrieved by the order passed by the Collector (Appeals) the Revenue has filed the present appeal. It has been contended that the respondents had correctly paid the duty in terms of an approved classification list and approval granted to any subsequent classification list would not effect only prospectively. It has been contended that the observation that the classification list had been approved finally under heading 3003.30 was not correct since in a similar case the approval under the said heading had been challenged by the Assistant Collector in appeal before the Collector, Central Excise (Appeals) vide his letter dated 29-1-88. It has been contended that classification of the goods under sub-heading 3003.30 was erroneous since Pharma Yeast was correctly classifiable under sub-heading 2102.10. On the grounds that approval granted to a classification list takes effect only prospectively and duty paid in terms of an approved classification list cannot be withdrawn through a refund claim, the appellants have prayed that the order passed by the Collector (Appeals) directing the Assistant Collector to sanction the refund may be set aside.
4. On behalf of the Revenue, Shri Sharad Bhansali, learned SDR submitted that the impugned order passed by the Collector (Appeals) was erroneous since duty paid in terms of an approved classification list which is not contested in appeal could not be claimed by the respondents by way of refund. He added that subsequent approval of classification list under subheading 3003.30 could have only prospective effect. He submitted that the approval of classification of the product under sub-heading 3003.30 challenged in appeal by the Department in another case. He also pointed out that by the Final Order No. 368/94-C, dated 9-12-94 in the respondents own case the product in question had been held as correctly classifiable under sub-heading 2102.10. On these grounds he pleaded that the impugned order may be set aside.
5. Since in their letter dated 8-2-95 the respondents have requested that the decision in the matter may be arrived on merits, we proceed to decide the appeal on the basis of the submissions made before us and the facts available in the records of the case. In this regard we find that in the case of Herschel Rubber (Pvt.) Ltd. v. Collector of Central Excise, Calcutta reported in 1987 (30) E.L.T. 454, the Tribunal has held that when a classification list filed in terms of Rule 173B is finally approved resulting in the determination of the classification of any goods prior to their assessment, such quasi-judicial determination cannot be re-opened or reviewed by the same authority and therefore an assessee who does not agree with a decision on a classification list has to challenge it directly by appealing against it and not indirectly by filing a refund claim. Paras 6(g)(i) to (I) of the said decision being relevant are reproduced below : -
"(i) for the reasons set forth by me in extenso in the decisions reported in 1984 (16) E.L.T. 389 (Tribunal) Entremonde Polycoaters Pvt. Ltd. v. Collector of Central Excise, Pune and 1985 (22) E.L.T. 795 (Rainbow Industries v. Collector of Central Excises), I am unable to persuade myself to hold that where the classification or assessable value had been determined prior to any assessment whatsoever in the context of Rules 173B & C, such quasi-judicial determination can be reopened or reviewed by the self same authority. Since they are not in any view of the matter order resulting in short-levy or non-levy;
(j) nor can a completed assessment be reopened on account of inadvertence, error or misconstruction when the assessment had become final not having been appealed against. A final order of assessment and a refund order inconsistent....... came co-exist;
(k) on a difference between two of us, the Hon'ble President had occasion to deal with the aforesaid issues in Appeal Nos. E/124/76-A, E/2450 -2460/63-A (Modi Rayon and Silk Mills, Modi Nagar v. Collector of Central Excise, Meerut), It was categorically held by him that an assessee, who does not agree with the decision on a classification list or a price list can challenge it directly by appealing against that decision and not indirectly by filing a refund claim on an assessment based on that decision;
(1) agreeing with him in the aforesaid view it had necessarily to be held that the application for refund in the instant appeal cannot sustain, the assessments having become final."
6. It is seen that the impugned order directs the Assistant Collector to sanction the refund of duty which was claimed on the grounds that the disputed goods were assessable under sub-heading 3003.30 and not under sub-heading 2102.10 as per the relevant approved classification list. Since according to the approved classification list which the disputed product was classifiable under sub-heading 2102.10 during the relevant period and such approval was not challenged in appeal, on the ratio of the decision of the Tribunal extracted above, it has to be held that the impugned order is not sustainable. He, therefore, set aside the impugned order and allow the appeal.