2000(03)LCX0063

IN THE CEGAT, SOUTH ZONAL BENCH, CHENNAI

S/Shri S.L. Peeran, Member (J) and V.K. Ashtana, Member (T)

SOUTHERN INDUSTRIAL CORPN. LTD.

Versus

COMMR. OF C. EX., CHENNAI

Final Order No. 396/2000, dated 22-3-2000 in Appeal No.E/3374/90-B1

CASE CITED

Commissioner v. Cotspun Ltd. — 1999(09)LCX0297 Eq 1999 (113) ELT 0353 (S.C.) — Followed ....................... [Para 2]

Advocated By :   Shri R. Raghavan, Advocate, for the Appellant.

Shri S. Kannan, DR, for the Respondent.

[Order per : S.L. Peeran, Member (J)]. - This appeal arises from Order-in-Appeal No. 196/90 (M) dated 27-6-90 passed by Commissioner (Appeals) confirming duty demand on revision of classification in respect of a product described as Speedometer Cable Assembly and Inner & Outer Cable Assembly w.e.f. 1-3-86, as a result of budgetary changes. The item had been classified under Heading 90.29. However, the department took a different stand and issued show cause notice on 8-7-88 seeking re-classification of the product under Heading 84.83 and as a result also seeking confirmation of short levy for the 6 months period prior to the issue of show cause notice, i.e. 8-1-88 to 8-7-88 for an amount of Rs. 1,13,534.21. Before the ld. Commissioner (Appeals), appellants did not challenge the re-classification of the item, but only contested on the confirmation of demands that 6 months period prior to the issue of show cause notice. They pleaded that in cases where there was a confirmed classification list, the revision of classification and the demands arising therefrom has to be only prospective and in this regard they had relied on large number of judgments. However, the same were not accepted by the Commissioner (Appeals) and proceeded to confirm the demands.

2. Ld. Advocate Shri Raghavan submits that the issue is no longer res integra and that the Apex Court by a Bench of 5 Hon’ble Judges in the case of CCE v. Cotspun Ltd. as reported in 1999(09)LCX0297 Eq 1999 (113) ELT 0353 (S.C.) have held that in cases where there is a changed view by revising the classification list which had already been approved, in such circumstances, the demands have to be only prospective from the date of show cause notice. He submits that in view of this Apex Court judgment, the plea they had raised before the Commissioner is required to be upheld in their favour and confirmation of short levy is required to be quashed.

3. Heard ld. DR Shri S. Kannan who reiterates the departmental view in the matter.

4. On a careful consideration of the submission, we notice from the grounds of appeal that the appellants have not challenged the revised classification adopted by the Department, but only have contested that the demands arising from revised classification has to be prospective and short levy cannot be levied for 6 months prior to the issue of show cause notice. In this regard they had relied on large number of judgment. However, the Commissioner (Appeals) going by the provisions of Section 11A as it stood held that 6 months levy prior to issue of show cause notice is confirmable. However, this matter was referred to a Larger Bench of the Apex Court and now that the Larger Bench has held that in a circumstance where there is a revision of classification by the Department, in such cases the confirmation of duty has to be only prospective. In that view of the matter, respectfully following the ratio of the Apex Court judgment, the confirmation of demands for 6 months prior to the issue of show cause notice is set aside by allowing the appeal with consequential relief, if any, as per law.

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Equivalent 2001 (137) ELT 1134 (Tri. - Chennai)