Final exemption ruling on identical goods cannot be reopened for later periods without material change in facts or law

An earlier accepted exemption ruling on the same ready-to-eat edible preparations bound the department for a later period because the product line, exemption entry and manufacturing process remained unchanged. On those facts, the revenue could not reopen the identical exemption question merely due to an increase in the number of items, and the argument against perpetuating a wrong assessment did not override the earlier final order. The demand for duty, interest and consequential penalty therefore could not survive where there was no material change in facts or law.

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Issues: Whether the revenue could reopen, for a subsequent period, the entitlement of the assessee's ready-to-eat edible preparations to exemption under Notification No. 6/2002-C.E. when an identical exemption issue for an earlier period had already been decided in the assessee's favour and accepted by the department.

Analysis: The dispute concerned the same assessee, the same class of products, and an exemption entry that remained unchanged. The earlier adjudication had held the products to be covered by the exemption, and that order was neither challenged nor set aside. The products in the later period were found to be only an extension of the same product line, with no material change in the manufacturing process or the nature of the goods. In these circumstances, the department could not reopen the identical issue merely because the number of items had increased, and the plea against perpetuation of wrong assessment did not displace the binding effect of the earlier accepted order.

Conclusion: The revenue was precluded from reagitating the identical exemption issue, and the demand of duty, interest, and consequential penalty could not survive.

Ratio Decidendi: Where an identical exemption issue between the same parties for an earlier period has been finally decided and accepted by the revenue, the department cannot reopen the same issue for a subsequent period in the absence of a material change in facts or law.

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