2016 (2) TMI 103 - AT - Central Excise

Tribunal remands appeal for fresh adjudication on classification under Chapter Heading 72.14/72.16

The Tribunal allowed the appeal by remanding the matter back to the first appellate authority for reconsideration, emphasizing the need for a fresh ... Adjudication power - Classification - whether the product manufactured by respondent is 'rough forging', and merits classification under 73.26 as claimed by the respondent or 7207.10 as confirmed by the first appellate authority? - Held that:- The matter needs to be adjudicated by the first appellate authority inasmuch, the dispute of classification as put forth by the show-cause notice was whether the product would merit classification under Chapter Headings 73.26 or 72.14/72.16. The classification which has been arrived at by the first appellate authority in his impugned order is under Chapter Heading No. 7207. In our view the impugned order cannot travel beyond the show-cause notice and classifying the product under Chapter Heading No. 7207 seems to be incorrect. At the same time the findings of the adjudicating authority are contested before the first appellate authority. Hence in the interest of justice we find that the matter needs reconsideration by the first appellate authority. Without expressing any opinion on merits of the case, keeping all issues open, we set aside the impugned order and remand the matter back to the first appellate authority to reconsider the issue afresh following the principles of natural justice. Issues:Classification of product under Central Excise Tariff Act, 1985 - Dispute between Chapter Headings 73.26 or 72.14/72.16 - Correct classification under Chapter Heading No. 7207 - Appeal against Order-in-Appeal SVS/346/NGP-II/2006 dated 31.10.2006.Analysis:Issue 1: Classification of product under Central Excise Tariff Act, 1985The appeal pertains to the classification of products manufactured by the respondent under the Central Excise Tariff Act, 1985. The respondent, a manufacturer of Iron and Steel products, classified their product Rough Forging under Chapter Heading No. 7326 till 31.3.2004 and subsequently under Chapter Heading 7216 and 7214 from 01.04.2004. The Revenue issued a show-cause notice directing the respondent to justify the classification under Chapter Heading 7214. The adjudicating authority confirmed the demands raised with interest and penalties. However, the first appellate authority reversed this decision and allowed the appeal, leading to the current appeal by the Revenue.Issue 2: Dispute between Chapter Headings 73.26 or 72.14/72.16The main contention in the appeal revolves around whether the product manufactured by the respondent should be classified as 'rough forging' under Chapter Heading 73.26 as claimed by the respondent or under Chapter Heading 7207.10 as confirmed by the first appellate authority. The Revenue argued that the first appellate authority's emphasis on 'Open Forging' and references to Wikipedia articles were presumptuous and incorrect. The respondent, on the other hand, highlighted the manufacturing activity and purchase orders to support their classification under Chapter Heading 73.26.Issue 3: Correct classification under Chapter Heading No. 7207Upon review, the Tribunal found that the impugned order by the first appellate authority deviated from the show-cause notice, as it classified the product under Chapter Heading No. 7207, which was deemed incorrect. The Tribunal decided to remand the matter back to the first appellate authority for reconsideration, emphasizing the need for a fresh adjudication following the principles of natural justice. The respondent was granted the opportunity to present evidence supporting their claimed classification under 72.14/72.16 as alleged in the show-cause notice.In conclusion, the Tribunal allowed the appeal by way of remand, instructing the first appellate authority to reexamine the issue based on the allegations in the show-cause notice and the principles of natural justice, without expressing any opinion on the merits of the case.