Final classification under Chapter 47 barred duty demand and kept the assessee within SSI exemption limits.

The product was treated as classifiable under Chapter 47, matching the Tribunal's earlier final classification of the same product in the assessee's related matter, so the revenue could not reopen the classification dispute. On that basis, the clearances were not dutiable and the demand could not survive. In the alternative, exempt clearances of the related unit had to be excluded while computing aggregate turnover for SSI exemption, and the appellant's clearances remained within the limit under Notification No. 8/2003-Central Excise. The penalty and confiscation-related reliefs therefore also failed and the orders below were set aside in favour of the assessee.

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Issues: Whether the product manufactured by the assessee was classifiable under Chapter 47 so as to attract nil rate of duty, and whether the demand, penalty and allied consequential reliefs could survive.

Analysis: The product manufactured by the appellant was found to be identical to the product earlier considered by the Tribunal in the assessee's own related matter. That earlier view, holding the product classifiable under Chapter 47, had been accepted by the Department and had attained finality. On the facts recorded, both units used the same ingredients and produced the same resultant product. Once the product was treated as falling under Chapter 47, the clearances were not dutiable. Even on the alternative footing, the exempt clearances of the related unit had to be excluded while computing the aggregate turnover for SSI benefit, and the appellant's clearances remained within the exemption limit under Notification No. 8/2003-Central Excise.

Conclusion: The demand was not sustainable, the penalty and confiscation-related reliefs could not survive, and the orders below were liable to be set aside in favour of the assessee.

Ratio Decidendi: Where the same product has already been judicially classified under an exempt heading and that view has attained finality, the revenue cannot sustain duty demand by re-agitating classification, and exempt clearances of a related unit must be excluded while applying the SSI threshold.

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