Excise classification in trade parlance upheld, but revised duty could apply only after communication to the assessee.

For excise classification, the decisive test is trade parlance, and technical specifications may be used as relevant evidence to show that thrust washers, thrust half washers and wrapped bushes fall within thin walled bearings. On the facts, the departmental classification was upheld because the materials relied on showed the goods performing the same bearing function, and a different possible view was insufficient to dislodge the finding in writ jurisdiction. A revised duty position, however, cannot take effect before it is communicated to the assessee, so excise liability could operate only from 23 September 1978 and not from 7 August 1978.

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Issues: (i) whether thrust washers, thrust half washers and wrapped bushes manufactured by the assessee, though bearings, could be treated as thin walled bearings and made liable to excise duty under the relevant tariff item; (ii) whether the demand for duty could be sustained with effect from 7 August 1978 or could operate only from 23 September 1978.

Issue (i): whether thrust washers, thrust half washers and wrapped bushes manufactured by the assessee, though bearings, could be treated as thin walled bearings and made liable to excise duty under the relevant tariff item.

Analysis: Classification for excise purposes depends on the character of the goods as understood in trade parlance, and the burden lies on the department to establish the correct classification. The assessee produced no independent trade evidence, and the authorities relied on the Indian Standard specifications, which described thin walled bearings, thrust washers and wrapped bushes within the same functional scheme and showed that these articles were bearing liners used for similar purposes. Mere separation of the articles in different tables of the specification did not establish that they were outside the category of thin walled bearings. The finding of the authorities was not shown to be perverse, unreasonable or unsustainable, and a different possible view could not justify interference in writ jurisdiction.

Conclusion: The assessee's challenge on classification failed and the articles were rightly treated as thin walled bearings.

Issue (ii): whether the demand for duty could be sustained with effect from 7 August 1978 or could operate only from 23 September 1978.

Analysis: The liability arising from the administrative decision could not precede communication of that decision to the assessee. Since the revised position was communicated only on 23 September 1978, duty could not be demanded from 7 August 1978. The demand notice had therefore to be confined to clearances made after the date of communication. The limitation objection against the later demand under Section 11A was not accepted because that demand followed the adjudication on classification.

Conclusion: The assessee succeeded on the commencement date of liability, and duty could be demanded only from 23 September 1978 onwards.

Final Conclusion: The petition was allowed in part by upholding the classification of the goods as thin walled bearings, but restricting excise liability to clearances made from 23 September 1978 and setting aside the demand for the earlier period.

Ratio Decidendi: For excise classification, the decisive test is trade parlance and relevant technical specifications may be used as evidence, but a demand based on a revised classification cannot operate before the change is communicated to the assessee.

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