Tariff classification of Ultramarine Blue and limits on reopening approved assessments when facts and law remain unchanged.

Ultramarine Blue in small retail packs was analysed for tariff classification under competing excise headings, with the text explaining that packing size does not alter the product's intrinsic character. The discussion treats Heading 32.12 as covering pigments and colouring matter in the nature of dyes for domestic or laboratory use, while Ultramarine Blue is described as not being a pigment and therefore outside that entry. It also states that an earlier approved classification cannot be reopened on a mere change of opinion where there is no change in facts, law, or tariff position, and that an administrative circular cannot override the legal classification already settled.

---

---

Issues: (i) Whether Ultramarine Blue in small retail packs was classifiable under Heading 3212.90 or under Heading 3206.90 of the Central Excise Tariff Act, 1985. (ii) Whether the respondents had jurisdiction to re-classify the goods and reopen the earlier approved classification in the absence of any change in facts or law.

Issue (i): Whether Ultramarine Blue in small retail packs was classifiable under Heading 3212.90 or under Heading 3206.90 of the Central Excise Tariff Act, 1985.

Analysis: Heading 32.12 was construed as covering pigments and colouring matter in the nature of dyes put up in small packings for domestic or laboratory use. Ultramarine Blue had already been judicially recognised as not being a pigment, and the same commercial product did not acquire a different intrinsic character merely because it was packed in small retail packs. The tariff scheme, the chapter notes, and the harmonised system required the competing headings to be read as mutually exclusive. On that construction, Ultramarine Blue could not be brought under Heading 32.12 and, as it was not a pigment, it also did not fall under sub-heading 3206.10.

Conclusion: Ultramarine Blue was held classifiable under Heading 3206.90 and not under Heading 3212.90.

Issue (ii): Whether the respondents had jurisdiction to re-classify the goods and reopen the earlier approved classification in the absence of any change in facts or law.

Analysis: The earlier approved classification was a relevant fact and could not be ignored. Reassessment powers under the excise rules and Section 11A of the Central Excise Act, 1944 could not be used for a mere change of opinion on the same material. In the absence of any change in the goods, the law, or the tariff, the departmental circular and the Chief Chemist's opinion could not override the legal position already settled. An administrative circular cannot compel a contrary assessment where it conflicts with the law, and the officer cannot treat the same facts as a fresh basis for a different classification without cogent reason.

Conclusion: The attempted re-classification and reopening were held to be without jurisdiction and unsustainable.

Final Conclusion: The show cause notice was quashed, and it was declared that Ultramarine Blue is taxable only under Heading 3206.90.

Ratio Decidendi: Where the intrinsic nature of goods remains unchanged, the department cannot re-classify them on a mere change of opinion or on the strength of a contrary administrative circular; reassessment is permissible only when there is a change in facts, law, or tariff position.

---