1996 (10) TMI 100 - SC - Central Excise

Appeal allowed: tribunal exceeded authority by inventing flour-based classification and denying exemption on unraised basis

The SC allowed the appeal, holding the Tribunal erred by inventing a flour-based classification for the product and thereby making out a case for the ... Classification of a product named Robinson's Patent Barley - Food - exemption from excise duty under a notification issued under Rule 8(1) of the Central Excise Rules, 1944 - HELD THAT:- It was not in dispute that the said product fell under Item 1B. The Revenue contended that the said product fell outside the ambit of the exemption granted by the said notification because it was a product with a basis of starch. The Tribunal, however, having heard counsel, asked whether the product could not be called a preparation with a basis of flour and answered the question against the appellants; that is to say, the Tribunal held that the said product fell outside the ambit of the exemption because it was a preparation with a basis of flour. Having come to the conclusion that the said product was not a preparation based on starch, the Tribunal should have allowed the appeal. It was beyond the competence of the Tribunal to make out in favour of the Revenue a case which the Revenue had never canvassed and which the appellants had never been required to meet. It is upon this ground alone that the appeal must succeed. Appeal is allowed. Issues involved: The judgment deals with the classification of a product named Robinson's Patent Barley for the purpose of exemption from excise duty under a notification issued under Rule 8(1) of the Central Excise Rules, 1944.Classification of Robinson's Patent Barley: The Revenue contended that the product was a 'preparation with a basis of starch' and thus not eligible for the exemption. The Tribunal held that the product fell outside the exemption as it was considered a preparation with a basis of flour, not starch, contrary to the Revenue's argument. The Tribunal's decision was based on the interpretation of the exemption notification and the classification of the product.Competence of the Tribunal: The Tribunal was criticized for making a case in favor of the Revenue that was not originally presented, as the Revenue's case throughout had been based on the product being a preparation based on starch. The Tribunal's decision was overturned on the grounds that it exceeded its authority by introducing a new argument that the appellants were not required to address.Maintainability of the Appeal: The Supreme Court noted that a writ petition had been filed in the Calcutta High Court alongside the appeal, but the parties did not challenge the appeal's maintainability. The Court proceeded to hear the appeal on its merits and ultimately allowed the appeal, setting aside the Tribunal's judgment and order without imposing any costs.This summary highlights the key issues addressed in the judgment regarding the classification of Robinson's Patent Barley for excise duty exemption, the Tribunal's decision-making process, and the Supreme Court's ruling on the appeal's maintainability and final outcome.