Approved excise classification list cannot be reopened retrospectively; later reclassification does not create a prior short levy.

An approved excise classification list remains operative until it is validly modified, and duty assessed on that basis is the correct levy for the period of approval. Rule 10 cannot be used to reopen the approved classification retrospectively or to treat a later reclassification as a prior short levy recoverable for the earlier period. Reopening of the classification must be done under the provision governing modification of classification lists, not through the recovery rule. The later contrary three-Judge view was held not to state the law correctly, and the earlier period's differential duty demand was unsustainable.

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Issues: Whether duty based on an approved classification list could be reopened retrospectively by treating the subsequent reclassification as a short levy recoverable under Rule 10, and whether the earlier view that reclassification would operate only prospectively from the show cause notice was correct.

Analysis: Rule 173B governs approval and modification of classification lists, and the levy made on the basis of an approved classification list is the correct levy until the approval is challenged and modified. Rule 10 is a recovery provision for duties not levied, not paid, or short-levied, and it does not deal with reopening of approved classification lists. Differential duty cannot therefore be recovered on the footing that the original levy was a short levy merely because the classification was later altered. The earlier three-Judge view that had treated the matter differently was held not to lay down the law correctly, while the contrary view was accepted as stating the correct legal position.

Conclusion: The demand for differential duty for the prior period was not sustainable under Rule 10, and the appeal by the Excise authorities failed.

Final Conclusion: An approved classification list remains operative until it is validly modified, and a subsequent reclassification does not by itself create a recoverable short levy for the earlier period.

Ratio Decidendi: Where excise duty is assessed on the basis of an approved classification list, the levy is not a short levy for the earlier period, and Rule 10 cannot be used to recover differential duty retrospectively; reopening of the classification must occur under the provision governing classification list modification.

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