Approved classification lists bar short-levy demands where duty was assessed on that basis and notices are unsustainable.

Show cause notices under Section 11A of the Central Excise Act, 1944 demanding short levy were held unsustainable where the goods had been cleared in accordance with approved classification lists. Once the levy was accepted on the basis of such approved classification, there was no basis to allege short levy for the relevant periods. Applying the principle already recognised by the Supreme Court in duty-demand disputes founded on approved classification, the Court quashed the notices and decided the issue in favour of the assessee.

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Issues: Whether the show cause notices issued under Section 11A of the Central Excise Act, 1944 demanding short levy of excise duty in respect of goods cleared under approved classification lists were sustainable.

Analysis: The notices related to periods when the goods had been cleared in accordance with approved classification lists. The approved levy based on such classification lists was treated as the correct levy, and on that basis there could be no allegation of short levy. The Court held that the controversy was covered by the principle applied by the Supreme Court in relation to duty demands founded on approved classification.

Conclusion: The show cause notices could not be sustained and were liable to be quashed. The issue was decided in favour of the assessee.

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