Merger of classification orders means final appellate classification can apply from the filing date, not only prospectively.

Where classification is already under appellate challenge, the original classification order merges into the appellate determination, and the final appellate classification governs from the date the classification list was filed. The earlier approval by the Assistant Collector therefore does not continue to control the levy once the appellate authority has finally decided the issue. On that basis, the revised classification was held to take effect from the filing date rather than only prospectively, and the plea for prospective operation was rejected.

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Issues: Whether an appellate order passed on a review direction under Section 35E(2) of the Central Excises and Salt Act, 1944 operates prospectively or from the date of the original classification list.

Analysis: The classification of the product had already been put in issue before the competent appellate authority. In such a situation, the original classification order merged in the appellate order. Once the appellate authority finally decided the classification, the operative order was the appellate determination and not the earlier order of the Assistant Collector. The final appellate classification therefore related back to the date when the classification list was filed, and the earlier erroneous approval could not be treated as continuing to govern the levy.

Conclusion: The revised classification was held to operate from the date of the classification list, not merely prospectively. The plea for prospective operation was rejected.

Final Conclusion: The appeal failed and the Revenue's position on the retrospective effect of the appellate classification was sustained.

Ratio Decidendi: When classification is under appeal, the original order merges in the appellate order, and the final appellate classification operates from the date on which the classification list was filed.

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