Binding effect of Development Commissioner permission bars excise demand over DTA sale clearance classification.

Where the competent Development Commissioner had permitted DTA sale bunching under the Export-Import Policy 1997-2002, the revenue could not ignore that determination and reopen the clearance issue in Central Excise proceedings on the ground that the goods fell under different H.S. codes or did not meet the six-digit code requirement. The court treated the Commissioner's decision as binding for the clearance question, noting that it had already been considered, including on the department's representation, and found no independent power in section 3(1) of the Central Excise Act, 1944 or rule 100A of the Central Excise Rules, 1944 to sit in appeal over that permission. The demand was therefore unsustainable.

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Issues: Whether the revenue could ignore the decision of the Development Commissioner permitting DTA sale bunching and raise duty demand on the footing that the goods cleared by the unit fell under different H.S. codes and did not satisfy the six-digit code requirement.

Analysis: The dispute turned on the scope of the Development Commissioner's authority under the Export-Import Policy 1997-2002 and whether the revenue could reopen that determination in proceedings under the Central Excise law. The Court noted that the Development Commissioner had already considered the matter, including on representation by the department, and had reiterated his stand. The Court also relied on the earlier view that once the competent authority had granted permission for DTA clearance, the revenue could not go beyond that permission to dispute the clearance value or the entitlement, and it found no independent power in Section 3(1) of the Central Excise Act, 1944 or Rule 100A of the Central Excise Rules, 1944 to do so.

Conclusion: The revenue could not go behind the Development Commissioner's decision, and the demand was not sustainable.

Final Conclusion: The appeal was held to be without merit and the order in favour of the assessee was left undisturbed.

Ratio Decidendi: Where a competent authority under the governing export policy has taken a considered decision permitting the clearance, the revenue cannot disregard or sit in appeal over that decision in separate excise proceedings unless the statute expressly confers such power.

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