Existing excise assessment cannot be ignored; duty relief for inputs survives an intermediate bleaching stage in soap manufacture.

An excise authority could not disregard an existing classification and assessment of an input made by the competent jurisdictional authority at the factory of origin; any correction had to be pursued through lawful proceedings by the proper authority with notice and opportunity. On that basis, the Tribunal held that the duty-paid input used in soap manufacture remained eligible for Notification No. 201/79 even though it underwent bleaching as an intermediate stage, because the intermediate process did not defeat the notification's benefit. The appellate order was therefore sustained and the duty demand did not survive.

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Issues: (i) Whether the Assistant Collector in charge of the respondents' factory had jurisdiction to ignore the existing classification and assessment of the input and to proceed on the basis that it fell under a different tariff item. (ii) Whether Notification No. 201/79 dated 04-06-1979 was available where duty-paid input used in the manufacture of soap underwent bleaching as an intermediate stage before use.

Issue (i): Whether the Assistant Collector in charge of the respondents' factory had jurisdiction to ignore the existing classification and assessment of the input and to proceed on the basis that it fell under a different tariff item.

Analysis: Jurisdiction was held to go to the root of the matter. The input had already been classified and assessed by the competent excise authorities in charge of the factories where it was produced, and that assessment had not been altered in proceedings known to law. The Assistant Collector in charge of the respondents' factory could not unilaterally reopen or revise that classification and assessment. Any correction of an erroneous assessment had to be made only by competent authority in appropriate proceedings with due notice and opportunity.

Conclusion: The Assistant Collector lacked jurisdiction and competence to disregard the existing assessment and reclassify the input for the purpose of demanding duty from the respondents.

Issue (ii): Whether Notification No. 201/79 dated 04-06-1979 was available where duty-paid input used in the manufacture of soap underwent bleaching as an intermediate stage before use.

Analysis: Once the existing assessment of the input was treated as operative, the notification applied on its terms. The Tribunal's earlier rulings recognised that an intermediate exempt stage does not by itself defeat the benefit of such a notification, and the process need not involve direct use of the input in the finished product. The bleaching stage did not prevent the input from being regarded as used in the manufacture of soap for the purpose of the notification.

Conclusion: Notification No. 201/79 was applicable, and the respondents were entitled to the benefit of duty relief.

Final Conclusion: The appellate order was sustained, and the demand against the respondents did not survive.

Ratio Decidendi: An excise authority cannot ignore an existing assessment made by the competent jurisdictional authority and must proceed on that basis unless the assessment is lawfully altered; a notification granting input-duty relief is not defeated merely because the input passes through an unavoidable intermediate stage in manufacture.

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