1994 (6) TMI 82 - AT - Central Excise

Tribunal Rectifies Classification Error, Nullifies Demand & Penalty; Duty Recoverable Under Correct Heading

The Tribunal rectified the error in its Final Order regarding the classification of Spent Sulphuric Acid under the Central Excise Tariff Act, 1985. It ... Rectification of mistake Issues:Rectification of error apparent on record in Tribunal's Final Order regarding classification of Spent Sulphuric Acid under Central Excise Tariff Act, 1985.Analysis:The judgment pertains to an application under Section 35C(2) of the Central Excises and Salt Act, 1944 seeking rectification of an error in the Tribunal's Final Order regarding the classification of Spent Sulphuric Acid. The appellant challenged the classification under Heading 28.07, contending that the demand confirmed by the lower authority was incorrect. The appellant also argued that they had informed the Department and cleared the goods at a nil rate of duty, thereby requesting the Tribunal to quash the demand and set aside the penalty. The Tribunal, in its order dated 19-4-1993, classified Spent Sulphuric Acid under Heading No. 38.23 instead of 28.07, effectively nullifying the basis for the demand. The appellant sought rectification of the order to address the demand and penalty issues left unaddressed by the Tribunal.On behalf of the respondents, it was argued that duty on Spent Sulphuric Acid should be recoverable under Heading No. 38.23 based on the Tribunal's classification. The respondents referenced a previous decision to support their stance. Regarding the penalty imposed, it was highlighted that the penalty was due to the appellant's claim of Modvat on Sulphuric Acid not used in the final product manufacturing. The respondents left the decision on setting aside the penalty to the Bench's discretion.The Tribunal, after considering both parties' submissions, clarified the rectification to be made in the order. It held that duty on the goods in question should be recoverable under Heading 38.23, overturning the classification under Heading 28.07. The Tribunal also set aside the penalty imposed on the appellants, modifying the original order accordingly. The judgment emphasized that once the Tribunal classifies goods differently from the lower authority, duty can be demanded based on the Tribunal's classification, as established in a previous case. The rectification order addressed the demand and penalty issues left unresolved in the initial order, providing a clear directive for the classification and penalty aspects of the case.