Prospective classification change applies from receipt of show cause notice, with any recovery still subject to limitation.

A change in an approved classification list operates only prospectively from the date the show cause notice is received, not retrospectively from an earlier period. Where the revised classification itself is not disputed, the challenge may be confined to the effective date of change. Any recovery arising from the revised classification remains subject to the applicable limitation period. On the facts noted, the revised classification took effect only from 19-2-1987, the date of receipt of the notice, and the appeal succeeded to that extent.

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Issues: Whether the change in classification of the goods from the approved classification list could operate retrospectively or only prospectively from the date of receipt of the show cause notice.

Analysis: The approved classification list was sought to be altered by the Revenue through a show cause notice proposing a different classification. The appellants did not dispute the merits of the revised classification and confined the challenge to the date from which the change could take effect. The settled position applied was that a change in classification after approval operates only prospectively, while any recovery flowing from such change remains subject to limitation.

Conclusion: The change in classification became effective only from 19-2-1987, the date on which the show cause notice was received. The appeal succeeded to that extent.

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