Approved classification and price lists barred differential excise duty demand on the same clearances.

Clearances made on the basis of approved classification lists and approved price lists could not later be treated as undervalued for recovery of differential excise duty. Where the departmental authorities had already approved the basis on which the goods were cleared, the Department was not entitled to issue a show cause notice or sustain a short-levy demand on the same clearances. The adjudication was held unsustainable because the approved lists governed valuation and classification at the time of clearance, and the differential duty demand was set aside in favour of the assessee.

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Issues: Whether the demand of differential excise duty could be sustained when the clearances were made on the basis of approved classification lists and approved price lists.

Analysis: The clearances of the goods were made in accordance with classification and price lists approved by the departmental authorities under the relevant Central Excise Rules. Once such approvals governed the clearances, the Department could not treat the same clearances as involving undervaluation and recover differential duty on the footing of a short levy. The show cause notice and the consequential adjudication were therefore unsustainable.

Conclusion: The demand of differential duty was illegal and the adjudication order was set aside in favour of the assessee.

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