Approved classification lists limit short-levy demands; differential excise duty cannot be recovered without displacing the approved assessment basis.

Declared glass thickness was rejected where departmental measurements showed the seized goods were thicker than the 2.2 mm stated by the assessee, and the trade notice on nominal thickness did not alter that result. Machine performance reports signed by the glass technologist were treated as reliable evidence of actual production, so the figures recorded in those reports were accepted and the plea based on breakages failed. On limitation, the approved classification list controlled the assessment, and differential duty could not be recovered as a short levy merely because the approval was later questioned; the extended period was not available. The demand was therefore not sustainable on limitation.

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Issues: (i) whether the thickness of the glass, as measured by the department, could be adopted for duty and confiscation purposes; (ii) whether the quantity shown in the machine performance reports could be taken as the basis for computation of production; and (iii) whether the demand was barred by limitation in view of the approved classification list.

Issue (i): whether the thickness of the glass, as measured by the department, could be adopted for duty and confiscation purposes.

Analysis: The declared thickness of 2.2 mm was found to be lower than the thickness ascertained on actual measurement in the seized goods from the factory, godowns, trucks, branches, and dealers. The applicable trade notice on nominal thickness did not assist the appellants because even on that basis the goods were found to be of higher thickness than declared.

Conclusion: This issue was decided against the assessee.

Issue (ii): whether the quantity shown in the machine performance reports could be taken as the basis for computation of production.

Analysis: The machine performance reports were prepared and signed by the glass technologist, who confirmed that the entries reflected actual production of figured glass. In those circumstances, the reports were accepted as reliable for determining the quantity manufactured, and the plea based on breakages was not accepted.

Conclusion: This issue was decided against the assessee.

Issue (iii): whether the demand was barred by limitation in view of the approved classification list.

Analysis: The classification list had been approved and the duty had been assessed on that basis. Applying the law laid down by the Supreme Court on approved classification lists, differential duty could not be recovered as a short levy merely because the approval was later questioned, and the extended period was not available on the facts found.

Conclusion: This issue was decided in favour of the assessee.

Final Conclusion: The appeal succeeded on limitation, the demand could not be sustained as a short levy on the basis of the approved classification list, and the impugned order was set aside.

Ratio Decidendi: Differential excise duty cannot be recovered as a short levy where the assessment was made on the basis of an approved classification list, unless the approval is first validly questioned and displaced in law.

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