COMMISSIONER OF CENTRAL EXCISE Vs. JAI FIBRES LTD.

JUDGEMENT

(1.) DURING the relevant period, the respondents were clearing HDPE bags by classifying the same under Heading 63.01 on payment of duty.

(2.) It is seen that the dispute about the said HDPE bags was going on in the industry for a long time and was ultimately settled by the Hon'ble High Court of Madhya Pradesh in the case of Raj Pack Well Ltd. v. Uoi as reported in 1990 (50) E.L.T. 201 holding that HDPE sacks are appropriately classifiable under Chapter 39. With the result, a circular was issued by the Board on 24 -9 -1992 laying down that henceforth the disputed items would be classifiable under Chapter 39. Thereafter the respondents classified the goods under Chapter 39.

(3.) HOWEVER , a show cause notice dated 4 -11 -1992 was issued to the respondents, raising demand of duty of Rs. 63,71,741/ - as basic excise duty and Rs. 9,53,936/ - as special excise duty in respect of the bags cleared by the respondents during the period 1 -44992 to 15 -10 -1992 on the alleged ground that the goods should have been classified under Heading 39.23. The said show cause notice culminated into an order passed by the original adjudicating authority vide which the demand was dropped on the ground that during the relevant period, classification list was duly approved by the proper officer. The appeal by the Revenue against the said order did not succeed before the Commissioner (Appeals), who rejected the same while observing that the classification cannot be amended retrospectively and no demand can be raised for the past period of six months. Reliance was placed upon the Hon'ble Supreme Court's decision in the case of H.M. Bags Manufacturer v. CCE - - The said order of the Commissioner (Appeals) is impugned before us by the department.