Full Judgment
2. A demand for differential duty in respect of a consignment declared as "faucet handles" was issued to the appellants on the ground that the goods are classifiable under the then CTH 83.01/15(1) as against CTH 84.61. This classification was confirmed by Asstt. Collector, who also held that demand of duty issued to the appellants was payable.
3. The Ld. Consultant, arguing for the appellants, submits that while Collector (Appeals) set aside the order of Asstt. Collector in regard to demand, he has arrived at a different classification by holding that goods are classifiable under CTH 73.33/40(2). They are aggrieved by this classification.
4. Ld. D.R. submits that to the extent that demand has been set aside by the Collector (Appeals), they have no grievance about reference to proper classification made by Collector (Appeals). This was only by way of observation, since he too observed that no notice could be issued at that: stage to the appellants under 2nd proviso to Sub-section (3) of Section 128(A) of Customs Act, 1962.
5. We have heard both sides. The goods were originally classified under CTH 84.61. Subsequently, consequent to the initiation of proceedings for change of classification, goods were held to be classifiable under CTH 83.01/15(1) and demand was confirmed by Asstt. Collector. Collector (Appeals) observed that even the original classification of goods under Customs Tariff Act under heading 84.61 was erroneous since the goods imported are neither taps, nor cocks nor valves and hence, proper classification of these goods should have been under CTH 73.33/40(2), namely, other articles of stainless steel attracting duty @ 300 per cent. While making this observation, he himself hastened to add that no notice could be issued by Collector (Appeals) under 2nd proviso to Sub-section (3) of Section 128(A) of Customs Act, 1962, since the duty had been paid on 14.11.1984. With this observation Collector (Appeals) set aside the impugned order and allowed the appeal of the appellants.
5.1 It can, therefore, be seen that the appellants should have no grievance so far as the demand goes since the demand of duty has been set aside. We do not think Collector (Appeals) has arrived at any finding as such in this order in regard to classification since the himself has observed that considering the date the duty was paid, he cannot at that stage issue a notice under Section 128(A) of Customs Act.
5.2 Second proviso to Sub-section (3) of Section 128(A) provides that where Collector (Appeals) is of the opinion that any duty has not been levied or has been short-levied or erroneously refunded, no order requiring the appellants to pay any duty not levied or short levied or erroneously refunded shall be passed unless the appellant is given a notice within the time specified in Section 128(A) to show cause against the proposed order.
6. In this case, the duty was paid on 14.11.1984 and Collector (Appeals) order is dated 7.8.1990. In other words, Collector (Appeals) appears to have accepted the fact that even though classification under CTH 84.61 was erroneous, he could not at that stage issue a notice for recovery of duty that would be attracted if the revised classification is accepted.
7. In this view of the matter, therefore, the only conclusion that could be drawn is that the Collector (Appeals) has made only an observation about proper classification that ought to have been resorted to in this case. For, in absence of a Revenue Appeal or cross-objections, Collector (Appeals) obviously could not have arrived at a finding in regard to classification without putting the appellants on notice. It should, therefore, be clear that so far as the appellants are concerned, they can have no grievance since the demand has been set aside by the Collector (Appeals).
8. In this view of the matter, we have to hold that appeal is infructuous. We, therefore, dismiss the appeal as infructuous.