Judgment:
1. Appellants filed this appeal against the order-in-appeal passed by the Commissioner (Appeals).
2. Brief facts of the case are that the appellants are engaged in the manufacture of M.S. wire shelves and crisper baskets and were claiming the classification under heading 7326.20 of Central Excise Tariff. Show cause notice was issued on 31-7-95 for re-classifying the goods, in question, under heading 8418 of the Central Excise Tariff and also demanding duty. The adjudicating authority confirmed the classification & demand as proposed in the show cause notice. Appellants filed the appeal and the Commissioner (Appeals) remanded the matter to the adjudicating authority for deciding the claim of the appellants under Notification No. 75/87-C.E. The adjudicating authority held that as the appellants were availing the benefit of Modvat credit, the benefit of Notification No. 75/87 is not available to them. Appellants filed an appeal and the Commissioner (Appeals) allowed the benefit of notification No. 75/87-C.E. on the condition that the appellants can avail the benefit of notification No. 75/87-C.E. if they reverse the Modvat credit taken on the inputs and if the reversal is not possible, then the appellants have to pay the Modvat credit taken in cash and avail the benefit of small scale exemption notification.
4. The contention of the appellants is that the Commissioner (Appeals), while remanding the matter to the adjudicating authority, had not decided the issue of classification of the goods, in question. The claim of the appellants is that on merit, the goods are classifiable under heading 7326.20 of the Central Excise Tariff. The contention of the appellants is also that on remand, the adjudicating authority as well as the appellate authority, had not gone into the issue of classification, which is against the principles of natural justice.
Appellants were never heard on the issue of classification. Therefore, the impugned order is not sustainable.
5. The contention of the revenue is that against the first adjudication order, appellants filed an appeal and the Commissioner (Appeals), vide order dated 20-3-1998, remanded the matter to the adjudicating authority only for considering the issue in respect of the benefit of notification No. 75/87-CE. Appellants had not filed any appeal against the order-in-appeal dated 20-3-98. Therefore, now, the appellants cannot raise the issue of classification in the present proceedings.
6. In respect of the present impugned order, the contention of the revenue is that the benefit of notification No. 75/87-CE was allowed on the condition that the Modvat credit was to be reversed. When the appellants are claiming the benefit of small scale exemption notification, they are not entitled for the benefit of Modvat credit on the inputs used in the manufacture of specified goods.
7. We find that the Commissioner (Appeals), vide order dated 20-3-1998, remanded the matter with specific direction that the adjudicating authority to consider the claim of the appellants in respect of their eligibility to notification No. 75/87-C.E. The matter was remanded only on this limited issue. Appellants accepted this order by not filing any appeal. Therefore, we find no merit in the arguments of the appellants that they can agitate the issue of classification before the Tribunal at this stage.
8. In respect of benefit of notification No. 75/87-C.E., the Commissioner (Appeals), in the impugned order, allowed the benefit of notification No. 75/87-CE with the condition to reverse the Modvat credit taken by the appellants. As the appellants were claiming the benefit of small scale exemption notification, we find no infirmity in the impugned order in respect of the condition imposed by the Commissioner (Appeals) as the appellants are not entitled for the benefit of Modvat credit in respect of inputs used in the manufacture of their final product when they are claiming exemption from payment of excise duty under the small scale exemption notification.