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Judgment
K.A. Swami, C.J.—This appeal is preferred against the order dated 14.2.1995 passed in W.M.P. No. 32159/94 filed in W.P. No.
21140/94, vacating the interim order passed on 7.2.1995. This is a case, in which there is an order passed by the Appellate Collector, allowing the
case of the appellant, that the goods manufactured by the appellant would fall within the purview of heading 5502 and not within the classification
under heading 5606, as contended by the department. Thus the case of the petitioner that the goods manufactured by it would fall within the
heading 5502 has been accepted. It is true that the department has gone on appeal before the CEGAT, as it feels aggrieved as to the classification
accepted by the Appellate Collector that the goods manufactured by the appellant, fall under the heading 5502 is not correct and according to
them they fall under the heading 5506. The petitioner/appellant has also gone on appeal, it is not known on what basis the appellant could have
gone on appeal because even though its case has been accepted by the Appellate Collector. In the meanwhile, on the basis of the Appellate
Collector''s order, the department has issued the show-cause notice and made adjudication and thereafter raised a demand, demanding the
difference of the amount as per the spot memo, dated 30.11.1994 and also communication in O.C. No. 1480/94 dated 5.12.1994 (produced at
pages 157 and 159 of the typed set of papers furnished). But strangely enough, the appellant has also approached this Court in W.P. No.
21140/94 for quashing the order dated 9.11.1994 passed by the Appellate Collector in Appeal No. 80/94 (MDU), which has ended in favour of
the appellant. Further the appellant has also sought for quashing the spot memo, dated 30.11.1994 and also another communication in O.C. No.
1480/94 dated 5.12.1994, issued by the Superintendent of Central Excise, Ambasamudram I Range. The demand made by the department
against the appellant demanding the difference in the amount, has been arrived at on the basis of the classification under heading 5502. Therefore,
there cannot be any grievance on the part of the appellant. However, it is contended before us that as the very classification is under consideration
in the appeal preferred before the CEGAT, by the department as well as by the appellant, the recovery of the so-called difference cannot be
proceeded with. In support of this contention, the learned Senior Counsel Mr. S. Govindaswaminathan, has placed reliance on the department''s
circular issued under C.B.E. C. Circular 1/90-AU dated 19.3.1990 and also a decision of this Court reported in Eff Aar Fabrications Vs. Union of
India, .
As far as the circular is concerned, it only prohibits the department to claim duty on higher value. In the instant case, the department is not
claiming duty on the higher value on the basis that the goods manufactured by the appellant falls under the heading 5506, but on the basis that the
goods fall under the heading 5502, as claimed by the appellant and as held by the Appellate Collector. Therefore, the action taken by the
respondents cannot be held to be contrary to the circular CBEC-1/90 dated 19.3.1990.
As far as the decision of this Court in Eff Aar Fabricator''s case is concerned, to which one of us (Raju, J.) was a party, it has been held in that
case that the department cannot proceed to recover the amount on the basis of the claim made by it, when the matter is pending in appeal. The
said decision is in conformity with the circular dated 19.3.1990. Whereas in the instant case, the amount demanded by the department is not on the
higher value, but the value is as made by the appellant itself. In other words, the department has claimed the differential amount, as per the
classification claimed by the appellant. Hence, we are of the view that the learned single Judge is justified in vacating the interim order dated
7.2.1995. Hence, we see no ground to entertain the appeal and it is accordingly dismissed.