Judgment

S. RANGANATHAN, J.

(1) THE respondent manufactures electrical insulation tapes. According to the respondent, the goods manufactured by it fall under tariff heading 85.47 of the schedule to the central Excise Tariff Act, 1985. On the other hand, according to the petitioner, the goods fall under heading 39.19 of the same schedule. The Assistant Collector of central Excise, therefore, gave notice to the respondent to show cause why the product should not be classified under heading 39.19. The assessee, in reply, pointed out that, in respect of its factory at Borivili, its claim that the goods were classifiable under heading 85.46 and that heading 39.19 had no application had been accepted by the Collector of central Excise (Appeals). The Assistant Collector, however, did not accept the assessees contention. He distinguished the order in respect of the Borivili plant on the ground that, there, the assessees claim was for classification under heading 85.46 and not 85.47. He held, by his order dated 4/01/1988, that the products in question fell under heading 39.19.

(2) THE assessee preferred an appeal to the Collector (Appeals), who set aside the order of the Assistant Collector. He observed that reason given by the Assistant Collector for not following the order of the Collector of central Excise (Appeals) on which the assessee had placed reliance before him was totally untenable. He set aside the order appealed against and directed the Assistant Collector to pass a reasoned and speaking order.

(3) WHEN the matter thus went back to the Assistant Collector he passed an order on 12/05/1989, reiterating the conclusion that had been reached by his predecessor. He also did not give any reasons as to why the order of the Collector (Appeals) in respect of the Borivili plant was not followed. Not only this, the assessee had placed before him a a decision of the central Excise and Gold Control Appellate tribunal (the tribunal) in the case of Chetna Polycoats (P) Ltd.\ to a similar effect. The Assistant Collector distinguished it observing that the said decision had not been agreed to by the department which had filed an appeal to the Supreme court therefrom. The second order passed by the Assistant Collector was practically a repetition of the earlier order.

(4) THE assessee thereupon filed a writ petition in the Bombay High court. The High court quashed the order of the Assistant Collector and directed the department to allocate the matter to a competent officer to pass a proper order. The Union of India has preferred this appeal. The learned Additional Solicitor-General, appearing for the Union, fairly concedes that so far as the merits are concerned, the department can have no grievance, since the High court has only set aside the order of the Assistant Collector and remanded the matter back for a proper consideration and a proper order. We are, therefore, not called upon to enter into the merits of the classification in the present case except to observe that the decision of the tribunal in the case of Chetna Polycoats (P) Ltd was the subject matter of civil no. 2321 of 1989 preferred by the department which was dismissed at the stage of admission by this court on 13/02/1991.

(5) THE learned Additional Solicitor-General, however, submits that the learned Judges have erred in passing severe strictures against the two Assistant Collectors who had dealt with the matter. He submitted that these officers had given reasons for classifying the goods under heading 39.19 and not 85.46 and could do no more. He submitted that they acted bona fide in the interests of Revenue in not accepting a claim which, they felt, was not tenable.

(6) SRI Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri