The amount of incoming e-mails is increasing rapidly due to the wide usage of Internet. Therefore, it is more required to classify incoming e-mails efficiently and accurately. Currently, the e-mail classification techniques are focused on two way classification to filter spam mails from normal ones based mainly on Bayesian and Rule. The clustering method has been used for the multi-way classification of e-mails. But it has a disadvantage of low accuracy of classification and no category labels. The classification methods have a disadvantage of training and setting of category labels by user. In this paper, we propose a novel multi-way e-mail hierarchy classification method that uses PCA for automatic category generation and dynamic category hierarchy for high accuracy of classification. It classifies a huge amount of incoming e-mails automatically, efficiently, and accurately.