Customs, Excise and Gold Tribunal - Delhi
Collector Of C. Ex. vs Rambal (P) Ltd. on 29 June, 1990
Equivalent citations: 1990ECR684(TRI.-DELHI), 1990(49)ELT581(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. Brief facts of the case are as follows :-
1.1 Respondents had filed a classification list on 18-3-1981 in respect of 625 items for classifying them under T.I. 68. Later on, by a notice dated 20-7-1981 a show cause notice was issued by the department asking the respondents to show cause as to why "certain items having threads should not be reclassified under T.I. 52 of the First Schedule of the Central Excise Rules, 1944." A reply to this show cause notice was submitted by the respondents on 11-9-1981. At this stage it is asserted by the learned advocate that the goods were being cleared by the assessee under T.I.68 as per approval of the classification list. After about 2 years a corrigendum to the show cause notice dated 20-7-1981 was issued on 9-8-1983. This corrigendum we find makes some verbal changes in the show cause notice dated 20-7-1981. The total effect of the show cause notice dated 20-7-1981 read with corrigendum to the show cause notice dated 9-8-1983 is that no demand of duty has been made by the department and asking the respondents to show cause against recovery of duty prior to six months of the show cause notice. Some time lapsed after issue of the corrigendum and thereafter the order-in-original dated 7-4-1984 was issued by the Assistant Collector reclassifying certain items under T.I. 52 and demanding the duty in respect of clearances effected during six months prior to the date of first show cause notice dated 20-7-1981.
1.2 In appeal before the Collector (Appeals), Madras, the order-in-original was set aside on the ground that the adjudicating authority namely the Assistant Collector had no jurisdiction to review the classification list once approved by him. The Collector (Appeals) took support from Rule 173-B(4) which sets out certain circumstances in which fresh classification list can be filed by the assessee/manufacturer. The reasoning of the Collector (Appeals) is that unless one of these circumstances was satisfied no review of the classification list could be made by the Assistant Collector. As regards the demand of duty the Collector (Appeals) has stated that the relevant date given in Section 11A is the date of filing of the R.T. 12 and within six months of that duty could be demanded. Therefore, the demand of duty by the Assistant Collector vide the order-in-original dated 7-4-1984 is beyond time. It is against the aforesaid order of the Collector (Appeals) that the department has filed an appeal now before the Tribunal.
2. Learned DR Shri Jai Narayanan Nair urges that now the question is well settled that the Asstt. Collector has the authority to review the classification list in terms of Section 11A of the Act. In support of this proposition he cites the following authorities:-
(1) 1985 ($22) ELT 751 - Karnataka [Shyam Sunder V. Nichani v. ACCE).
(2) 1988 (38) ELT 571 SC [Elson Machines Pvt. Ltd. v. CCE] (3) 1990 (45) ELT 428 (Tri.) [CCE v. Fenner India Ltd.] He, therefore, urges that on the first ground the impugned order is wrong and should be set aside. On the next point regarding the demand of duty, the learned DR has submitted that Section 11A is categorical in this regard that duty can be demanded for the period of six months prior to the date of issue of the show cause notice.
3. On a query from the Bench whether the show cause notice has demanded duty from the respondents, the learned DR has submitted that although it is not in terms stated as such but the fact that the question of reclassification has been mentioned, the consequence of demand of duty would automatically follow on reclassification. He submits that it is immaterial whether the duty has been quantified or not and that does not vitiate the notice dated 20-7-1981. He submits in support of this proposition judgment of Delhi High Court in the case of Hindustan Aluminium Corporation reported in 1981 (8) ELT 642. He, therefore, submits that the demand made by the department is valid and the impugned order, therefore, should be set aside.
4. Opposing the contentions of the department, learned advocate submits that he does not contend against the right of the department to review the classification list in terms of the provisions of Section 11-A as is held by the various authorities cited by the learned DR. He, however, submits that the demand is not at all called for in view of the very casual approach undertaken by the department in deciding the case. The show cause notice was issued, he submits, on 20-7-1981 and the decision has taken about three years. During all this period the goods were being cleared by the assessee in terms of the approved classification list under T.I. 68 at the lower rate of duty. Any demand of duty without approving the classification list provisionally would seriously prejudice his case. He cannot recover any duty from the customers. On the importance of deciding the classification list promptly, learned advocate draws attention to the observation of the Tribunal in 1988 (35) ELT 142. In any case he submits that there is no case for demand of duty at all because the show cause notice does not in terms ask the respondents to show cause against the demand of duty for the six months prior to issue of the show cause notice. In the absence of any such show cause notice the notice dated 20-1-1981 can be made the basis for raising the demand of duty for the six months as has been done by the Assistant Collector [1988 (35) ELT 349 - UOI v. Madhumilan Syntex (Pvt.) Ltd.].
5. We have carefully considered the pleas advanced on both sides. We agree with the first submission of learned DR that the Asstt. Collector has the right to review the classification list in terms of Section 11A while recovering duty short-levied or not paid. We find that the Collector (Appeals) has not applied his mind to reclassification of the goods in this case on the reasonings already set out above. In view of the settled position, on the question of review of the classification list, we would remand the matter to the Collector (Appeals) so far as the question of reclassification of the concerned items is concerned. As regards the demand of duty we find substantial force in the plea of the learned advocate. On a perusal of the show cause notice dated 20-1-1981 read with corrigendum dated 9-8-1983 we find that the respondents have not been asked to show cause against the demand of duty for the six months prior to the issue of the show cause. Accordingly, no demand of duty can be made as has been by the Assistant Collector in the order-in-original. The demand of duty is, therefore, set aside. While doing so, we rely on para 4 of the Supreme Court judgment in the case of Madhumilan supra.
6. In sum, the matter is remanded to the Collector (Appeals) for deciding the case on merits so far as the question of reclassification is concerned. The demand of duty is, however, set aside.
7. Appeal is disposed of in the above terms.
8. Cross-objections are not maintainable because the respondents had got complete relief by the impugned order. Therefore, the cross-objections are dismissed as in-fructuous.