Customs, Excise and Gold Tribunal - Tamil Nadu
Premier Polysacks (P) Ltd. And Poly Tex ... vs Cce on 8 June, 2004
Equivalent citations: 2004(97)ECC114
ORDER Jeet Ram Kait, Member (T)
1. Both these appeals arise out of a common Order-in-Appeal No. 262 to 270/2003 (SCN) TRY-II dated 29.5.2003 passed by the Commissioner of Central Excise (Appeals), Trichirapalli, whereby the Commissioner has held that the date of effect of the Board's order issued under Section 37B of the CE Act, 1944 is the date on which the Trade Notice communicating the Board's order, was issued, The issue arising for determination in both these appeals are same and hence these were heard together and orders reserved. These appeals are therefore taken up for decision by this common order.
2. The brief facts of the case are that Central Board of Excise & Customs vide Section 37B order No. 8/92 dated 24.9.92, had ordered that HDPE/FP strips, sacks and fabrics are classifiable under various heading of Chapter 39. Consequently, the assessee-appellants re-classified their products and started paying duty at the higher rate applicable to goods falling under the said chapter ranging from 25.9.02 to 22.11.92 Show cause notices were issued to the appellants informing them of the change in classification and demanding differential duty for various periods ranging from the date of the Section 37B order to the date from which they had started paying duty at the higher rate. The show cause notices culminated in the order passed by the original authority whereby the original authority held that the orders of the Board could be made applicable only from the date of communication and filing of the revised classification list and that the revised classification and consequential demand were operative not retrospectively but only from the date of show cause notices. While holding so, he has relied upon the order of the Tribunal in the case of Brakes India Ltd. and Ors. v. CCE, 1987 (14) ECC 157(T): 1987(31) ELT 1030 wherein it was held that revised classification and consequential demand is not operative retrospectively but from the date of show cause notice. He therefore, dropped the further proceedings in the show cause notices.
3. Against the above decision of the original authority, the Department moved the Commissioner (Appeals) who by the impugned order held that the date of effect of the Board's order is the date on which the Trade Notice was issued communicating the Board's order. In support of his decision, he has relied upon the judgment of the Hon'ble Supreme Court in the case of M/s HM Bags Manufacturer reported in 1997 (94) ELT 3 (SO wherein the Hon'ble Apex Court held that the Board's order issued under Section 37B and communicated under the Trade Notice dated 5.11.92 could not be effective from the date prior to the date on which the Trade notice was issued. In the present case, the Board's order is dated 24.9.92 while the Trade Notice issued by the Trichy Commissionerate is dated 1.10.92. Hence the Commissioner (Appeals) has held that the effective date of the Board's order is the date on which Trade notice was issued viz. 1.10.92.
4. Appearing for the appellants M/s Premier Polysacks Pvt. Ltd., Shri V.S. Venugopalan, learned Counsel submitted that in the case of his clients the Range Supdt. informed the appellants by his letter No. 1805/92 dated 16.10.92 to revise the classification list and the appellants revised the classification list on 21.10,92 and it was approved on 23.10.92. However, the show cause notice for proposing to demand higher duty with effect from 24.9.92, that is from the date of Section 37B order, was issued only 19.1.1993, as shown in the Order-in-Original. Since the revised classification list was approved with effect from 23.10.92 the new rate of duty can only be effective from 23.10.92 In support of his plea he has invited our attention to the judgment of the Hon'ble Apex Court in the case of Espi Ind. Chemicals (P) Ltd. v. CCE, 1996 (82) ELT 444 (SC), CCE v., Bhiwani Textiles Mills Ltd., 1996 (88) ELT 639 (SC) and Stadmed Pvt. Ltd. v. CCE, 2002 (149) ELT 930:
5. Shri Masilamoney, learned Consultant appeared for the other appellants viz. M/s Poly Tex Industries. He has taken similar ground as in the other appellants. In their case show cause notice seeking to revise the classification was issued on 9.2.1993, as shown in the Order-in-original. He, therefore, prayed for allowing their appeal holding that the effective date of the Board's order in their case is the date of issue of the show cause notice i.e. 9.2,2003 and not 1.10.1992 as held by the lower appellate authority.
6. Shri A. Jayachandran, learned JDR for the Revenue submitted that the order of the Commissioner (Appeals) holding that the date of issue of the Trade Notice by the Collector (Commissioner) Trichy is the effective date, is a reasoned order supported by the ratio of the law laid down by the Hon'ble Supreme Court in the case of M/s HM Bags reported in 1997 (94) ELT 3 (SC) and therefore, the impugned order is required to be upheld and the appeals rejected.
7. We have carefully considered the rival submissions and gone through the case records and noted the various case laws cited by the parties. We note that the Board's order under Section 37B was issued vide order No, 8/92 dated 24.9.1992. This order was an order for reclassifying various items such as strips, sacks and fabrics under Chapter 39. The order was communicated to the Trade by the Collector (Commissioner) of Central Excise, Trichy by Trade Notice dated 1.10.92. Therefore, the Commissioner (Appeals) took the view that the effective date of the order of Board is the date on which the order was communicated by the Trade notice and not the date of issue of the Board's order, In holding so, he relied upon the judgment of the Hon'ble Apex Court in the case of M/s HM Bags (supra), wherein it was held that the Board's order cannot be made effective to a date prior to the date of issue of the Trade notice communicating the Board's order. We have perused Section 37B of the Central Excise Act, 1944. This Section confers upon the Central Board of Excise and Customs power to issue orders, instructions and directions for the purpose of ensuring uniformity (emphasis supplied by us) in the classification of goods or with respect to levy pf duties on goods. The Hon'ble Supreme Court in the case of HM Bags manufacturer (supra) has dealt with the specific question as to the effective date from which the order issued by the Central Board of Excise & Customs under Section 37B of the Act, should be taken into consideration and has ruled that the effective date for raising the demand must be the date of issue of the Circular/Trade notice communicating the Board's order to the trade and that the effective date cannot be prior to the date of issue of Circular/Trade notice. While the contention of appellants M/s Premier Polysacks (P) Ltd. is that the effective date should be the date on which the revised classification list was approved (in their case on 23.10.92), the other appellants would contend that the effective date should be the date of issue of show cause proposing to demand higher rate of duty. As noted above, the very purpose of issue of Section 37B order is to ensure uniformity in the matter of classification of goods or levy of duties of excise and it is for this reason that the Hon'ble Apex Court has ruled that the effective date shall be date of issue of trade notice/Circular. If the date of approval of the revised classification or the date of issue of show cause notice is taken as the effective date, then the question of uniformity as envisaged under Section 37B cannot be ensured, as date of issue of show cause notice and /or date of approval of classification throughout the country will be different.
The appellants have relied upon various case laws such as ESPI Industries and Chemicals Ltd., 1996 (82) ELT 444 (SC), CCE, New Delhi v. Bhiwani Textiles Mills, 1996 (88) ELT 639 (SC), CCE v. Giridhara Supply Co., 1997 (94) ELT 14 (SC), Kirloskar Oil Engines Ltd. v. UOI, 1991 (51) ELT 334 (Bom), Rainbow ink and Varnish Mfg Co. Ltd. v. CCE, 1992 (59) ELT 593 in support of their plea that the demand of duty can be enforceable from the date of proposal for change in the classification. In none of the judgments relied upon by the appellants as noted above, a situation as has arisen in the present case dealing with Section 37B order has been dealt with. Therefore, all those judgments are clearly distinguishable from the ruling of the Apex Court in the case of HM Bags (supra). Further, both the appellants herein have also relied upon the ruling of the Hon'ble Supreme Court in the case of HM Bags (supra) in their endeavour to make the Bench believe that this judgment is in their favour. We are of the considered opinion that this judgment is not in favour of the assessee-appellants. As noted above, the Hon'ble Apex Court has specifically dealt with the question of the effective date of the Board's order issued under Section 37B and has ruled that the effective date of Board's Order cannot be prior to the date of issue of Circular/Trade notice communicating the Board's order to the trade. In the present case, the Central Board of Excise and Customs has issued the Section 37B order vide Order No. 8/92 dated 24.9.92 and the same was communicated to the Trade by the Collector of Central Excise, Trichy vide his Trade Notice on 1.10.92. Therefore, as rightly held by the Commissioner (Appeals), the date on which the Board's order has been taken to have been communicated to the trade is on 1.10.92 i.e. the date on which Trade notice has been issued. Therefore, we are of the considered opinion that the impugned order of the Commissioner (Appeals) is perfectly in accordance with the law laid down by the Hon'ble Apex Court in the case of HM Bags (supra). We, therefore, uphold the impugned order. The appeals accordingly fail and are dismissed.