Customs, Excise and Gold Tribunal - Delhi
Ess Ess Metal And Alloys And Anr. vs Collector Of Central Excise on 18 March, 1993
Equivalent citations: 1993(93)ECR70(TRI.-DELHI)
ORDER G.P. Agarwal, Member (J)
1. Being dissatisfied with the impugned Orders passed by he Additional Collector of Central Excise, Chandigarh, both the appellants have filed heir respective present appeals.
2. Common facts in both the appeals are that, both the appellants are engaged in the nanufacture of Unwrought Zinc Slabs falling under Heading 7901.20 of CET out of imported galvanised Zine Ash. As a result of Budgetary changes made in the Budget 1988-89, Waste and Scrap of Zinc (which includes dross and ash) had been excluded from Chapter 79 and included in Chapter 2620.00 of CET. According to the Department, the Zine Slabs so manufactured form the raw material falling under Chapter 26 were not enjmtled for exemption under Notification No. 104/88-CE dated 1.3.1988 and since as a result of visit of the premises of both the appellants on 27.6.1988 it was found that they lad manufactured and cleared Zinc Slabs without payment of duty and without observing other central excise formalities during the period from 1.3.1988 to 31.3.1988 and 1.4.1988 to 22.6.1988, separate show cause notices were issued to them calling upon the appellants M/s. Ess Ess Metal and Alloys and M/s. Fertichem (India) to pay central excise duty amounting to Rs. 87,321.78 and 1,13,520.97, respectively. Both the appellants contested the show cause notices. However, the Additional Collector vide his two separate impugned orders confirmed the demand. Hence the present two appeals by the respective appellants and since the common questions were involved, the same were heard together.
3. Arguing on behalf of both the appellants, Shri V. Sridharan, learned Counsel submitted that transfer of any product from the Heading or Chapter to another Heading or Chapter takes effect from the date of enactment of the Finance Act and not from the date of presentation of the Finance Bill and the provisions of the Provisional Collection of Taxes Act, 1931 which provides for a declaration for giving immediate effect could be made only in respect of those proposals which sought to impose duty of excise or increase the duty of excise. Elaborating on his submissions, he submitted that admittedly Unwrought Zinc Slabs manufactured by the appellants out of the imported raw material fell under Heading 7901.20 till the enactment of the Finance Act, 1988 and by passing this Finance Act, the said product was excluded from Chapter 79 and included in Chapter 26 and since it was simply a case of transferring the product from one 1 leading to another, it will come into operation from the date on which the said Finance Act became the law that is to say, on 13.5.1988. Therefore, denial of the benefit of Notification No. 104/88-CE dated 1.3.1988 by the Additional Collector couuld not be sustained. Regarding the remaining period that is to say, from 13.5.1988 to 22.6.1988, it was contended by him that it was the defence of the appellants that they were entitled for the benefit of Notification No. 183/88-CE dated 13.5.1988, but this plea vas not considered by the Additional Collector. It was also contended by him that the demand was time barred and there was no cause or reason for imposing any personal penalty. To support his arguments, he cited the case of Sankey Wheels Ltd., Durgapur v. Collector of Central Excise Collector of Central Excise v. Peico Electronics and Electricals Ltd. 1986 (6) ECR 416. In reply, Shri M.S. Arora, learned JDR, did not dispute the legal position as contended by the learned Counsel for the appellants, adding that declaration being made under the Provisional Collections of Taxes Act, 1931 cannot be challenged by the appellants and cited the case of Collector of Central Excise, Chandigarh v. Doaba Co-operative Sugar Mills , wherein it was held that the Appellate Tribunal as well as the authorities under the Acts are bound by the statutory period of limitation.
4. We have considered the submissions. The first point of dispute is whether during the period from 1.3.1988 to 12.5.1988 the appellants were entitled to the benefit of exemption Notification No. 104/88-CE dated 1.3.1988. It is not in dispute that before the enactment of the Finance Act, 1988 Unwrought Zinc Slabs manufactured by the appellants out of the imported galvanised Zinc Ash were classifiable under Heading 7901.20. As a result of Budgetary changes made in the Budget 1988-89, Waste and Scrap of Zinc (which includes dross and ash) had been excluded from Chapter 79 and included in Chapter 2620.00 of CET. The Additional Collector had denied the benefit of Notification No. 104/88-CE dated 1.3.1988 on the ground that the said Budgetary changes became effective from 1.3.1988 as against the claim of the appellants that the said Budgetary changes will come into operation from the date on which the Finance Act became the law. After going through the case law cited at the Bar, we are of the view that the contention raised by the learned Counsel has much force. In the case of Sankey Wheels Ltd., Durgapur v. Collector of Central Excise, supra, it was held that Provisional Collection of Taxes Act, 1931 applies only to imposition or increase in duty. Hence inapplicable to mere change in the Tariff Entry. Same view was expressed in the case of Collector of Central Excise v. Peico Electronics and Electricals Ltd., supra. In the instant case, admittedly, as aforesaid, Unwrought Zinc Slabs manufactured by the appellants out of the imported raw-material fell under Heading 7901.20 and by passing this Finance Act, 1988 the said product was excluded from Chapter 79 and included in Chapter 26 and, therefore, it was simply a case of transferring the product from one Heading to another. Consequently, it will come into operation from the date on which the said Finance Act became the law, that is to say, on 13.5.1988. As a result thereof, we hold that the appellants were entitled for the benefit of the said Notification till the passing of the Finance Act, that is to say, on 135.1988. As regards the other contention of the appellants that for the remaining period from 13.5.1988 to 22.6.1988, the appellants were entitled for the benefit of Notification No. 138/88-CE dated 13.5.1988, we find that this plea was not considered by the Additio nal Collector in his impugned Orders. Likewise, the Additional Collector has not dealt with the plea of the appellants that they were not guilty for any wilful suppression of fa ct or mis-description in so many words nor he has recorded a clear finding as to how tthe demand is not time-barred. Under these circumstances, it has become necessary to remand the case to the Additional Collector to decide the said two contentions of the appellants according to law after hearing the appellants.
5. In the result. we set aside the impugned Orders and remand the case to the Additional Collector of Central Excise, Chandigarh, to decide the said two issues, as directed above.