1983 (9) TMI 298 - AT - Central Excise

Summary

Issues Involved:
1. Excisability and classification of certain goods under Item 52 of the Central Excise Tariff Schedule.
2. Competence of the Assistant Collector to review a previous decision on assessment.
3. Applicability of time-bar for issuing the show cause notice-cum-demand.

Detailed Analysis:

1. Excisability and Classification under Item 52:
The core issue in this case pertains to the classification of four items-cylinder stud bolts, main bearing stud, cylinder head stud, and long stud-manufactured by the appellants. The authorities below classified these items under Item 52 of the Central Excise Tariff Schedule, which covers "bolts and nuts, threaded or tapped, and screws." The appellants contended that these items were "high tensile industrial fasteners" specifically designed for use in automobiles and performed functions apart from fastening, thus should not fall under Item 52.

The Assistant Collector initially reclassified the items under Item 52, following which a show cause notice-cum-demand was issued. The Appellate Collector upheld this classification, stating that the basic function of the goods was to fasten various machinery parts, and their specialized engineering did not alter their fundamental nature as fasteners.

2. Competence of the Assistant Collector to Review a Previous Decision:
The appellants argued that the Assistant Collector lacked jurisdiction to review the decision of his predecessor. They cited the judgment of the Madras High Court in Indian Organic Chemicals Ltd. v. Union of India, which restricts such reviews. However, the respondent relied on the Delhi High Court's judgment in Bawa Potteries, which allows for a review under Rule 10 of the Central Excise Rules if the earlier assessment was deemed incorrect.

The Tribunal found that the case was covered by the Delhi High Court judgment in Bawa Potteries, which permits review for cogent reasons and compliance with natural justice principles. Thus, the Assistant Collector's order was upheld as being within proper authority.

3. Applicability of Time-Bar:
The issue of time-bar was raised concerning the show cause notice-cum-demand issued by the Superintendent under Rule 10. The Tribunal noted that the notice was issued within one year of the date of approval of the classification list, thereby falling within the permissible time limit under Rule 10 as applicable at that time.

Conclusion:
The Tribunal concluded that the Assistant Collector had the authority to review the earlier decision and that the show cause notice was issued within the permissible time limit. However, on the merits of the classification, the Tribunal found it necessary to consider the possible classification under Item 34A, which had not been specifically raised earlier. The Tribunal remanded the case to the Assistant Collector for a de novo determination, including the alternative classification under Item 34A, to be completed within six months.