1984 (2) TMI 331 - AT - Central Excise

Summary

Issues Involved:

1. Whether the classification lists, approved in accordance with Rule 173B (2) by the Assistant Collector, can be revised by another Assistant Collector in light of Section 35A.
2. Whether the demand is time-barred.
3. Whether the appellants are entitled to the benefit of Notification No. 208/67, dated 8-9-1967.

Issue-Wise Detailed Analysis:

1. Revision of Classification Lists:

The appellants contended that once the classification lists were approved by the Assistant Collector, it was not permissible for his successor to issue a show cause notice that would effectively modify the quasi-judicial orders passed on the classification lists. They argued that any revision must be carried out by the Central Board of Excise and Customs under Section 35A, and cited the Tribunal's decisions in M/s. Nuchem Plastics Ltd. v. Collector of Central Excise, New Delhi, and Rishi Enterprises, Bombay v. Collector of Central Excise, Bombay to support their argument. The Department, however, argued that a deliberate mis-statement by the appellants justified the issuance of a show cause notice under Rule 10A. The Tribunal found that Rules 10 and 10A of the Central Excise Rules provide statutory powers for the recovery of duties or charges short-levied or erroneously refunded. It was concluded that an order passed by a Central Excise Officer could be reviewed by his successor, especially in cases of short levy or erroneous refund, as set out in Rule 10 and Rule 10A.

2. Time-Barred Demand:

The appellants argued that the show cause notice issued on 19-7-1974 for the period 1-4-1972 to 10-4-1972 was time-barred under Rule 10 of the Central Excise Rules. They cited rulings in Light Roofings Ltd. v. Supdt. of Central Excise, Kancheepuram, and others, which held Rule 10A ultra vires. The Tribunal agreed with the appellants, stating that Rule 10A could only be operative when other rules do not make specific provisions for the collection of duty. The Tribunal noted that the show cause notice should have been issued under Rule 10 within one year, and since it was not, the notice was time-barred. The department's reliance on Section 9(2) was also dismissed as there was no allegation in the show cause notice to that effect.

3. Entitlement to Notification No. 208/67:

The appellants claimed that their factory did not have a plant attached for making bamboo pulp and hence were entitled to the benefit of Notification No. 208/67. They provided an affidavit from the Plant Manager and a technical opinion from the Institute of Paper Technology, Saharanpur, to support their claim. The Department argued that the factory used both bamboo and wood as raw materials and that the plant was capable of chipping bamboo, thus disqualifying the appellants from the notification's benefits. The Tribunal found that the plant was not designed for making bamboo pulp, despite being capable of it. The term "attached" in the notification was interpreted to mean a plant designed and used for making bamboo pulp, not merely capable of it. The Tribunal concluded that there was no suppression of facts by the appellants, and the show cause notice was not justified.

Conclusion:

The Tribunal allowed the appeal, finding that the show cause notice was time-barred and that the appellants were entitled to the benefit of Notification No. 208/67. The classification lists could not be revised by a successor Assistant Collector without following the proper procedures under Section 35A.