1984 (11) TMI 343 - AT - Central Excise

Summary

Issues Involved:
1. Jurisdiction and competence of the Assistant Collector to modify an approved price-list.
2. Applicability and interpretation of Rule 10 of the Central Excise Rules.
3. Limitation period for issuing a show cause notice under Rule 10.
4. Finality of an approved price-list under Rule 173C.

Detailed Analysis:

1. Jurisdiction and Competence of the Assistant Collector:
The primary issue was whether the Assistant Collector had the jurisdiction and competence to revise an approved price-list. The appellants argued that the modification amounted to a review which could only be done by the Central Board of Excise and Customs under Section 35A of the Central Excises and Salt Act, or if Rule 10 was properly complied with. The Tribunal found that the Assistant Collector was competent to revise the approval based on the Delhi High Court's decision in the Bawa Potteries case, which upheld the Assistant Collector's authority to modify an earlier approval if it was based on an erroneous view.

2. Applicability and Interpretation of Rule 10:
The appellants contended that Rule 10 was not applicable as no show cause notice was issued before the Assistant Collector's letter dated 9-8-1976. The Tribunal, however, held that Rule 10 was applicable as there was a prima facie short-levy. The Tribunal referred to the Bawa Potteries case, which allowed for the review of earlier decisions under Rule 10 if the earlier decision was erroneous due to "inadvertence, error, collusion, or misconstruction on the part of an officer." The Tribunal found that the conditions for invoking Rule 10 were satisfied as a show cause notice was issued on 16-10-1976.

3. Limitation Period for Issuing a Show Cause Notice:
The appellants argued that the demands were time-barred. The Tribunal referred to the decisions in the Bawa Potteries and Triveni Sheet Glass Works cases, which clarified that the limitation period under Rule 10 would run from the date of assessment by the Central Excise authorities on the RT-12 Return. Since all assessments were made between 28-1-1976 and 8-12-1976, the show cause notice issued on 16-10-1976 was deemed to be within the limitation period.

4. Finality of an Approved Price-List under Rule 173C:
The appellants argued that Rule 173C intended to give finality to an approved price-list. The Tribunal acknowledged this but preferred the Delhi High Court's decision in the Bawa Potteries case over the Calcutta High Court's decision in the Union Carbide case. The Tribunal concluded that Rule 173C did not explicitly disallow amendments initiated by the Central Excise authorities and that such amendments were permissible under the parameters laid down by the Delhi High Court.

Separate Judgment by M. Gouri Shankar Murthy, Member (J):
In a dissenting opinion, Member (J) M. Gouri Shankar Murthy argued that a power of review must be expressly granted or implied by necessary implication. He contended that Rule 173C did not confer a power of review for an approved price-list and that any alteration should be prospective, not retrospective. He also emphasized that Rule 10 did not apply to the review of an approved price-list as it dealt with short-levy or erroneous refund in consequence of an assessment, not the approval of a price-list. He concluded that the appeal should be allowed.

Conclusion:
In the majority view, the Tribunal found that the Assistant Collector's order was not lacking in competence or jurisdiction, nor was it time-barred. The revised method for arriving at the assessable value was correct, and the appeal was rejected. The dissenting opinion held that no power of review was conferred under Rule 173C, and therefore, the appeal should be allowed. However, the majority decision prevailed, and the appeal was rejected.