1982 (6) TMI 58 - HC - Central Excise

Copper and Copper alloy flats, bus bars or copper strips having thickness between 9.53 mm to 10 mm - Liability to duty - Demand Notice

Summary

Issues Involved:

1. Whether the goods cleared by the petitioners were correctly classified as "strips" and thus dutiable under Item 26A(2) of the Central Excise Tariff.
2. Whether the demand notice should have been issued under rule 10 instead of rule 9 of the Central Excise Rules.
3. Whether the absence of a formal show cause notice invalidated the demand.

Issue-wise Detailed Analysis:

1. Classification of Goods:
The primary issue was whether the goods cleared by the petitioners were "flats" or "strips" as per the revised Indian Standard Institution (I.S.I.) definition effective from October 1, 1965. The revised definition described "strips" as flat products over 0.16 mm and up to and including 10.00 mm thickness of any width, generally not cut to length, and usually in coil but may be flat or folded. The petitioners argued that their goods were "flats" and thus not dutiable. However, the court noted that the goods in question fell under the revised definition of "strips" and were therefore excisable under Item 26A(2) of the Central Excise Tariff. The court referenced decisions from the Madras High Court and the Delhi High Court, which preferred the Indian Standard Institution's definitions in technical matters, affirming that the goods were correctly classified as "strips."

2. Applicability of Rule 9 vs. Rule 10:
The petitioners contended that the demand notice should have been issued under rule 10, which pertains to cases where there has been an assessment, rather than under rule 9. The court rejected this argument, stating that rule 10 applies only when there has been an assessment, which was not the case here. The demand was correctly made under rule 9. Additionally, the court considered rule 10-A, which covers cases of increased levy due to a change of law, and found that the demand was protected under this rule as well.

3. Absence of Formal Show Cause Notice:
The petitioners argued that the demand was invalid because no formal show cause notice was issued. The court dismissed this contention, noting that the Superintendent of Central Excise had issued a notice on March 7, 1972, informing the petitioners that their products were classified as "strips" and dutiable under Item 26A. The notice also requested particulars of clearances from April 1, 1965, indicating that the petitioners were aware of the demand. The court concluded that the notice functioned effectively as a show cause notice, and rejecting the demand on this technicality would be unjust.

Conclusion:
The court found no reason to interfere with the impugned orders. The petition was dismissed, and the rule was discharged with costs, affirming that the goods were correctly classified as "strips," the demand was rightly made under rule 9, and the notice issued sufficed as a show cause notice.