1979 (8) TMI 89 - HC - Central Excise

Summary

Issues:
Challenge to the validity and legality of the order passed by the Assistant Collector regarding excise duty on monofilament yarn under Tariff Item No. 18.

Detailed Analysis:

1. Background and Facts:
The petitioners, manufacturers of nylon products, sought clarification from the Assistant Collector regarding the applicability of duty under Tariff Item No. 18. Initially, they were informed that their products were not liable for duty under this tariff item.

2. Central Board's Tariff Advice:
The Central Board of Excise and Customs issued Tariff Advice No. 12 of 1972, expanding the scope of Tariff Item No. 18 to include nylon monofilaments meeting specific criteria. Subsequently, demand notices were issued to the petitioners for excise duty on monofilaments cleared between March 16, 1972, and December 31, 1973.

3. Legal Challenge:
The petitioners contested the demand notices, arguing that the Central Board's advice did not have the force of law. They contended that the Assistant Collector's reliance solely on this advice rendered the order invalid. Citing a Supreme Court decision, they emphasized that administrative officers must not base quasi-judicial decisions solely on administrative directives.

4. Court's Decision:
The Court found in favor of the petitioners, holding that the Assistant Collector's reliance on the tariff advice was unsustainable. The Court rejected the suggestion to remit the proceedings back to the Assistant Collector, citing jurisdictional constraints and the significant lapse of time since the duty period. The Court set aside the order, allowing the department to initiate independent proceedings if supported by valid legal grounds and excluding the tariff advice.

5. Conclusion:
The petition succeeded, with the Court setting aside the Assistant Collector's order regarding excise duty on monofilament yarn. The department was granted the option to pursue independent proceedings if legally permissible and supported by relevant evidence, excluding the previously relied upon tariff advice. No costs were awarded in this case.