1995 (11) TMI 109 - HC - Central Excise

Summary

Issues:
1. Validity of classification and levy of excise duty on Electrical Laminations and Stampings.
2. Jurisdiction of Assistant Collector to issue show cause notice for provisional assessment and recovery of excise duty.
3. Application of Section 11A of the Central Excise Act in the case.

Analysis:
1. The appellant, a Company manufacturing various electrical goods, including Electrical Laminations and Stampings, filed a classification list approved by Excise Authorities under Entry 28A of the Central Excises and Salt Act, 1944. Subsequently, a writ petition was filed challenging the levy of excise duty on these products. The Single Judge initially granted an injunction against the Department from collecting duty under Tariff Item 28A. However, the petition was dismissed later, and an appeal led to the matter being remitted for fresh classification by the Collector of Central Excise (Appeals).

2. Following this, the Assistant Collector issued a show cause notice seeking to classify the Laminations under a different tariff item and recover a substantial amount of excise duty. The Company challenged the legality of this notice, arguing that it was beyond the jurisdiction of the Assistant Collector to provisionally assess and demand duty under Rule 9B without passing a formal order of assessment. The Single Judge dismissed this challenge, leading to the present appeal.

3. The appellant contended that the show cause notice was time-barred under Section 11A of the Act since it was issued after the expiry of the limitation period. However, the Court rejected this argument, citing that the period of stay due to the earlier injunction should be excluded from the computation of the limitation period. Additionally, the Court upheld the Assistant Collector's authority to pass a provisional assessment order after the stay was lifted and disagreed with the appellant's claim that the order was delayed. The Court also referred to a previous judgment that clarified the applicability of Section 11A in such cases and emphasized that the recovery can be made under Rule 173-I without invoking Section 11A.

In conclusion, the Court found no merit in the appellant's contentions regarding the jurisdiction of the Assistant Collector and the application of Section 11A. The Court declined to interfere with the Assistant Collector's actions, noting that the appellant's delay tactics through legal proceedings were aimed at postponing the payment of substantial duty amounts. Consequently, the appeal was dismissed, upholding the validity of the show cause notice and the Assistant Collector's actions in assessing and demanding excise duty.