1986 (7) TMI 242 - AT - Central Excise

Summary

Issues Involved:
1. Concessional rate of duty under Notification No. 116/69.
2. Time bar for filing appeals under Section 35E(2) of the Central Excises & Salt Act.
3. Validity of the disposal of appeals by an Addendum.
4. Applicability of the Atma Steels case decision.

Detailed Analysis:

1. Concessional rate of duty under Notification No. 116/69:
The respondents, M/s. Sarabhai Chemicals, claimed a concessional rate of duty at 2-1/2% under Notification No. 116/69 for nine items of Patent or Proprietary Medicines. The Assistant Collector initially approved this concessional rate on 12.1.83.

2. Time bar for filing appeals under Section 35E(2) of the Central Excises & Salt Act:
The Collector of Central Excise, Baroda, issued directions on 8.10.84 and 9.1.85 to file appeals against the Assistant Collector's order. The Collector (Appeals) rejected these appeals as time-barred, referencing the Larger Bench decision in the Atma Steels case. The Collector (Appeals) noted that the authorisation under Section 35E(2) was issued after more than one year from the Assistant Collector's order, thus exceeding the limitation period.

3. Validity of the disposal of appeals by an Addendum:
The Collector (Appeals) disposed of the second appeal by an Addendum to the order-in-appeal dated 26.8.85. The Tribunal found that this method was inherently defective and not in accordance with Section 35-A of the Central Excises & Salt Act, which requires a detailed statement of points for determination and reasons for the decision. The Addendum failed to amend the references in the singular to "an appeal" or "the appeal," rendering the disposal legally unsound.

4. Applicability of the Atma Steels case decision:
The respondents argued that the Atma Steels case covered their issue, asserting no vested right by the State and procedural law of limitation applying retrospectively. However, the Tribunal distinguished the present case from Atma Steels, noting that Atma Steels dealt with amendments to rules relating to short-levy or non-levy of duty, not the provisions relating to appeals under the Central Excise Act.

The Tribunal referenced the Supreme Court decision in AIR 1957 - SC - 540, which established that a right of appeal is a vested right and can only be taken away by express provision or necessary intentment in subsequent legislation. The Tribunal concluded that the amended provisions of Section 35E(2) effective from 11.5.84 did not expressly provide for retrospective effect. Applying the amended one-year limitation period would result in the appeal being time-barred even before the amendment took effect, which could not have been the legislative intent.

Conclusion:
The Tribunal held that the order of the Collector (Appeals) rejecting the appeals as time-barred was legally unsound. The disposal of the second appeal by an Addendum was also defective. The case was remanded to the Collector (Appeals) for a decision on merits, with a fresh opportunity for both parties to be heard.