1992 (10) TMI 170 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the item "fasteners" under TI 52.
2. Demand for differential duty for a period of 6 months prior to the show cause notice dated 19-10-1983.
3. Validity of the show cause notices issued on 30-6-1981, 25-3-1983, and 19-10-1983.
4. Authority of the Assistant Collector to reclassify items and demand duty under Section 11A of the Central Excises and Salt Act, 1944.

Issue-wise Detailed Analysis:

1. Classification of the Item "Fasteners" under TI 52:
The assessee challenged the classification of "fasteners" under Tariff Item (TI) 52. The matter had been settled by the Supreme Court in Plasmac Machine Mfg. Co. Pvt. Ltd. v. Collector of Central Excise, which held that tie bar nuts, despite their fastening function, should be classified under TI 52. The Tribunal followed this precedent in Hindustan Motors v. Collector of Central Excise. Consequently, the Tribunal upheld the classification of "fasteners" under TI 52, as determined by the Collector (Appeals).

2. Demand for Differential Duty for a Period of 6 Months Prior to the Show Cause Notice Dated 19-10-1983:
The Revenue contested the limitation imposed by the Collector (Appeals) on the demand for differential duty, arguing that the demand should be computed from the first show cause notice dated 30-6-1981. The Collector (Appeals) restricted the demand to 6 months prior to the corrigendum show cause notice dated 19-10-1983. The Tribunal held that the corrigendum dated 19-10-1983 was not a fresh show cause notice but merely specified the amount of duty and the provision of law. Therefore, the demand was valid for 6 months prior to the original show cause notices dated 30-6-1981 and 23-5-1983.

3. Validity of the Show Cause Notices Issued on 30-6-1981, 25-3-1983, and 19-10-1983:
The Revenue argued that the show cause notices issued on 30-6-1981 and 23-5-1983 were valid for reclassification and subsequent demand of differential duty. The Tribunal agreed, stating that the show cause notices were not invalidated by the absence of a specified amount of duty. The corrigendum dated 19-10-1983 merely corrected the earlier notices to include the amount of duty and the relevant legal provision. The Tribunal relied on the Delhi High Court's ruling in Hindustan Aluminium Corp. Ltd. v. Superintendent of Central Excise, which held that non-mention of the amount of demand does not render the show cause notice void.

4. Authority of the Assistant Collector to Reclassify Items and Demand Duty under Section 11A of the Central Excises and Salt Act, 1944:
The assessee contended that the Assistant Collector lacked the authority to reclassify items and demand duty under Section 11A. The Tribunal rejected this argument, citing multiple Supreme Court rulings, including Tata Iron & Steel Co. Ltd. v. Union of India and Elson Machines (P) Ltd. v. Collector of Central Excise, which upheld the Assistant Collector's authority to reclassify items and recover short-levied duty. The Tribunal also referred to the Karnataka High Court's decision in Gurupriya Tele Auto P. Ltd. v. Superintendent of Central Excise, which confirmed the Revenue's power to reopen classification and recover short-levied duty.

Conclusion:
The Tribunal dismissed the assessee's appeal, upholding the classification of "fasteners" under TI 52 and the demand for differential duty. The Tribunal allowed the Revenue's appeal, confirming the validity of the show cause notices and the Assistant Collector's authority to reclassify items and demand duty. The operative portion of the order was pronounced in the open court.