1992 (9) TMI 217 - AT - Central Excise

Revision/Review by Board or Collector of orders passed by subordinate adjudicating authorities - Limitation

Summary

Issues Involved:
1. Classification of the product.
2. Limitation period for review under Section 35E(3) of the Central Excises & Salt Act, 1944.
3. Retrospective application of the amended limitation period.

Detailed Analysis:

1. Classification of the Product:
The respondents filed a classification list for their products, alginic acid and sodium alginate, claiming classification under Item 68 CET, which covers "goods not elsewhere specified." Upon testing, the product was found to have a molecular weight of over 3000, leading the Department to tentatively classify it under Item 15A(1) CET as plastics. However, the Assistant Collector concluded that the product could not be considered a high polymer based on its molecular weight and agreed with the respondents' classification under Item 68. This decision was dated 16-6-1983.

2. Limitation Period for Review under Section 35E(3):
The Collector of Central Excise, Ahmedabad, directed a review of the Assistant Collector's order under Section 35E(2) of the Central Excises & Salt Act, 1944. This direction was issued on 27-9-1984. The Collector (Appeals) held that while the application succeeded on merits, it failed on the aspect of limitation. The Finance Act of 1984, effective from 11-5-1984, reduced the limitation period from two years to one year. The Collector (Appeals) observed that the Collector's order should have been passed by 15-6-1984 to be within the one-year limitation period.

3. Retrospective Application of the Amended Limitation Period:
The primary contention was whether the amended limitation period of one year applied retrospectively to orders passed before the amendment. The Tribunal in the case of Collector of Central Excise, Baroda v. Sarabhai Chemicals had held that the limitation period of two years was applicable for orders passed before the amendment date of 11-5-1984. The Tribunal noted that statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested. The Supreme Court's decision in Garikapati Veeraya v. N. Subbiah Choudhary emphasized that the right of appeal is a vested right and can only be taken away by a subsequent enactment if it expressly provides for retrospective effect.

Separate Judgments:

Majority Opinion:
The majority held that the Collector (Appeals) was in error in dismissing the application on the grounds of limitation. The Tribunal followed the Supreme Court's principle that the right of appeal is a vested right and cannot be taken away without express provision for retrospective effect. Therefore, the two-year limitation period was applicable to the Collector's order dated 16-6-1983.

Dissenting Opinion (S.L. Peeran, Member (J)):
The dissenting opinion agreed with the Collector (Appeals) that the amended limitation period of one year applied since the amendment came into effect before the expiry of the original two-year period. The dissent emphasized that the Collector still had 35 days after the amendment to pass the order, which was sufficient time.

Third Member's Opinion (G.P. Agarwal, Member (J)):
The third member concluded that the amended one-year limitation period applied unless the remaining time was impractical for the Collector to exercise his powers. In this case, the 35 days available were deemed sufficient, and the appeal was dismissed as time-barred.

Final Bench Order:
The final order, based on the majority decision, upheld the Collector (Appeals)'s order on the grounds of limitation. The appeal was rejected, and the cross-objection was disposed of accordingly.

Conclusion:
The Tribunal's final decision was that the amended one-year limitation period applied, and the Collector's direction for review was time-barred as it was issued beyond the permissible period. The appeal was dismissed, affirming the Collector (Appeals)'s decision.