9911796707
TMI Blog1986 (3) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... bodies of containers of various dimensions which are supplied to customers in accordance with the orders placed on them in that respect. It is stated that these tin sheets were in an unfinished form and supplied to the customers, who would undertake further processing, manufacture and clear them on payment of duty. Such sheets, it is stated, were being classified by the petitioners as non-excisable components of metal containers and this classification was duly approved by the Central Excise authorities. The production and clearance, without payment of duty on these goods, was done under cover of normal factory documentation and was within the knowledge of the Central Excise officers. The Department approved the classification of these items as non-excisable separately on 30th November, 1972, 21st March, 1974 and 30th August, 1974, on the first date by the Asstt. Collector of Central Excise, Aligarh and on the last two dates by the Superintendent of Central Excise, Aligarh. The appellants were, therefore, surprised when a notice was issued to them on 23rd October, 1975, requiring them to show cause as to why duty should not be recovered from them under Rules 10/10A of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the basis for the demand is not substantiated but also because the Department was not at all clear in the case of the first show cause notice as to which rule could be invoked for raising such a demand. The first show cause notice raised the demand under Rules 10/10A of the Central Excise Rules 1944". When the appellants represented in the matter, it is claimed, a corrigendum was issued stating that the words Rules 10/10A" should be read as Rule 10A . The second show cause notice, however, was again issued under Rule 10. The appellants contend that in the light of the facts of their case, Rule 10A was not at all applicable. The only rule that could be invoked, if demand of duty was otherwise maintainable wa.s Rule 10. But this could not be done as demand for duty was time-barred. The appellants have, in support of their arguments on this point, cited the decision of the Supreme Court in the case of N.B. Sanjana, Assistant Collector of Central Excise, Bombay and Others v. The Elphinstone Spinning and Weaving Mills Co. Ltd. - 1978 E.L.T. (J 399) holding that Rule 10A cannot apply when a short levy is made through error or misconstruction on the part of an officer, as such a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their sheets were manufactured by machines manually operated and, therefore, even otherwise they would be liable to exemption under Notification No. 94/70, dated 1st May, 1970. 10. On behalf of the Department, Shri K.C.Sachar points out that as per classification list, the impugned goods were admittedly metal container components in the nature of bodies and bottoms. It is said that there is no evidence that these were unfinished or meant to be taken for calender. It is further stated that Notification No. 94/70 cannot be invoked by the appellants for claiming exemption as it has been held by the Assistant Collector in his adjudication order that power has been used while cutting the sheets to the size of metal containers. 11. Shri Sachar has further stated that the contention of the appellants that only bottoms and bodies have been cleared and tops are not there, is of no avail because tops can be made out of bottoms also. As regards the claim that these parts have paid duty as containers by Agra Tin Manufacturing Company, it is stated that appellants cannot transfer their duty liability to Agra Tin Manufacturing Company. 12. As regards the argument that the show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to subordinate authorities exercising quasi-judicial functions. In this particular case, there have been no such advice or directives by higher authorities. It would have been perfectly in order if the local Central Excise officers were to undertake further inquiries on the receipt of audit objection; and after further examination and necessary investigation, if they were to come to the conclusion on the basis of evidence collected that the goods in question were liable to duty or further duty, they would be well within their jurisdiction to issue a show cause notice to the assessee, explaining to him the grounds and the evidence on the basis of which the Excise has come to the tentative view that the assessee has not discharged his liability to duty. However, this, in the present matters, the Department has failed to do. The show cause notices are veritably based on audit objection only and no other reason is given for the Department changing its stand as regards the classification of goods. On this ground, the show cause notice is liable to be quashed. 15. We cannot help observing that this is a matter in which the Department has failed to undertake any investigation, not on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In paragraph 14 of the order it has been mentioned that classification lists themselves declared that the items were in the nature of cut-to-size sheets and for years together these were being cleared as such. But I would like to point out that (as seen from the copies of the classification lists filed by the appellants) the description in column 5 of these lists reads as metal container s components - bodies and bottom cut-to-size sheets . Therefore, the description had not been merely cut-to-size sheets but bodies and bottoms or cut-to-size sheets . But even so, the argument for the appellants had been that the so-called bodies and bottoms were also merely in the nature of sheets cut-to-different sizes, but without the further processes to be applied thereto as would have made them ready to use components of metal containers. Shri Bhatnagar mentioned that on such cut-to-size sheets the processes of beaming, stamping, flanging and folding will have to be carried out before they become ready for use as components of containers. He also mentioned that such processes could be carried out with the aid of power only, while the factory of the appellants was working without power. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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