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TMI Blog1988 (1) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... Dispersol A i) Cationic softener and Dispersol VLX are manufactured by the appellants at its factory; Appellant pays duty thereon. (ii) Dispersol A is manufactured at the Appellant s factory but no duty is paid thereon as the appellant claims exemption under Serial No. 4 of the Notification 101/66. 2. Perminal KBI (wetting out agent) i) TRO B ii) Calsolene Oil GS i) TRO B is manufactured by the Appellant at its factory but no duty is paid thereon as the appellant claims exemption thereon under Sr. No. 1 of Notification No. 101/66. ii) Calsolene is manufactured by the appellant at its factory. The appellant pays duty thereon. 3. Lissapol PS Cone (wetting out agent) i) Gilapol P ii) TRO B iii) Lissapol CW i) Gilapol P is manufactured by the appellant at its factory. The appellant pays duty thereon. ii) TRO B and Lissapol CW are manufactured at its factory but no duty is paid thereon as the appellant claims exemption under Sr. No. 1 of Notification 101/66 4. Lubrol VA (Emulsifier) i) Lissapol NW ii) Dispersol A i) Lissapol NX is manufactured by the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the open market on or after the 20th day of January, 1968. 4. Emulsifiers, wetting out agents, softeners and other like preparations intended for use in any industrial process. If in respect of surface active agents used in the manufacture of such emulsifiers, wetting out agents, softeners and other like preparations the appropriate amount of duty of excise or the additional duty under Section 2A of the Indian Tariff Act, 1934 (32 of 1934), has already been paid or where such surface-active agents are purchased from the open market on or after the 20th day of January, 1968. 2. This notification shall, in relation to sulphonated caster oil, commonly known as Turkey red oil (specified as serial No.l in the Table above) be deemed to have taken effect from the 1st day of March, 1966. 3. Para 2 added Notification No. l72/66-C.E. shall be deemed always to have been added. (Notification No. 101/66-C.E. dated 17-6-1966 as amended by Notifications No. 137/66-C.E. dated 10-9-66; No. 172/66-C.E. dated 5-11-1966 No. 4/68-C.E. dated 20-1-1968 and No. 182/75-C.E. dated 30-8-1975). The appellants had been manufacturing these goods in their factory for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and there was no mention in the show cause notice that the duty had been demanded for the reason of provisional approval of classification lists. He pleaded that the findings of the lower authority holding that the assessments were provisional is contrary to the facts in as much as the provisional duty procedure set out in Rule 9(2) had not been followed and unless this was done, the assessment could not considered provisional. He stated that the Assistant Collector s findings holding the assessment as provisional were also in violation of the principle of natural justice as the appellants had not been asked to explain their position in regard to the provisional nature of the assessments as held by the lower authority. He pleaded that the classification lists were approved by the Assistant Collector subject to the outcome of the test. He pleaded that if, at all, the approval of the classification lists could be considered as provisional it is only for the purpose of the test for classification of goods under T.I. 15AA and it could not be considered as provisional for all purposes. He stated as early as on 17.6.71, final approval had been granted to three out of the five products n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification No. 101/66 or on which duty had been paid were declared in the classification list. On merits, he pleaded, even the exempted organic surface agents utilised in the manufacture of the goods in question should be deemed to have discharged the appropriate duty for the purpose of the notification. 4. The learned J.D.R. for the Department, Smt. Chander, drew our attention to some of the classification lists where she pointed out that these lists had been approved provisionally except one which had been approved finally. She pointed out that the endorsement on the price list dated 1.12.79 was subject to the eligibility of the notification. She pleaded that the appellants themselves in their letter dated 5.3.1981 stated that should however it is decided at a later date that the products attract Central Excise duty we shall pay the same with retrospective effect . She pleaded that this undertaking by the appellants was a blanket undertaking not with reference to the approval granted subject to the testing of the goods alone. She pleaded, no doubt, the lower authority in the show cause notice issued, has invoked Rule 11A but the invoking of a wrong rule by itself does not vitia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the provisions of the law and the finality to the approval is required to be given at the shortest possible time both in the interest of Revenue and in fairness to the assessee unless there are some very compelling reasons for keeping the assessment open. Here, we find, that the approval of the classification lists by the authorities were indicated as provisional for one reason or the other but no sense or urgency has been shown by the concerned officer to give a finality to the assessment by proving the classification lists finally lifting the burden of the endorsements made on the classification lists. If some test was required to be done it should have been carried out expeditiously or if the eligibility to the notification was under consideration the necessary orders should have been issued after giving the appellants opportunity in the matter. What, in fact, happened was that the appellants were allowed to make clearances year after year and the RT 12 returns were also accepted from month to month without taking the desired action. Suddenly the authorities woke up and issued show cause notices on the ground that benefit of notification was not available. In fact it was only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the appellants had utilised surface active agents manufactured by them as ingredients for the manufacture of the said goods and it is not the appellants case that they had utilised the ingredients bought out from the market. In respect of some of the ingredients as mentioned by the appellants they had paid duty under 15AA while in respect of the others no duty has been paid as these had been cleared by them at nil duty in terms of Notification No. 101/66. So far as the ingredients on which the duty was paid by the appellants are concerned there is no point of dispute. However, point made by Revenue is that inasmuch as some of the inputs falling under 15AA had been cleared at nil rate of duty it could not be said that appropriate duty had been paid in respect of these and since payment of appropriate rate of duty on the inputs falling under 15AA is a condition precedent for availing the benefit of Notification 101/66, this benefit in respect of the said goods covered by Serial No. of the notification is not available. The appellants, however, have pleaded that even though the goods had been cleared at nil rate of duty, these should be considered as goods on which appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of item 26-AA other than rails and sleeper bars specified in serial No. 3. In the proviso thereto it is stated as follows :- Provided that where the products mentioned in the Table are made from steel ingots, falling under item No. 26 of the aforesaid Schedule, which have been cleared from the factory, prior to the 18th day of June, 1977, on payment of duty at the appropriate rate, the duty specified in the corresponding entries in column (3) of the Table shall be reduced by two hundred rupees per metric tonne : Provided further that where the products mentioned in the Table, other than bars and rods, falling under sub-item (ia) of item No. 26-AA referred to in serial No. 3 of the Table, are made from semifinished steel on which duty at the appropriate rate has already been paid, or from steel ingots falling under item No. 26 of the aforesaid Schedule which are cleared from the factory on or after the 18th day of June, 1977 on payment of duty, the duty specified in the corresponding entries in column (3) of the Table shall be reduced by three hundred and thirty rupees per metric tonne : Provided also that where the duty paid on steel ingots or semi-finished steel, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso to each of the Notifications No. 152/77-C.E. and 153/77-C.E. as amended. Finally the Court formulated the question for decision as under : In view of the stand taken by the parties before us contentions are limited to the interpretation that they put to the words used in the notification dated 1-3-1973, namely, on which the appropriate duty of excise leviable .... has already been paid. The Hon ble Court after examining various issues took note of judgment in the case of N.B. Sanjana v. The Elphinstone Spinning Weaving Mills Company Ltd. [1978 E.L.T. (3 399) = A.I.R. 1971 S.C. 2039, E.C.R. C 368 SJ] and observed as under : In yet another case the very words with which we are concerned fell for interpretation before Supreme Court in the case of N.B. Sanjana. Recovery of duties or charges short-levied, or erroneously refunded - When duties or charges have been short-levied, through inadvertance, error, collusion or mis-construction on the part of an officer, or through misstatement as to the quantity, description of value of such goods on the part of the owner, or when any such duty or charge, after having been levied has been owing to any such cause, erroneousl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gots and even in the hands of the Tisco who may have the liability to pay duty on the scraps, since the scraps answered the requirement of the description in the said notification, no duty was payable by them on the ingots. In this background therefore we find that the wording used in the notification before us are similar to the wording of Notification No. 66/73 in the case before the Hon ble High Court. Ingots were exempt from the payment of duty if these were manufactured out of fresh unused steel melting scraps on which appropriate rate of duty of excise had been paid. In the case before them, the fresh unused melting scrap was also exempt from the duty. The Hon ble Court has held that the use of scrap cleared at nil rate of duty did not dis-entitle the ingots to the benefit of Notification 66/73 and have held, as mentioned above, appropriate payment of duty should be taken to mean duty that ought to have been paid or contracted to have been paid. Since such duty in terms of exemption notification is nil these goods cleared without payment of any duty therefore can be taken to be duty paid goods. In that view of the matter, therefore the appellants are entitled to the benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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