TMI Blog1993 (3) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... rrectly classifiable under sub-heading 1702.19 attracting higher rate of duty. After considering the reply of the respondents and hearing them in the matter, the Assistant Collector held that the goods were correctly classifiable under sub-heading 1702.19. The appeal against this order was allowed by Collector (Appeals) by the impugned order on the reasoning that the order of the Assistant Collector modifying the classification is in the nature of an order reviewing the earlier order approving the classification list. The Collector observed that once the classification list is finally approved, it can be modified/reviewed only by way of exercise review powers by the Collector under Section 35E of the Central Excises and Salt Act, 1944. 2. Appearing for the appellant Collector, the learned Departmental Representative Shri J.N. Nair contended that the Collector (Appeals) was in error in holding that the Assistant Collector is not empowered to modify an approved classification. The learned Departmental Representative urged that as per sub-rule 5 of Rule 173B when the dispute about the rate of duty has been finalised or for any other reasons effecting rate of duty a modification of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istant Collector of Central Excise, reported in 1991 (55) E.L.T. 178 (Kar.) to say that approval once given to classification list cannot be recalled by the Department. The learned Counsel pointed out that in this case the Karnataka High Court had taken note of the Supreme Court decision in Elson Machines Pvt. Ltd. cited by the learned Departmental Representative and had distinguished it. It was further urged by the learned Counsel that in this case the show cause notice was not one issued under Section 11A of Central Excises and Salt Act, 1944 and, therefore, the decisions of the Supreme Court and the High Courts relating to that Section are not applicable to the facts of the respondents case. 3. The submissions made by both the sides have been carefully considered. The Collector (Appeals) has held as follows in his order :- The Assistant Collector s order dated 29-10-1991 is having the effect of reviewing/modifying the classification lists No. 7/89 and 15/89 which were finally approved by him. The show cause notice dated 11-3-1991 on which the Assistant Collector has modified the classification list is not a notice in terms of Section 11-A, as the same does not speak about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is only the classification list as approved which could be acted upon, and by invoking Section 11A, a different stand cannot be taken by the issue of a show cause notice. In dealing with the powers of Excise authorities to collecting duty, it was held by the Supreme Court in Elson Machines Pvt. Ltd. v. Collector of Central Excise [1988 (38) E.L.T. 571] as follows :- The next submission on behalf of the appellant is that the classification lists had been approved earlier and the Excise authority was estopped from taking a different view. Plainly there can be no estoppel against the law. The claim raised before us is a claim based on the legal effect of a provision of law, and therefore, this contention must be rejected." In Southern Steel Ltd., Hyderabad v. Union of India and Others [1979 (4) E.L.T. 402], the High Court of Andhra Pradesh held as follows :- It is also true that the mere fact that the authorities had not questioned the position taken up by the petitioner does not prevent them from levying duty wherever they came to the conclusion that the description in the classification list is not correct and according to the correct description duty is leviable . Learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court. These decisions had not been cited before the Hon ble Karnataka High Court. In the result, the order-in-appeal is not sustainable and is set aside. The appeal is allowed. 5. [Contra per : S.L. Peeran, Member (J)]. -I have gone through the order written by my learned brother Shri K.S. Venkataramani, Member (T) but I could not persuade myself to agree to his findings. Hence I am recording my separate order. 6. In the main order the facts of the case and pleading has been recorded. The simple question raised in this case is as to whether the approved classification list can be modified by the Asstt. Collector without invoking Section 11A of the Act and when resort to provisions of Section 35E of the Act has not been done by filing a review petition. There can be no two opinions about the powers of the department to raise demand for short levy under Section 11A of the Act but the same has to be done only under certain conditions. As has been held by the Division Bench of me Hon ble Delhi High Court in the case of J.K. Synthetics Ltd. v. U.O.I. and Others, reported in 1981 (8) E.L.T. 328; an authority can depart from his earlier stand only for cogent reasons, such as, fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Collector for which the Exdse Authorities must take recourse to some other provisions of the Act, that is appeal procedure. 42. The dedsion of the Madras High Court and Delhi High Court on which reliance was placed on behalf of the petitioner, is correct and I respectfully agree with such view. Of course there is no estoppel applicable to excise matters but it is well settled that the revenue cannot change its opinion at all at its sweet will. The department should not be permitted to take different stand that there is no good or cogent reason for the change of the view. If the facts are different or if further and fresh facts are brought on record or if the process of manufacture has changed or if the relevant entries in the Tariff have undergone a modification or if subsequent to the earlier decision there has been the pronouncement of a High Court or the Supreme Court which necessitates reconsideration of the issue, in that event, undoubtedly the department have power to take a different view of the matter. But in the instant case, the classification list was approved after chemical examination of the material and after going through the matters and specifically the change c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported in 1978 (2) E.L.T. (J 399) (S.C.) and Shri D.R. Kohli v. Atul Products - reported in 1985 (20) E.L.T. 212 (S.C.) where the case of short levy and not of a case of review. The observations made by the Court in Paras 11 and 12 are noted herein below : 11. It was contended by the appellant that once the classification list had been approved, the order granting the approval could not be reviewed by the same authority in the absence of any power of review expressly conferred upon such authority. In such a case, according to the counsel for the appellant, there was no question of short-levy or non-levy and therefore Section 11A was not attracted. We have already held that having regard to the judgments of the Supreme Court, in such a case provisions of Section 11A will be attracted and even where there is nil assessment, it will be a case of short levy. We have no doubt that in the instant case nothing more was sought to be done except recovery of excise duty short levied. The withdrawal of the classification list by the respondents was only for the purpose of deleting that part of the approval whereby nil duty was assessed giving to the appellant the benefit of exemption. No o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer regarding exemption from payment of excise duty that, it became necessary to modify the order of approval. In our view what is sought to be done is not to review the classification list but merely to correct the endorsement of the proper officer entending to the goods manufactured the benefit of exemption under the notification dated 19th June, 1980 as amended from time to time. The mistake was only in relation to the applicability of the exemption notification and not to the classification of the goods. In such a case, it cannot be said that the classification list approved under Rule 173B was sought to be reviewed. In effect it was intended to correct the error subsequently discovered by the authorities, which disentitled the appellant from claiming exemption from payment of exdse duty. If by the order impugned, the authority intended to make any alteration in the description of the goods, or the tariff entry under which the goods fell, perhaps the argument mat it amounted to a review of the classification list may have force. In the instant case accepting the declaration made by the appellant as regards the description of goods manufactured, and the tariff item under wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conclusion that they do not have the necessary powers under said sub-rule (5) of Rule 173B. Citations on both sides in favour or against the aforesaid proposition have been made in the respective orders passed by the learned brothers. It is apparent from those citations that there is a conflict of views in so far as various High Courts Judgments are concerned. From the citations given in the two orders of the learned brothers, it appears that Andhra Pradesh High Court in the case of Southern Steel Ltd., Hyderabad [1979 (4) E.L.T. (J 402)] and Madras High Court in the case of T.I. Miller, reported in 1991 (53) E.L.T. 214 (Mad.) have taken the view that the classification lists can be reopened and there is nothing in law to force the departmental authorities for all times to stick to a particular view once such a view had been taken. Madras High Court in coming to its conclusion has relied on Supreme Court s decision in Elson Machines [1988 (38) E.L.T. 171]. On the other hand, Calcutta High Court in Nayak Associates [1991 (55) E.L.T. 189], Delhi High Court in Ajanta Iron Steel Co. [1986 ) E.L.T. 318 (Del.)], Patna High Court in the case of Hindustan Malleables Forgings [199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce it was not necessary to do so in view of its findings on merits of the case (see last two sentences of para 6 at page 445). (iii) Similarly Brother Peeran s reliance on 1990 (48) E.L.T. (A63) (Supreme Court s observation on Collector s appeal against Tribunal) Order No. 741/87-B1 dated 30-11-1987, in my view is not correct. This is apparent from the following emphasised portion of Supreme Court s order quoted at page A 63:- We have considered the order/or judgment of the Tribunal, without expressing any opinion on the scope of the jurisdiction under Section 11A (old Rule 10) of the Central Excises Salt Act, 1944 in the facts and circumstances of this case, the Tribunal came to the correct conclusion. This order does not call for interference. The appeal is accordingly dismissed. [Emphasis supplied by me] 11. Approval of a rate of duty in a classification list is generally a question of interpretation of the tariff description of an item or an exemption notification pertaining to the goods in question. It is, therefore, generally a question of law in so far as approval of classification list by an authority is concerned. 12. Based on the aforesaid general principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said judgment it is observed that Rule 173B does not appear to have been brought to the notice of the High Court. It is also observed that in para 42 of the said Report the High Court is of the view that the department can take a different view for good or cogent reason that is if the facts are different or if further facts are brought on record or if, the process of manufacture has changed or if the relevant entries in the Tariff have undergone a modification or if subsequent to the earlier decision there had been the pronouncement of a High Court or the Supreme Court which necessitates reconsideration of the issue. The High Court found in the facts and circumstances of the case before it, that no such reason or ground was involved necessitating a change in the view of the department. Can this be said so in the present cases is the question which naturally arises. Allegation in the show cause notice, as extracted above, is that the product described by the respondent as Glucose Syrup (R.C.) was commercial Glucose and, therefore, it was classifiable under sub-heading 1702.19. This is a fresh fact which appears to have been brought on record by way of an allegation by the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t authority that a classification can be reopened under sub-rule (5) of Rule 173B. It may also be mentioned at this stage that any modification in the earlier approved classification lists will only be effective from the date of issue of the show cause notice if no demand of duty is involved. In case, demand of duty on account of wrong rate of duty is proposed to be made provisions of Section 11A shall have effect. This has been made clear in Gurumukh Singh s case, supra by the Tribunal. 16. Accordingly, I answer the point referred to me as follows :- The lower authorities had the power in the facts and circumstances of this case to reopen the approved classification list under Rule 173B(5) of the Central Excise Rules. 17. While I answer to question referred to me as above, on the assumption made by both the Ld. Members that a classification list had been earlier approved, I am not sure whether it was actually approved unconditionally going by the facts, as disclosed in the order-in-original. Following date chart of events appears to indicate what I have said above :- Date Event (1) 28-12-1989 Classification list 7/89 filed by the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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