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TMI Blog1997 (9) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... 173G(1) [Proviso (ii)] to make a single debit entry by order dated 7-7-1995. However, by SCN dated 22-1-1997 they were asked to show cause as to why the earlier permission should not be withdrawn. After considering the reply to the show cause notice and the arguments submitted before him during the personal hearing held on 24-2-1997 the Commissioner passed the impugned order withdrawing the earlier permission on the ground that the same is not in Revenue s interest. 5. Appearing for the appellants Shri A.K. Jain, ld. Counsel strongly contended that the order withdrawing the permission was illegal apart from being beyond the jurisdiction of the Commissioner. He referred to a number of decisions of the Apex Court in support of his submissions. 6. Shri Jangir Singh, ld. JDR submitted that the Commissioner was very much within his power to withdraw the permission which was granted to the appellants earlier and there was no question of the said order being illegal or beyond jurisdiction of the Commissioner. JDR contended that Clause (ii) of proviso to Rule 173G(1) gave the proper officer a discretionary power to allow an assessee to make a consolidated debit in the Account Curren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances for withdrawal of permission has to be satisfied. Unlike Rule 196(1), Rule 173G(1) [Proviso (ii)] prescribed the circumstances under which permission is to be granted and as long as the said conditions obtained, no question of exercising the discretion to withdraw the permission already granted can arise. He relied on the Apex Court decision in L.I.C. of India v. Escorts Ltd. - 1993 (67) E.L.T. 618 (Tribunal) = AIR 1986 SC 1370 (Para 63) in support. He has also contended that the order of the Commissioner dated 28-2-1997 was a non-speaking one and could be set aside on that ground alone. 10. We have given due consideration ld. Counsel s arguments. The relevant portion of Rule 173G is extracted below : 173(G). Procedure to be followed by the assessee. - (1) Every assessee shall keep an account-current with the Commissioner separately for each excisable goods falling under different [Chapters of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986)], in such form and manner as the Commissioner may require, of the duties payable on the excisable goods and in particular such account (and also the account in Form RG 23, if the assessee is availing of the proced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds. An assessee has to maintain an Account-Current in triplicate and has to periodically make credit in such account-current by cash payment into the Treasury so as to keep the balance in such Account-Current sufficient to cover the duty due on the goods intended to be removed at any time and every such assessee has to pay the duty determined by him for each consignment by debit to such Account-Current before removal of the goods. To this requirement a Proviso has been added by which in certain circumstances a departure from the procedure prescribed to the main provision of Rule 173G(1) is permitted. The first clause of the proviso allows a certain leeway to the assessee inasmuch as when the duty on the goods consumed within the factory in a continuous process may be paid at the end of the factory day except in the case of cellulosic spun yarn and cotton yarn in which case the provision of Rule 49A would apply. In Clause (ii) of the proviso the proper officer has been empowered to allow an assessee to make a consolidated debit in the account-current at the end of the day towards payment of duty if the assessee had removed more than 3000 consignments in the previous calender year. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcise of such discretion imperative. The test for deciding whether the discretion is an unfettered one or is an imperative command has been laid down in various authoritative judgments of the Higher Courts. The Bombay High Court in K.H. Sajauddin v. Ratikant Nilkant - AIR 1959 Bombay 401 observed : Usually, the word `may is an enabling word ....... giving discretion to the person who is given the option to act in a particular manner mentioned in the section. But it is well recognised that the word `may in context can mean `shall . If the statutes authorise any specified persons to do acts for the benefit of others, the authority conferred is coupled with an obligation to discharge a duty by the statutes themselves; and in such a case, though the word used by the Legislature may be `may , the intention is to impose an obligation upon the authority to discharge his duty, with the result that the word `may in the context means `must or `shall . 14. Though it is true that the expression used in Clause (ii) of proviso to Rule 173G(1) is may , it will be observed that the discretionary power conferred on the proper officer by the said clause is to be exercised not for purposes o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DELHI Ms. Jyoti Balasundaram, Member (J) and Shri Shiben K. Dhar, Member (T) SHAKUN PRODUCTS Versus COLLECTOR OF CENTRAL EXCISE, KANPUR Final Order Nos. E/1300-1301/97-B1, dated 5-9-1997 in Appeal Nos. E/2126/89-B1 and E/2856/89-B1 Wiring harness, cable harness and handle bar harness - Wires/cables cut to length according to specifications and fitted with connectors and used in automobiles are classifiable under sub-heading 8544.00 of Central Excise Tariff - HSN Explanatory Notes under Chapter 85 and Note 2(a) to Section XVI ibid - Trade Notice No. 255/88, dated 13-12-1988 of Vadodara Collectorate relied on. [para 4] Manufacture - Fitting wires and cables with connectors and putting in a casing to produce wire/cable harness amounts to manufacture - Section 2(f) of the Central Excise Act, 1944. [para 7] Manufacture - Change in Tariff Heading is not a sine qua non for manufacture - Emergence of a new, distinct commercial commodity with different name, character and use amounts to manufacture notwithstanding the fact that manufactured products fall for classification under the same Tariff Heading or sub-heading - Section 2(f) of the Central Excise Act, 1944. [par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w Delhi are that the assessees who are manufacturers of Main Cable Harness , Handle Bar Harness , H.T. Cable Assembly etc., specifically designed for scooters of M/s. LML Ltd., submitted classification list for the same effective from 1-4-1986 under sub-heading 8714.00 as parts of scooters which was approved by the Department and duty was paid and RT 12 returns were also finalised through out the financial year 1986-87. The assessees filed classification list No. 153/86-87 effective from 1-4-1987 for approval of the items under the same sub-heading and this list was approved only provisionally. A show cause notice dated 25-9-1987 was issued proposing re-classification under sub-heading 8544.00 as cables and proposing recovery of differential duty under Section 11A of the Central Excise Act, 1944. The Assistant Collector approved the classification list under sub-heading 8544.00 w.e.f. 1-4-1986 and confirmed a demand of differential duty of Rs. 3,62,442.87 for the period from 4-4-1986 (the date of filing of classification list No. 11/86-87) to 31-8-1987. He also directed the assessees to pay the differential duty for the period from 1-9-1987 till the date of adjudication ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that too, for scooter models Alpha, T-5 and NV because of their specific lengths and connectors which are required for these models only. However, since the goods in question are an assembly of insulated wires and cables of specified lengths fitted with connectors and are specifically covered under sub-heading 8544.00, they fall for classification under this Heading on an application of Rule 3(a) of the Rules for the Interpretation of the Schedule to the Central Excise Tariff which provides that when goods are prima facie classifiable under two or more Headings, the Heading which provides the most specific description shall be preferred to Headings providing a more general description. Further since the items in dispute are in themselves goods included in Chapter 85 (sub-heading 8544.00) they are to be classified in that Heading, by virtue of Note 2(a) to Section XVI of the Schedule to the Tariff which provides that, subject to Note 1 to Section XVI, Note 1 to Chapter 84 and Note 1 to Chapter 85, parts of machines which are goods included in any of the Headings Chapter 84 or 85 ..... are in all cases to be classified in their respective Headings. Note 1 to Section XVI, Note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CE ; 5. 1988 (36) E.L.T. 283 (Bom.) - Sealol Hindustan Ltd. v. UOI ; 6. 1988 (19) ECR 52 - Precision Fasteners Ltd. v. CCE, Bombay; 7. 1995 (77) E.L.T. 278 (S.C.) - Union of India v. JMA Industries . are distinguishable. The cases at Sl. Nos. 1 to 4 and 6 to 7 were decided in the context of the Schedule to the erstwhile Central Excise Tariff as it stood before the introduction of the new Tariff in 1986 and are, therefore, not relevant in the present context where we are concerned with the classification under the new Tariff containing Section Notes and Chapter Notes and where HSN Explanatory Notes can be looked into for the purpose of arriving at the correct classification. The case law at Sl. No. 5 above was a decision in the context of the new Tariff, but is also distinguishable - the High Court applied Note 2(b) to Section XVI which states that parts suitable for use solely or principally with the particular kind of machine or number of machines falling within the same Headings are to be classified with the machines of that kind, and held that mechanical seals specifically designed for centrifugal pumps or compressors fell under Heading 84.10(1) or 84.11(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisionally and came to be finalised with the issue of the adjudication order assessing the goods under sub-heading 8544.00, after the issue of show cause notice. The combined show cause notice, in addition to proposing re-classification of the goods/modification of the classification list also simultaneously proposes recovery of differential duty on goods already cleared prior to the issue of the show cause notice viz. upto 31-8-1987. The Assistant Collector by the order of adjudication has approved classification of the items under sub-heading 8544.00, finalised the classification list No. 153/86-87 which was earlier provisionally approved and then, in the same order confirmed the demand of differential duty. It is not as if the demand has preceded the adjustment of duty after final assessment [the date of adjustment of duty after final assessment thereof is the relevant date for computing time limit for issue of demand notice under Section 11A(1) as defined in 11A(3)(ii)(b)]. The judgment of the Hon ble Bombay High Court in the case of Union of India v. Godrej and Boyce Manufacturing Co. reported in 1989 (43) E.L.T. 225 (Bom.) relied upon by the learned Counsel for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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