9911796707
TMI Blog2001 (5) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter came up before the Tribunal, the quantification was done and the C.C.E., Trichy by his letter dated 14-2-2000 addressed to Senior Departmental Representative, which is placed on record, indicating the said amount. 3. The short issue involved in this appeal is as to whether the goods described in the classification list dated 16-3-1995 is to be considered as boiler for classification purpose under Chapter Heading 8402.10 attracting 10% rate of duty as claimed by the appellants or parts of boiler attracting higher rate of duty at 15%. 4. In response to the show cause notices, the appellants had filed a detailed affidavit filed by one Dr. V. Gopalakrishnan, General Manager of the appellant company who holds a Bachelor s degree in Mechanical Engineering from IIT, Madras, Master s degree in Design and Production of Thermal Plant Equipment from Regional Engg. College, Trichy and Ph.D from Bharathidasan University, Trichy in Classification of Indian coals . He had joined appellant company in 1969 as an Engineer Trainee and acquired wide experience in Computer Aided Design and later rose to the level of heading the Research Development wing of appellant factory. He has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Coastal Gases Chemicals Pvt. Ltd. v. A.C.C.E., 1997 (92) E.L.T. 460 have concluded in para 6 as follows :- 6. From the above discussion, we are clear in our mind that Samrat International Pvt. Ltd. envisages payment of duty on provisional basis pending decision of classification list or price list. For these payments to be treated as provisional, procedure contemplated by Rule 9B is not to be followed. Therefore, we are of the considered view that the observation made by the Larger Bench of five Members that there should be material on record to show that procedure laid down in Rule 9B was followed for the purpose of showing that the assessments are provisional, cannot hold good in the case of payments of duty effected pending finalisation of classification list or price list. Subject to this clarification, we agree with the observations and findings arrived at by the said Bench in Misc. Order No. 47/2000-A. 8. On the basis of the above ruling, ld. Advocate appearing for the appellants submits that since there is no dispute that the assessment on price list and RT 12 returns had been kept provisionally, the authorities ought to have taken up the issue of finalisation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less all the auxiliary parts from the other nine plants are supplied and assembled, a boiler does not come into existence even in terms of explanatory notes and chapter note and section note. Therefore, he submits that merely because expert s affidavit has not been countered with rebuttal evidence from experts, that by itself will not make the order bad. Therefore, he submits that on merits, the order given by the Commissioner and the AC for reclassification of the goods as parts of boiler is a correct one and a justified order. He submits that the ratio of the WRB judgment rendered in Flat Products Equipments (I) Ltd. (supra) is clearly distinguishable, as it pertained to parts of machines and did not deal with complete machinery. In the present case, what was cleared from the Trichy plant was not a complete machine at all, as the other nine units of appellants factory in various parts of the country had to supply auxiliary parts which were assembled to bring the boiler come into existence. The most crucial part is chimney which is an exhaust which has to be treated as part of boiler . Otherwise, boiler cannot function. The functionality of the boiler is dependent upon the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional (P) Ltd. v. Collector of Central Excise, 1992 (58) E.L.T. 561 (S.C.), the assessee was clearing the goods between 1st April, 1985 to 3rd June, 1985 by determining the duty himself and debiting the amount of duty in his personal ledger account while the classification list was pending approval by the concerned authority. During the said period it was the admitted case of parties that the procedure contemplated by Rule 9B of the Rules was not followed. In such a situation, their Lordships of the Supreme Court observed : The amount of duty paid by him was obviously provisional and subject to the result of the final approval by the officer concerned. (emphasis added) During the said period from 1st April to 3rd June, 1985, assessee removed the goods on payment of duty determined by himself. Such clearance and payment of duty has been held by their Lordships as provisional. Consequently, their Lordships went on to state that the clearance of goods made during the period must be taken as having been made in accordance with the procedure for provisional assessment. In other words, even if the procedure contemplated by Rule 9B is not complied with, it will be deemed that the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not lead to the conclusion that payment of duty can be provisional only when the procedure prescribed by Rule 9B is strictly followed. 6. From the above discussion, we are clear in our mind that Samrat International Pvt. Ltd. envisages payment of duty on provisional basis pending decision of classification list or price list. For these payments to be treated as provisional, procedure contemplated by Rule 9B is not to be followed. Therefore, we are of the considered view that the observation made by the Larger Bench of five Members that there should be material on record to show that procedure laid down in Rule 9B was followed for the purpose of showing that the assessments are provisional, cannot hold good in the case of payments of duty effected pending finalisation of classification list or price list. Subject to this clarification, we agree with the observations and findings arrived at by the said Bench in Misc. Order No. 47/2000-A. 7. The issue referred is answered in the above terms. 14. In terms of the above ratio, the AC should have finalised the show cause notices, only after assessments were finalished at the first instance. This is the point which has been emphas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice also after finalisation of the provisional assessment. Applying the ratio of this judgment, we find that nothing prevent the Revenue from the material contained in the impugned notice to be used as independent material to support the finalisation of assessment, after making this material known to the present appellants in writing and after considering their response thereto both in writing and on personal hearing, therefore, no prejudice would be caused to them on this ground. 22. In the case of Serai Kella Glass Works Pvt. Ltd. v. C.C.E., the Hon ble Apex Court had similarly directed that no show cause notice under Section 11A of the Central Excise Act is required to be issued until the pending provisional assessments are finalized. Duty short levied, non levied or erroneously refunded, if found after final assessment, only then the proceedings under Section 11A can be taken up after issuing a show cause notice. Further, the Hon ble Apex Court had also clarified that where such a show cause notice is issued under Section 11A of the Central Excise Act after finalisation of the assessment, the period of limitation will run from the date of adjustment of duty consequent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion of penalty as well as the payment of differential duty 24. The Hon ble High Court at Madras, in whose jurisdiction this Tribunal sits, has in its judgment in the case of Ponds (India) Ltd. v. A.C.C.E. (supra) similarly ruled that Section 11A is invokable only after finalisation of assessment in which finalisation, the various valuation dispute as per the price-list/declaration must be settled first under Rule 9(b)(5). 25. A similar decision has been taken by this Tribunal in the case of Modi Rubber Ltd. v. C.C.E. (supra) and the Tribunal s Final Order No. 386/93-A in the case of C.C.E. v. Ponds (India) Ltd. Others. 26. In view of these decisions discussed above, we are of the considered opinion that this show cause notice dated 25-9-1987 was not issued under any legal authority as the provisional assessments for this period concerning the assessee had not been finalised. Being pre-maturely issued, we find that the said show cause notice requires to be set aside. 27. Since the said show cause notice is required to be set aside, therefore, the attendant order-in-original impugned before us also cannot be allowed to survive. 28. This leaves us to the last issue name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders as follows :- (a) The show cause notice dated 25-9-1987 and the attendant order-in-original impugned before us are set aside; (b) The Jurisdictional Assistant Commissioner is directed to expeditiously address himself to the finalisation of the provisional assessments as already detailed above; (c) In view of the aforesaid Judicial decisions, we find that the Revenue shall be at liberty to examine the issue of any short levy, non-levy and consequent penal liability only after the finalisation of the assessment, etc. as per law. The appeal is disposed of accordingly. 15. In view of above two judgments, the impugned orders are required to be set aside for de novo consideration. 16. The aspect pertaining to classification also in our humble, opinion also requires to be relooked for the reason that in the present case, appellants had produced an affidavit of an expert. The expert in his affidavit has extracted large number of technical literature to point out that what was removed from the Trichy plant was nothing but a boiler and other items which were supplied by the nine units were auxiliary parts which were having separate chapter headings for its ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Schedule, it will be against the very principle of classification to deny it parentage and consign it to an orphanage of the residuary clause. (Emphasis supplied). 17. At this stage, ld. Additional Central Govt. Standing Counsel intervened to say that the testimony or the affidavit filed by the person is a self-interested testimony, inasmuch the affidavit has been filed by their own expert, who is the General Manager. This is countered by the ld. Counsel for the appellants by pointing out to page 241 of the paper book wherein the affidavit of an independent expert has also been filed. 18. In view of the affidavit filed by the appellants expert as well as by an independent affidavit filed by another expert and in view of the Apex Court s judgment, the original authority is required to test this evidence before re-classifying the goods as parts of boiler as per their contention. Therefore, we are of the considered opinion that even on the aspect of classification, the matter requires to be re-adjudicated in the light of detailed submissions made by the appellants. Revenue is at liberty to counter it by rebuttal evidence. While doing so, an opportunity has to be given to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
