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TMI Blog1986 (10) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... r 1-8-1983, under item 25(11) of the Central Excise Tariff. The Collector, however, in his adjudication classified them under item 68 as goods not elsewhere specified, even though similar manufacturers all over India were assessed under item 25(11). They explained to the Collector that contrary to his understanding, there had been no rolling of the duty paid strips, but only a cold forming of plain strips under shaped rolls to form new profiles. In the iron and steel industry, rolling always results in a reduction of the thickness of the rolled product in their case, the cold-rolled formed products are not reduced in thickness and in fact the object of the rolling is not reductions which is always the case with rolling, but the forming of new shapes, channels, angles etc. etc. The forming does not remove the goods, out of the heading of item 26AA or Heading 25, into Heading 68. These goods are used in the manufacture of structures, as purlins and similar applications. 3. They have been, said the Counsel, in constant correspondence with the central excise from the beginning of the manufacture in November, 1982. In fact, he pointed out that they wrote a letter on 8-10-1982 to the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he production of evidences desired by him, the Assistant Collector approved the classification list for assessment of the goods under item No. 25(11) as cold-rolled formed shapes and sections. Also an application for proforma credit for the input under Rule 56A was granted by the Assistant Collector for the duty paid on raw material. All this time, continued the learned Counsel, Mr. Bedi, their factory submitted RT12s and other documents and the central excise officers and their audit authorities visited the factory regularly. Therefore, everything that the factory did was known to the authorities at all times and nothing was hidden from them. 5. Suddenly out of the blue, officers of the Central Excise burst upon the factory in December, 1985 and told them that the cold formed shapes and sections manufactured by them were structural metal products classifiable under item 68. They seized the stocks lying with them totalling over 90 tonnes. However, after the usual formalities, the Collector passed his order dated 4-3-1986, but he did so without a show cause notice and on this said the learned Counsel, he had some important submissions to make. 6. It is true that they had dispens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by M/s. TIM Ltd., Madras. He also submitted that during the hearing before the Collector a list of 9 or 10 people in Bombay, Madras, Hyderabad, New Delhi and Haryana who were making similar goods but were not paying duty; but the Collector ignored it. 7. In an Order No. 85/85, dated 15-4-1985, the Assistant Collector of Central Excise and Customs division, Jaipur in the course of giving a decision on their request for proforma credit ruled that the goods manufactured by 1982 to 17-12-1983 were classifiable under old CET 26AA(ia) up to 31-7-1983 and from 1-8-1983, these were put in CET No. 25(11) as cold-rolled formed sections. He ended his adjudication by saying that proforma credit facility under rule 56A could not be granted to the party for past period. The Assistant Collector ruled that the proforma credit was not to be given simply because they had not obtained licences, etc., and that there had been no application for such credit and the lack of application had not been condoned. He said nothing about the goods not being entitled to proforma credit and evidently his rejection was for the past period and not for the future which in turn proves that he was satisfied tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucts; and in support of this, the learned SDR read some parts of the order-in-original to justify the extended limit. 11. We have no alternative but to set aside the demand of duty because it was not preceded by a notice demanding the duty thought to be short-levied. It is not permissible under the central excise law to waive the issue of a notice of demand and, in fact, there is no evidence that M/s. Unitech Metals waived the notice of demand. Their waiver was only of the show cause notice in respect of the seizure. The letter of 6-2-1986 which, the learned SDR said, would substitute a show cause notice under Rule 9(2), will not do so, because this letter is not a notice of demand but only a notice that it was proposed to raise a demand. A notice of demand under the central excise must set out not only the details for the demand but the grounds for the demand so that the affected party can marshal its defence properly. Especially in this case a notice was doubly imperative, because the Collector charged the party with fraudulence and suppression and claimed these as the cause for the short-levy, for which reason he set out to recover duty for five years, a limit that is permissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egram to the Central Board of Excise and Customs. Letters were written to the Board including the Chairman. 15. In a letter which bears no date, but which appears to have been signed by the Assistant Collector, Mr. Mehra, on 22-5-1984 in respect of their classification list claiming assessment under item 25(11), they were called for a personal hearing; they were asked to produce printed technical literature, sale invoices and to prove their claim that similar products in the country paid duty under item 25; they were asked to produce the names and addresses of such units. They were told in this letter that the description shown in the classification list was not in conformity with the goods actually manufactured and sold i.e. zeds, purlins and sleaves. 16. It appears that there was a letter (of which the date seems to be 2-2-1985) by which the Assistant Collector, Mr. P.K. Mehra, wrote to M/s. Unitech, granting them permission under Rule 56A in respect of HR coils/strips. However, he restricted the amount of proforma credit per metric tonne of the raw materials to a minimum of Rs. 330/-. The adjudication by the Assistant Collector that we have already referred to once before (o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssification list was not in conformity with the goods manufactured; the classification list described the goods as channels, zeds, U shape guide type etc. etc. To write as the Assistant Collector did, is to betray ignorance of the subject, because if he found that the goods were zed, purlins, sleaves and if the classification list talks of cold-rolled formed shapes and sections, then it is clear that the goods manufactured and sold are the same as the goods declared in the classification list, namely, cold rolled formed shapes, sections, channels, zeds, etc. 20. These products are eminently suitable for use as joists, purloins, roof-trusses, etc., in residential, commercial and industrial structures. They act as load carrying members, while at the same time providing useful surfaces like floor panels and roof decks installed without shoring or buttressing. They have versatile application by reason of their high strength to weight ratio and with a little cutting and drilling can fit almost any structural application. They seldom require any adaptation other than simply drilling and sizing to fit the part into the allotted place. It is not possible to agree that these are articles ..... X X X X Extracts X X X X X X X X Extracts X X X X
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