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TMI Blog1984 (4) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... se. Later on, on 15-2-1977, the Assistant Collector issued a show cause notice to Bhor calling upon them to show cause why the aforesaid films should not be reclassified as excisable under Item No. 15A(2) of the Central Excise Tariff Schedule and why duty should not be recovered from them thereafter as well as in respect of past clearances. The notice invoked Central Excise Rule 10 read with Rule 173-J. A corrigendum to the notice was issued on 23-2-1977 substituting Rule 10-A in the place of Rule 10. Bhor contested the notice by saying that the product was not finished PVC film as known to the market, and the classification approval given on 9-12-1975 could not be revised when even the Central Board of Excise Customs could not do so because the notice was beyond the period of one year laid down in Section 35-A of the Central Excises and Salt Act. Bhor also challenged the legality of the proceedings in pursuance of the notices issued under Rule 10/10A even after the deletion of these Rules on 6-8-1977. They also cited a decision dated 14-1-1974 of the then Appellate Collector holding the very product as crude films/sheets as not marketable and falling outside Item 15A(2), CET. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture of adhesive tapes, insulation tapes and jute laminates as against leather cloth earlier). This factor could not result in change in the classification or excisability of the product. The Department had not adduced any evidence on the marketability of the crude films/sheets as PVC films/sheets as known to the trade. The show cause notice, however, proceeded on the basis that crude PVC films was PVC films. Nor was there any finding of the lower authority that crude films/sheets was marketed and known as PVC films/sheets. The Department had not discharged the onus of proving the excisability of the product. The burden of proof lay on the Deptt - 1981 E.L.T. 432 (Bom.) - Advani-Oerlikon Ltd. and Another v. Union of India and Others. (iv) After deletion of Rule 10, the demand could not have been confirmed under Rule 10. Nor could Rule 10A have been invoked when the Department was in the know of the product, its classification, approval of the classification list by the Assistant Collector etc. (v) The end-use of the product was not relevant for the purpose of classification unless the tariff entry made it relevant - AIR 1977 S.C. 597 = 1983 E.L.T. 1566 (S.C.); Dunlop In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between crude films/sheets and other films. It was immaterial whether the film was crude or finished : it would fall under Item 15A(2). (vi) Goods removed for captive consumption were liable to pay duty. This had been made amply clear by the amendments to Rules 9 and 49 by the Finance Act, 1982, the validity of which has been upheld by the Delhi High Court in J.K. Cotton Spinning Weaving Mills Anr. v. Union of India Ors. (1983 E.L.T. 239. Del). (vii) When a tariff entry specified a commodity, it would cover all its forms and varieties semi-finished and finished articles made from raw materials would attract levy. Reliance was placed on 1982 E.L.T. 937 (All.) = 1982 ECR 389. D (All.) - Oudh Sugar Mills Ltd. Ors. v. Union of India Ors. and 1983 ECR 65D (Bom.) = 1983 E.L.T. 116 (Bom.) - Commissioner of Sales Tax v. Agarwal Co.). (viii) Referring to Rule 173-B(5) and contrasting it with Rule 173-C, it was urged that re-classification of a product was permissible without issue of a show cause notice. (ix) The benefit of proforma credit under Rule 56-A would not be available to Bhor at this stage and with retrospective effect. It had to be sought for at the relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overs only finished film/sheet or whether it covers also crude film/sheet, all types film/ sheet. If we come to the conclusion that the tariff entry covers there would be no need to consider whether the film/sheet, the subject of the dispute before us, was crude or finished and whether it was marketable or marketed. 11. In 1983 ECR 65-D = 1983 E.L.T. 116 (Bom.) (Commissioner of Sales Tax v. Agarwal Co.), the Bombay High Court following the Supreme Court s decisions in several sales tax cases, held that while interpreting a general term used for describing any commodity in any fiscal legislation, the general term so used covers that commodity or item or article in all its forms and varieties. Following the ratio of this decision, it is clear that all forms and varieties of films/sheets would be covered by Item 15-A(2), CET. There is no warrant to suppose or conclude that crude film/sheet will not be covered by the item or that only finished film/sheet will be covered by it. It is also seen from Kirk-Othmer s Encyclopaedia of Chemical Technology (Second edition, extracts furnished by DR) that variations in the amounts and types of plasticizers used in these films determine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... item. Films are only thin sheets ( Film a sheeting having nominal thickness not greater than 0.25 mm-IS : 2828-1964). Even otherwise, films would be taken in by the term articles......all sorts . Once the product is a film/sheet, it is no longer open to argument that it would not fall under Item 15A(2) because it is crude and not finished . As we have already noted, in the case of films, the properties can be varied to such an extent that only general statements can be made concerning them. Hence, it is furtile to contend that a crud film/sheet is not a film/sheet for the purpose of Item No. 15A(2), CET. 13. The learned Counsel for Bhor has rightly objected to the introduction of any new facts at this stage. But the question herein can be decided without introduction of any new facts. We do not think it necessary to investigate whether the subject product was a crude or a finished film/sheet. In fact, we think this distinction is not material to its classification under Item 15A(2), CET. The learned Counsel has contended that the Deptt. cannot change the very basis of the case. If it is a question of introduction of new facts at this stage, there may be some merit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be continued even after omission of Rule 10 in view of substitution of the Rule by Section 11 A, the ratio in our opinion, applies to the case before us. 15. Bhor has contended that since the show cause notice did not specify the amount being demanded, it was void and a nullity. They have noted 1980 E.L.T. 121 (Bom.) in support of this contention. The decision prima facie supports Bhor s contention. However, one crucial difference has to be noted. In the present case, Bhor did not furnish the particulars of clearances of the disputed goods despite the Department s communications of 28-7-1976, 33-10-1976, 24-1-1977 and 28-4-1977. Instead Bhor merely contested the queries. The show cause notice of 15-2-1977 makes a specific mention of the fact that despite the Department s communications. Bhor had not furnished the requisite particulars of past clearances. In the circumstances, the Asstt. Collector could not have specified the amount of the demand in the notice. He could only have asked them to show cause why duty at the appropriate rate should not be recovered in respect of past clearances which he did. We cannot, in the given facts, fault the Asstt. Collector or find flaw in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the period 1-3-1970 to 29-5-1971 i.e. prior to the issue of Notification No. 75/71. No notification has been cited before us conferring duty exemption on PVC films/ sheets used in the manufacture of adhesive tapes, insulating tapes and laminates. The demand for duty from Bhor, in the circumstances, was justified. 17. The learned Counsel for Bhor has contended that the Appellate Collector s order of 14-1-1974 not having been reviewed by the competent authority, had become final and binding and that the same matter could not have been agitated again by the Asstt. Collector. We note that the Appellate Collector, in the aforesaid order, was concerned with the Asstt. Collector s order confirming a demand for the period 1-3-1970 to 29-5-1971 which, for the reasons set out in his order, the Appellate Collector set aside. It is true that since this order was not reviewed, it became final and binding but in respect of the matter in relation to which the order was made. It cannot be deemed to be of a permanently binding nature irrespective of any change in the circumstances. As we have seen, Notification No. 75/71, dated 29-5-1971 brought about a qualitative change in the duty exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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