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TMI Blog1985 (3) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... more, the factory used jute stalk and paddy straw in the manufacture. The Central Excise felt that the mill board was not eligible to the concession under the notification, and therefore, proceedings were initiated to modify the classification. By one order dated 11-4-79, the Assistant Collector ordered that the assessment of the mill board should be at 30% ad valorem instead of the concessional rate, after issuing a show cause notice for the proposed modification. A demand was also issued on 15-2-79 for differential duty for the period 29-11-77 to 14-12-78. For the months of April, 1979 and May, 1979, the Superintendent of Central Excise, Burdwan Range demanded duty in the R.T. 12. It was these orders that led to the three appellate orders. 2. In Order No. 126/WB of 1980, the Appellate Collector saw no ground in the charge of suppression levelled against the factory by the Assistant Collector. He said that it was not correct for the Assistant Collector to review his earlier order in which he had approved the concessional assessment for the mill board. The failure to mention the word chemical would not amount to suppression as it was commonly known that chemicals are necessary i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was received by the factory and thereafter the revised approval would take effect. 4. Reviews under Section 36(2) of the Central Excises and Salt Act, 1944 were sought by the department against all these three orders of the Appellate Collector, while on behalf of M/s. Nayek Paper Board Mills an appeal has been filed by M/s. Nayek Associates against the order of the Appellate Collector No. 127/WB of 1980 because he said that the approval to the classification list given on 17-2-78 would remain valid till 18-5-79 meaning that from 19-5-79, the classification list would operate as modified by the order of the Assistant Collector No. 1/Classification/VU/BDN/79, dated 11-4-79 communicated under C.No. III(10)II/VU/BDN/77/5714, dated 4-5-79. [The figure 79 in the number of the order-in-original is also quoted as 77; we have not been able to determine whether 77 or 79 is the correct figure]. 5. Mr. Bandopadhyay, the learned Counsel for M/s. Nayek Associates argued that the Appellate Collector had condicted himself of saying first that the Assistant Collector had no authority to review and change his own Order, and proceeding to do just that by ordering that the classification lis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of arguments in respect of the two appeals for Appeal No. ED(SB)(T) A. No. 474/81-C and A. No. ED(SB)(T) A. No. 1122/81-C listing the arguments and the authorities with which he supports his arguments. For the sake of facility, we shall deal with the two matters together since they relate to proceedings that arose from one source, viz. the decision of the Assistant Collector to modify the classification list filed on 29-11-1977 in respect of mill board manufactured by M/s. Nayek Paper Board Mills. 10. The dispute arose over the interpretation of the definition given in the Notification No. 70/76-C.E. This definition says that: Mill board means any unbleached homogeneous board, having a thickness exceeding 0.50 mm and made out of mixed waste papers with or without screenings and mechanical pulp but without any colouring matter being added thereto. 11. The mill board manufactured by M/s. Nayek Paper Board Mills contained jute stalk and paddy straw but no mechanical pulp. When the Central Excise realised that straw and jute have been used, they came to the conclusion that the concessional assessment given to M/s. Nayek Paper Board Mills was mistaken and they wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n an inference is drawn that can be validly made from the words used by the statute. In this case nobody has employed intendment. Nor has anybody read meanings into the words of the notification. What the Central Excise Department did was only to say that the notification required the use of mixed waste paper and mechanical pulp. The mixed waste paper may or may not have the mixed screenings, but the ingredients must be mixed waste paper and mechanical pulp. The words of the notification are that the mill board should be made out of mixed waste paper with or without screening and mechanical pulp. 15. We cannot understand why M/s. Nayek Paper speak of intendment. The exemption is given to mill board made from two strictly identified raw materials and the mill board manufactured by the factory did not have both the ingredients. It lacked mechanical pulp. Instead, it contained matter like jute stalk and paddy straw. We are not able to see how the use of mechanical pulp is optional. We cannot discover this in the notification. Mechanical pulp is one of the two materials, out of which the mill board must be made if it is to quality for the exemption. To require the presence of mechan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imagination, be called an assisting agent. Together, they form 40% of the furnish of the mill board. 18. The High Court of Bombay decided in 1980 E.L.T. 291 that it was not proper to read an exemption notification in a limited sense, but should be construed liberally so that the petitioner may not be deprived of the advantage of the concession. By this, M/s. Nayek Associates appear to suggest that there has been an illiberal construction of the notification. But we can find none. The construction given by the Central Excise is only a construction given on the plain words of the notification. There is nothing illiberal in this. It is not as if the notification, by a liberal construction, can cover the mill board manufactured by M/s. Nayek Associates. This is not a question of a liberal construction, but a question of the mill board not being eligible to the exemtion on the terms of the notification. We can see nothing liberal in saying that mechanical pulp need not be used, but that jute stalk and paddy straw can supplant it and take as much as 40% of the weight of the board. 19. M/s. Nayek Associates then argued that the Supreme Court in 1978 E.L.T. (J 355), reminded us that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the law. It has to be noted that all demands are for past periods and, therefore, retrospective in their action and in their nature. We cannot accept an argument that demands cannot be issued once the Assistant Collector has approved an assessment. If that were so, then we can see no utility for the provisions in the Act which authorise issuing demands, and indeed there would be no need for issuing demands. We must reject this contention as it is devoid-of any logic and is not sanctioned by the law. Action to demand is a lawful and correct action unless, of course, it is faulted by failure to follow due process or for other reasons like the time bar etc. The order of the Appellate Collector saying that the revision in the classification list should fake effect from the date of receipt of the revision order by the factory is seriously defective. There is no basis for the claim that action of this kind is wrong or that the Assistant Collector cannot change an assessment he has made. If he can issue a demand for past periods, he can also change an assessment if he finds it erroneous. This is not to say that the Assistant Collector can change assessments capriciously or without ..... X X X X Extracts X X X X X X X X Extracts X X X X
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