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TMI Blog1986 (11) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness of manufacture of electrical insulators. One of the materials used in such manufacture is porcelain. As correctly set out by the learned Judge, the facts are as follows :- "Item 23B of the Central Excise Tariff as contained in the First Schedule of the Central Excise Act reads as follows : 23-B. Chinaware and porcelainware, all sorts, (4) Not otherwise specified." 3. The Central Board of Excise Customs by its communication No. 5/24/61-CXVI dated the 23rd September, 1961 laid down that articles of porcelain were fitted with metal parts should be charged to Central Excise Duty on the value of the finished goods. By a subsequent communication F. No. 5/8/64-CXVI dated 28th November, 1967 issued by the Under Secretary, Central Board of Excise Customs, New Delhi addressed to all Collectors of Central Excise it was further directed as follows : "The matter has since been reviewed and the Board consider that such articles should be assessed as follows : (1) Whether porcelain portion of the insulator etc. is cleared separately the same may be assessed to duty as porcelain-ware. (2) Where the insulator etc. are cleared fully assembled with metal parts fitted thereto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of duty at Excise leviable thereon as in excess of 10% ad valorem. 2. The accessibility of articles of porcelain-ware fitted with metal parts was determined on the basis of the value of the porcelain-ware used in the assembly of the finished goods. 3. In supersession of all previous orders it has now been decided that the electrical insulators made of porcelain with or without metal parts are to be classified under Tariff Item 23B(4) on the value of the goods at the point of clearance including the value of the metal parts, if any, fitted thereto and irrespective of the proportion of such metal." 7. The admitted position is that subsequent 'to the issue of the said notice the petitioner had been clearing insulators of its manufacture on payment of excise duty irrespective of the value of metal parts fitted therein. The trouble arose regarding the period from 28th November, 1967 to 12th February, 1974 when the petitioner was communicated by the 30th January, 1974 letter of the Assistant Collector. During this period such goods had been cleared on the existing basis. Thereafter the petitioners were issued with the show cause notice No. 12/74 dated the 25th March, 1974 which r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of duty leviable on petitioner's products, namely, electrical insulators made of porcelain. The earlier tariff interpretation of the Board dated November 28, 1967 was in the form of instructions to officers of the Department concerned in the matter of assessment of electrical insulators made of porcelain. In this connection I crave reference to the provisions of Rule 8(2) of the said Rules and say that for fulfilling the requirements of the said Rule Board has to issue special order in each case under circumstances of an exceptional nature. Board's letters dated November 28, 1967 and January 21, 1974, apart from being in the nature of departmental instructions, were general in nature regarding assessment of all such insulators, produced by manufacturers all over India. It cannot be construed that those letters can, possibly lay down any law in the matter of assessments of electrical insulators made of porcelain. I repeat that the Board's letter dated January 21, 1974 confirmed the position in law created by Notification No. 152/71 dated July 26, 1971. The reason for not rescinding the earlier tariff interpretation dated November 28, 1967, with effect from the date the said not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the relevant records all the allegations contained in the said paragraph are denied. In particular 1 deny that there is no direction or order of the Board dated January 21, 1974 or that the same has been wrongly alleged in the order dated December 4, 1975 of the Joint Secretary to the Government of India or that the Assistant Collector had no power or authority or jurisdiction to issue any direction such as the communication dated February 12, 1974 or that the said communication has been made without any jurisdiction or that the same is a nullity as alleged or at all. I further deny that the Assistant Collector had no power or authority or jurisdiction to supersede the earlier order of the Board dated November 28, 1967 or that the communication dated February 21, 1974 was a purported communication or that the same is illegal or void or inoperative as alleged or at all." (para 14) "With reference to the allegations contained in Paragraph 15 of the said petition I crave leave to refer to Rule 8 of the said Rules and Board of Excise Custom's letter dated November 28, 1967 and January 21, 1974 for ascertaining the true terms, scope and effect thereof and save what will appear t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1974, the same was either due to error or misconstruction of law. Rule 10 and 173J of the said Rules clearly provide that if any duty is short levied due to error or misconstruction on the part of the office, the same may be recovered within a period of one year from the date of removal of the goods on a notice to the assessee to show cause why duty so short levied should not be recovered. In the instant case due notice under Rule 10 was served on the petitioner company and the same was duly confirmed by the Assistant Collector strictly in conformity with the provisions of law. I say that there are adequate provisions under the said Act to raise demands for duty in cases of non-levy also. Save as aforesaid and save what will appear from the records I deny the allegations contained in the said paragraph. In particular it is denied there was no levy of excise duty on those articles as no duty was payable thereon during the said period as alleged or that Rule 10 of the Central Excise Rules is inoperative or inapplicable in the instant case or that the impositions of duty for this period is without jurisdiction or illegal or nullity as alleged or at all". (para 16) The said affidavit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inion cannot be stated to be a notice under Rule 10. Condition precedent for the issue of the notice under Rule 10 have not been shown to be existing when this notice was issued. 14. Four decisions were cited before the Trial Judge on this point. They are, J.K. Steel Ltd. v. Union of India and Others, A.I.R. 1970 S.C., at Page 1173 = 1978 E.L.T. (J 355); N.B. Saniana v. The Elphinstone Spinning and Weaving Mills Co. Ltd., A.I.R. 1971 S.C. at Page 2029 = 1978 E.L.T. (J 399) (S.C.); R.K. Audin Others v. Special Steel Ltd., Bombay and Another, A.I.R. 1971, S.C. at Page 2049; and Assistant Collector of Central Excise, Calcutta v. National Tobacco Co. of India Ltd., reported in A.I.R. 1972, S.C. at Page 2563 = 1978 E.L.T. (J 416) (S.C.). 15. The learned Advocate for the appellant-department has not advanced any fresh submission before us apart from what he has submitted in the Court below. The only point sought to be made out before us is that if we find that this case comes under Rule 10, then we must hold accordingly. 16. In our opinion this argument has got no basis. Obviously Rule 10 is attracted. The question is how it has to be applied. The learned Counsel cited various ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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