9911796707
TMI Blog1989 (11) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... on) confirming the demand for Rs. 8,79,449.13, substituting the original demand for Rs. 7,09,237.84. The petitioner company is engaged in the manufacture of cycle lamps which fall under Item 68 of the I Schedule to the Central Excises and Salt Act, 1944, hereinafter referred to as 'the Act'. As required under Rule 173-D of the Central Excise Rules, hereinafter referred to as 'the Rules', the company was filing classification lists for the goods manufactured and cleared by them. They were being approved from time to time. Treating cycle lamps as part of cycle, under Rule 8 exemption was granted for cycles and parts thereof under Notification No. 55 of 1975 as amended by Notification No. 102 of 1980 dated 18-6-1980. Second respondent issued a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws taken, these writ appeals are preferred. 4. Though not only for the period covered by the writ appeals but for subsequent periods as well, on demands raised, the petitioner had filed W.P. Nos. 8709 and 8710 of 1984; in view of Notification No. 3 of 1986 dated 16-1-1986 issued under Section 11C of the Act, directing that no duty shall be required to be paid in respect of cycle accessories for the period from 19-6-1980 to 16-3-1986, those two writ petitions had to be dismissed as having become infructuous. Under the show cause notice dated 24-10-80, the relevant period begins from 24-4-1980. By notification dated 16-1-1986, the demand of duty having been given up with effect from 19-6-1980, these writ appeals now cover only a period of 86 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how cause notice of the revised thinking and giving an opportunity to clarify as to why the revised view should not be followed or adopted, could never be considered as prejudging the issue involved in the show cause notice. 6. A careful reading of the show cause notice would show that it does not in any manner spell out that the authorities have already concluded the issue against the petitioner. As rightly contended by learned counsel for the respondents, it only spells out the revised thinking of the concerned authority pertaining to exemption; and this aspect requires necessarily to be communicated to the petitioner and without which a valid show cause notice cannot be issued. If a bald show cause notice is issued without reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not go back six months from the date of issue of show cause notice, even assuming that the Department's stand of classification was correct. It was held that the revised classification cannot be made applicable retrospectively i.e. the demand for duty in terms of the revised classification can be enforced only from the date of the show cause notice and not for any earlier period. He would then refer to Steel Authority of India v. Collector of Central Excise [1985 (22) E.L.T. 487] which is also a decision of the Tribunal and it was held therein that, once a classification list is approved and till the first show cause notice was given, the demand for additional duty could be only effective from the date of issue of show cause notice and cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the period now involved in these appeals, it is claimed that it is only the classification list as approved which could be acted upon, and by invoking Section 11-A, a different stand cannot be taken by the issue of a show cause notice. In dealing with the powers of Excise authorities to collect duty, it was held by the Supreme Court in Elson Machines Pvt. Ltd. v. Collr. of Central Excise [1988 (38) E.L.T. 571] as follows :- "The next submission on behalf of the appellant is that the classification lists had been approved earlier and the Excise authority was estopped from taking a different view. Plainly there can be no estoppel against the law. The claim raised before us is a claim based on the legal effect of a provision of law, and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articular item of goods for purpose of classification, could be only the popular commercial view, as held in State of UP v. Kores (India) (AIR 1977 S.C. 132), and since a cycle can be used without a dynamo it is not part of a cycle. Further as to how the use of a dynamo in relation to a cycle has been understood by the Government of India for the purposes of this Act and whether it was treated as an accessory or as a cycle part, the Notification No. 3/86-Central Excise, dated 16-1-1986 provides sufficient guidance. It has chosen to grant relief for cycle accessories for the period mentioned therein. This notification had not treated dynamos as cycle part but only as an accessory. By availing the benefit thereunder, it had resulted in the tw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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