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TMI Blog1997 (3) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... list under the provisions of Rule 173(2) (b) of the Central Excise Rules in respect of the spun yarn manufactured by them showing the same as covered by Tariff Item No. 18-III(i). The said classification list submitted by the appellant company was approved by the Assistant Collector (Central Excise), Ujjain on July 13, 1983. A Supplementary classification list was submitted by the appellant company on September 25, 1983 which was approved by the Assistant Collector on October 15, 1983. It appears that the samples of the products manufactured by the appellant company were taken and sent for chemical analysis and after receiving the test reports of the samples the Superintendent of Central Excise issued a demand notice dated February 7, 1984 for a sum of Rs. 26,47,749.39p as differential amount of duty on the ground that on the man- made yarn that was being manufactured by the appellant company excise duty was payable under Tariff Item No. 18-III(ii) and not under Tariff Item No. 18-III(i). Feeling, aggrieved by the said notice of demand the appellant company filed a Writ Petition [M.P.No.104/84] in the Madhya Pradesh High Court, on February 9, 1984, and in the said Writ Petition th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that in view of the stay order dated February 9, 1984 passed by the Madhya Pradesh High Court the said recoveries would not be enforced till the stay order remains in force. In the other order the Assistant Collector held that there was no basis for accepting the classification of the yarn manufactured by the appellant company under Tariff Item No. 18-III(i) and that the modified approval as mentioned in the show cause dated February 9, 1984 which was kept provisional pending consideration of defence by the party was now made final and the classification list effective from September, 1983 was being finally classified as falling under Tariff Item No. 18-III(ii) and that the said classification and rate of duty would apply right from the date the party manufactured such yarns. The appellant company amended the Writ Petition was pending in the High Court to challenge the validity of both these orders dated March 5, 1984 passed by the Assistant Collector. The appellant company also filed an appeal against those orders before the Collector (Appeals) Customs and Excise, New Delhi. 2.The Writ Petition [M.P. No. 104/84] of the appellant company was disposed of by a Division Bench of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollector (Appeals), the appellant company filed a second Writ Petition (M.P. No. 478/85) in the Madhya Pradesh High Court. It was urged that the order of the Collector dated May 27, 1985 was passed in violation of the direction given by the High Court in the judgment dated November 24, 1984 in M.P. No. 104/84. It was submitted that the High Court had quashed the order of the Assistant Collector dated March 5, 1984 along with the notice dated, February 9, 1984 preceding that order requiring the appellant company to show cause why the classification lists be not modified. During the pendency of the said Writ Petition, the Assistant Collector issued a notice dated June 6, 1985 demanding differential duty for the period from March 1984 to April 1985. The appellant company amended the Writ Petition to incorporate a challenge to the said notice dated June 6, 1985. The Writ Petition was disposed of by a Division Bench of the High Court (G.G. Sohoni and R.K. Verma JJ.) by the impugned judgment dated April 21, 1986. The High Court has upheld the order dated May 27, 1985 passed by the Collector (Appeals) dismissing the appeal of the appellant company against the order of the Assistant Collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e classification was made, the Assistant Collector had no jurisdiction to reconsider the matter on the basis of the new facts and the materials subsequently made available regarding the manufacturing of the product, the learned Judge has observed : "But it also cannot be disputed that the Superintendent of Central Excise, Ujjain, acted in a hasty manner by issuing the notice and that it is also now clear that it is only after the filing of the Writ Pettion in which the stay order was passed the respondent No. 3 thought of giving show cause notice to the petitioners and that without giving adequate opportunity to the petitioners passed the impugned order. Natural justice requires that quasi judicial authority must inform the person proceeded against, the material which it proposed to use against him so that he may meet the inference likely to use against him so that he may meet the inference likely to be raised from material. Even when the material used is within the knowledge of the person proceeded against, he must tell that it would be used against him, for unless he is so informed, he would have no opportunity of offering his explanation for meeting the inference that the autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ist served on the petitioners were bad in law and ordered that the same be quashed. A perusal of the judgment also clearly indicates that the Division Bench directed that the Collector, Central Excise (Appeals), should hear the appeal of the petitioners on merits after giving the petitioners an adequate opportunity to put their case and their evidence before him in respect of the period from 7th February, 1984 onwards. Thus, the Division Bench took the view that the show cause notice served on the petitioners could be treated as valid and effective only in respect of the period from 7th February, 1984 onwards and not retrospectively from August 15, 1983 to February 6, 1984 being the period from which the demand has already been made in the demand notice dated 9th February, 1984. [emphasis supplied] (pp. 842-843)". 11.The Court did not accept the contention urged by Shri Govind Das on behalf of the Union of India that since the Collector (Appeals) had been directed to examine the merits of the matters, viz., the modification of the classification lists after allowing adequate opportunity to the appellant company to show cause in respect of the period from February 7, 1984 onward, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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