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TMI Blog2002 (11) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 in the first Schedule to the Central Excises Salt Act, 1944 (the Act) w.e.f. 1-3-1985, a question arose whether the said product manufactured by the appellants by forging became liable for further duty under Tariff Item 68 because after the forging, the appellants are said to have subjected this product to certain other manufacturing processes like polishing and trimming to make the product suitable for its ultimate use. This dispute between the appellant and the Revenue had a chequered career going through the process of appeals, revision, writ petition before the Delhi High Court, then a remand, another round of appeal before the authorities and then ultimately another appeal to the Customs Excise Gold (Control) Appellate Tribunal ('the Tribunal') which was by then constituted, and from there to this Court by way of this statutory appeal. Thus, this litigation which started by virtue of an order made by the Assistant Collector on 21-1-1976 is now before us in the year 2002. 2.Before the Tribunal, two questions arose for consideration. They are : whether the products manufactured by the appellants are classifiable under Tariff Item 68? If so, the demand made by the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als before us. 5.Mr. S. Ganesh, learned Counsel for the appellants, contended that the activities like removal of superfluous extra skin of forging or polishing and trimming the forged products cannot be construed as the processes involved in the manufacture of any new product. He placed strong reliance on the judgment of this Court in Tata Iron Steel Co. Ltd. v. Union of India Ors. [1988 (35) E.L.T. 605] which according to the learned Counsel, concludes this question of classification in favour of the appellants both on facts and in law. He further contended that since the burden of proof that the forgings manufactured by the appellants do fall under Item 68 being heavily on the Revenue and the Revenue having not placed any material in support of its case, the conclusion arrived at by the majority members of the Tribunal that the products manufactured by the appellants fall under Tariff Item 68 cannot be sustained. 6.In regard to the question of limitation, learned Counsel urged that it is an admitted fact that no show cause notice as required in law was ever issued by the appellants, therefore, in the absence of any show cause notice, there could not be any demand at all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved until final classification was made. He also contended that there being an interim order of the High Court dated 19-2-1981, the authorities could not have issued any show cause notice during the pendency of the said interim order. He also submitted that the show cause notice being only a notice informing the assessee of his liability to pay the duty, the said information having been made known to the assessee by way of various letters and orders, it should be held that there was substantial compliance of the requirement of the said notice. Learned Counsel also argued that in view of the fact that the question of classification was still not finally adjudicated, it was not possible for the Department to issue a show cause notice because of the pendency of the proceedings, therefore, if the requirement of issuance of notice is to be strictly construed in the manner pleaded by the appellants then in many a case where classification dispute is pending, it would become impossible for the revenue to issue a proper notice. Therefore, the requirement of issuance of a notice should be liberally construed. 8.From the above arguments, the very same two questions that arose for con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e argument of the Revenue must fail. 11.The next question for our consideration is whether the order made by the Assistant Collector on 22-1-1976 could be treated as a provisional classification so as to keep the period of limitation frozen. The Judicial Member in this regard came to a definite conclusion that the said order is a final order against which appeals and revisions were taken recourse to. According to the learned Member merely because there is a continuing dispute in regard to the correctness of the said order of the Assistant Collector by way of appeals and revisions, the same does not make the order of the Assistant Collector anything short of a final order, therefore, he rejected the contention of the Revenue on this count. While the Technical Member and the third Member following the judgment of this Court in the case of Samrat International (supra) came to the conclusion that the order of the Assistant Collector could be treated as a provisional order because there was correspondence regarding the excisability and the classification list filed by the appellants. From the above we notice that the majority of the members of the Tribunal based their finding that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xt ground urged on behalf of the Revenue in regard to the question of limitation is based on an interim order made by the High Court dated 19-12-1981. It is to be noted that the writ petition in which the said interim order was made, was filed against the order made by the Govt. of India dated 2-8-1980 in a revision petition filed before it. In the said writ petition, the High Court ordered : "... In the meantime, stay the operation of the impugned order of the Central Government dated 2-8-1980." 14.Based on this interim order, learned Counsel for the Revenue contended that the Revenue could not have issued a show cause notice during the currency of the said interim order, therefore, by virtue of the Explanation to Section 11A, the period of limitation gets frozen during the said stay order. We cannot accept this argument either. It is a settled position in law that unless and until there is a specific injunction/stay granted by a competent court which restrains an authority from issuing the required notice, merely because some interim order is made, the authorities empowered to issue such notice cannot refrain from issuing the required notice within the period of limitation no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e demand is in contravention of the statutory provision. Certain other authorities have been cited at the hearing by Counsel for both sides. Reference to them, we consider, is not necessary." 16.In our opinion the above judgment in Gokak Patel Volkart's case (supra) clearly goes against the argument of the Revenue with reference to the interim order made by the Delhi High Court in this case. As notice above, what was stayed by the High Court was the operation of the order of the Union of India made in a revision filed by the appellants. That order did not restrain the authorities from issuing a show cause notice as required by law. Therefore, it is not open to the Revenue to contend that the period covered by the interim order of the High Court is available to the Revenue to avoid limitation. The above view of ours is also supported by another judgment of this Court in J.K. Cotton Mills' case (supra) wherein also this Court has held that the provision for extension of time limit for issuance of notice by excluding the period of stay granted by an order of Court is to be construed strictly. In the said view of the matter the above contention of the Revenue should also fail. 17.F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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