TMI Blog1984 (12) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... w cause why the paper in question should not be classified under Tariff Item No. 17(2)-CET and why a differential duty for the clearances from 22-5-1980 should not be realized from them. A corrigendum to this SCN was issued to the respondents on 15-1-1981 invoking Section 11A of the Act (hereinafter to be referred to as the Act) for demanding the duty. 2. The respondents in their letter dated 17-2-1981 requested for the supply of a copy of the Test Report of the Chemical Examiner and the copies of the documents alleged to have been relied upon by the Department to arrive at the conclusion that the paper in 59 question had been used for other purposes. Instead of complying with the requirements of the Appellants, the Department issued a revised show cause notice on 7-3-1981 mentioning therein that the appellants had contravened the provisions of Rule No. 173-B of the Central Excise Rules, 1944, inasmuch as in the classification list filed by them on 12-5-1980 the paper Violetwove produced by them had been intentionally classified under Tariff Item No. 17(1) by bringing it under the category of uncoated and coated printing and writing paper (other than poster paper) and thereby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mposed. 5. Aggrieved by the said Order of the Assistant Collector, the Respondents filed an appeal before the Appellate Collector, Madras who by his order dated 8-9-1981 upheld the order of the Assistant Collector reclassifying the questioned goods under Tariff Item No. 17(2) CET but restricted the demand only for six months from the date of the last show cause notice, that is the one dated 7-3-1981. The penalty amount of ₹ 250/- was also waived. 6. The Central Government in exercise of the powers vested in them under Section 36(2) of the Act, as it stood at the relevant time, issued notice dated 2-2-1982 to the respondents conveying that the Central Government were tentatively of the view that the Order-in-Appeal dated 8-9-1981 passed by the Appellate Collector of Central Excise, Madras was not proper, legal and correct and proposing to set it aside by fresh orders as deemed fit. As the said proceedings were not concluded when the Tribunal came into existence, the same was transferred to the Tribunal as an appeal under Section 35P of the Act. 7. As far as the classification of paper in dispute is concerned the matter stand settled and it is classifiable under Tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Khanna pointed out that the findings of the Appellate Collector that the demand can be valid only for six months from the date of the last show cause notice i.e. 7-3-1981 are not sustainable in the eyes of law. 8. Shri G. Subramaniam, the learned consultant of ths Respondents countered the arguments of Shri Khanna and submitted that in the show cause notice dated 20-11-1980 the details of the case were not given as incorporated in the review show cause notice. According to Shri Subramaniam, the show cause notice should comply with the requirements of the rules. The party should know as to what case he has to meet in pursuance of that show cause notice. Show cause notice dated 20-11-1980 did not specify the rules under which the demand was made and the amount payable. Since the amount was not specified the provisions of Rule 10 or of Section 11A were not complied with. The assessee classified the goods in good faith and there was no deliberate concealment on his part. The Appellate Collector rightly restricted the demand for six months from 7-3-1981, the date of the last show cause notice. 9. As far as legal proposition is concerned, it has been held by a Special Bench of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he show cause notice dated 20-11-1980 shows that it cannot be said to be valid show cause notice. Ignoring its defects that it has not been mentioned under what provision of law it has been issued and what is the exact amount of the differential duty, this show cause notice is defective in material particulars. In this show cause notice it has been mentioned that the classification list filed by the assessee was approved under Tariff Item 17(1) CET subject to the test report of the Chemical Examiner, Madras. No report of the Chemical Examiner, Madras was supplied to the assessee which was an essential document for the purpose of the show cause notice. The ground for changing the classification from Tariff Item No. 17(1) to 17(2) was that the paper in question was used for the purpose other than that declared by the assessee. No particulars were given as to how that paper was used and what was the evidence with the department in that regard. A party is not expected to meet such type of vague allegations contained in the show cause notice and that is why the department had to issue a revised show cause notice on 7-3-1981. This revised show cause notice dated 7-3-1981 is quite differe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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