9911796707
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Issues:
Classification of cotton tyre cord warp sheets as cotton fabrics under T.I. 19, CET; Demand for duty for the period from 1-4-1975 to 18-8-1975 and subsequent period; Bar on issuing show cause notice during pendency of writ petitions; Validity of demand raised after vacation of court injunction order; Applicability of Section 11A or Rule 10 of the Central Excise Rules. Analysis: The appeal concerned the classification of cotton tyre cord warp sheets as cotton fabrics under T.I. 19, CET. The appellants initially paid duty under T.I. 18A but were later directed by the Department to classify the sheets as fabrics under T.I. 19. The dispute arose when a show cause notice was issued demanding duty for the period from 1-4-1975 to 18-8-1975. The appellants challenged this notice in the High Court of Karnataka, obtaining stay orders against the demand. However, after the Supreme Court decision and subsequent High Court judgment, the demand was confirmed for the mentioned period and extended to cover clearances up to 23-2-1981. During the appeal process, the Collector (Appeals), Madras, rejected the appeals and upheld the demand for the period from 1-4-1975 to 18-8-1975. The appellants then argued that the demand for the subsequent period was time-barred, as they had paid duty under protest until 19-6-1976 and stopped payment thereafter due to the High Court's interim order. They contended that the show cause notice issued on 20-5-1982 for the period from 20-6-1976 to 23-2-1981 was invalid due to being time-barred. The Department argued that the demand for the subsequent period was not time-barred as it was raised before under an earlier notice. They maintained that the show cause notice issued post the High Court's vacation of the stay order was valid and not subject to the limitations under Section 11A or Rule 10 of the Central Excise Rules. The Department cited legal precedents to support their stance that the provisions of Section 11A or Rule 10 would not apply in cases of demands raised after the vacation of a court injunction order. The Tribunal, after considering the arguments presented, affirmed the decision of the Collector (Appeals), Madras. They held that the demand raised for the period from 20-6-1976 to 23-2-1981 was not time-barred, as it was a continuation of an earlier notice and issued after the High Court's vacation of the stay order. The Tribunal concluded that the show cause notice dated 20-5-1982 was not subject to the limitations under Section 11A or Rule 10 of the Central Excise Rules, as the issue of classification had been conclusively determined by the High Court's judgment. Therefore, the Tribunal dismissed the appeal and upheld the findings of the Collector (Appeals), Madras.
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