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1994 (9) TMI 86
Whether there has been a mis-statement, in so far as there has been a failure to include the quantity of Rapidogens manufactured during the relevant period in the statement furnished alongwith the classification list as well as the declaration appended thereto?
Held that:- Considering the appellant's case that he thought bona fide that he need not include the value of the Rapidogens in his declaration, for the reason that the said product was fully exempt from duty under Notification No. 180/61, dated November 23, 1961 it is also brought to our notice that on the date of filing of his declaration, two High Courts had taken the view that the goods exempted from duty are not includible within the definition of `excisable goods' as defined in clause (d) of Section 2. No doubt, two other High Courts had taken a contrary view. The appellant's factory is in the State of Maharashtra and the Bombay High Court had not taken a view one way or the other.
In the above circumstances and because the facts establish that the mis-statement of facts in the declaration filed by the appellant - or the suppression of facts therein, as the case may be - cannot be called wilful, the appeal is allowed.
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1994 (9) TMI 85
Issues:
1. Refund of excise duty paid under protest.
2. Claim for interest on the duty.
3. Rejection of refund application by Assistant Collector.
4. Availability of alternative remedy under Section 35 of the Central Excises and Salt Act, 1944.
5. Denial of opportunity to produce documents.
6. Antidated order dated 9-11-1990.
Analysis:
The writ petition was filed seeking a mandamus for the refund of excise duty paid under protest from 3-7-1971 to 28-2-1986, along with interest at 18%. The petitioner applied for refund following an order by the Custom Excise Gold (Control) Appellate Tribunal in Appeal No. E/1238/85-C, which was rejected by the Assistant Collector, Central Excise, Saharanpur on 9-11-1990. The rejection was based on the lack of supporting documentary evidence for the calculations provided by the petitioner. The petitioner claimed they were not given a fair chance to produce necessary documents to justify their refund claim. The court noted that the petitioners were entitled to consequential reliefs post the Tribunal's order unless statutory amendments affected this right. The court decided not to dismiss the petition on the basis of an alternative remedy under Section 35 of the Central Excises and Salt Act, 1944, and emphasized the importance of allowing the petitioners to present relevant documents to support their claim for a refund.
The court found that the Assistant Collector's rejection of the refund application lacked consideration of the documents submitted by the petitioners in support of their claim. It was deemed essential to provide the petitioners with an opportunity to present these documents adequately. The court highlighted that remitting the matter back to the Assistant Collector for a fresh decision would not cause injustice to the respondents but denying the petitioners the chance to substantiate their claim could lead to irreversible harm. Therefore, the court allowed the petition, quashed the order dated 9-11-1990, and directed the Assistant Collector to reconsider the refund application within two months, emphasizing the importance of providing the necessary documents to support the claim.
In conclusion, the court granted the petition, setting aside the order rejecting the refund application and instructed the Assistant Collector to review the application with the opportunity for the petitioners to present supporting documents within a specified timeframe. The judgment highlighted the significance of affording the petitioners a fair chance to substantiate their claim for a refund, emphasizing the principles of natural justice and procedural fairness.
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1994 (9) TMI 84
Issues:
1. Quashing of notice dated 28th July, 1994 under Section 11A of the Central Excises and Salt Act, 1944.
2. Challenge of notice on grounds of being time-barred and without jurisdiction.
3. Classification of intermediary product as excisable goods.
4. Exemption of intermediary product under Chapter 13 of the Central Excise Tariff.
5. Jurisdiction of the High Court under Article 226 of the Constitution.
6. Request to decide some issues as preliminary issues.
Analysis:
The petitioner sought the quashing of a notice dated 28th July, 1994, issued under Section 11A of the Central Excises and Salt Act, 1944, demanding payment of excise duty amounting to Rs. 53,79,299 for the period July, 1989 to February, 1994. The petitioner challenged the notice on the grounds of being time-barred and without jurisdiction. The notice alleged that the petitioner had suppressed facts regarding the manufacturing process of an intermediary product used in the final product to evade duty. The petitioner contended that the intermediary product, known as kwath, was exempt under Chapter 13 of the Central Excise Tariff, or if not exempt, it fell under sub-heading 3003.30 by a specific notification. The High Court refrained from delving into the classification and exemption issues, stating they should be raised before the authority in response to the show cause notice. The Court emphasized that such factual determinations were not suitable for examination under Article 226 of the Constitution.
The petitioner also requested the High Court to decide certain issues as preliminary issues due to the prolonged pendency of the matter. The Court left it to the authority to determine if these issues should be treated as preliminary, based on whether they were prejudicial to revenue or fundamental to the case. The Court declined to exercise its discretion under Article 226 of the Constitution and dismissed the petition, emphasizing that the petitioner should raise all relevant grounds before the appropriate authority in response to the show cause notice for a decision in accordance with the law.
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1994 (9) TMI 83
Issues Involved
1. Whether the cost of the manuals imported along with the software diskettes should be included in the cost of the diskettes or assessed separately.
2. Whether the Tribunal erred in directing pre-deposit of duty and penalty without considering the plea of limitation.
3. Whether the pre-deposit requirement imposed by the Tribunal causes undue hardship to the appellant.
Detailed Analysis
1. Inclusion of Manuals' Cost with Diskettes
The primary issue revolves around whether the cost of the manuals imported along with the software diskettes should be included in the cost of the diskettes or assessed separately. The appellant had split the value of the manuals and diskettes to benefit from a lower duty rate applicable to printed materials. However, the Collector of Customs clubbed the value of the manuals and diskettes, levying a higher uniform duty rate. The Tribunal found that the manuals were essential for the marketing of the diskettes and were a compulsory supply, thus justifying the clubbing of their values. The Tribunal noted that the appellant had deliberately split the values and entered into a financial arrangement with the suppliers to benefit from the lower duty rate. This practice was found to be a mis-statement and suppression of facts, leading to the conclusion that the manuals should be included in the value of the diskettes.
2. Plea of Limitation
The appellant contended that the Tribunal failed to consider the plea of limitation while directing the pre-deposit. The learned single Judge dismissed this argument, stating that the question of limitation was intricately connected with the facts alleged by the parties and did not require a separate finding at the interim stage. On appeal, this court upheld the Tribunal's decision, noting that the Tribunal was only required to take a prima facie view of the matter and not examine every ground of challenge in detail. The Tribunal had given substantial relief to the appellant by reducing the pre-deposit amount to roughly half of the total demand. The omission to consider the limitation issue did not invalidate the Tribunal's order.
3. Undue Hardship Due to Pre-Deposit Requirement
The appellant argued that the pre-deposit of duty and penalty would cause extreme hardship. The Tribunal had considered the financial capacity of the appellant and found it to be a profit-making concern with only cash flow problems. The Tribunal directed the pre-deposit of only 50% of the total demand, which was not deemed to cause undue hardship. This court agreed, stating that the Tribunal had balanced the interests of the exchequer and the appellant. The court emphasized that the Tribunal's discretion in such matters should be exercised judicially but found no error or perversity in the Tribunal's decision.
Supporting Judgments
The court referred to several judgments to support its findings:
- Rajendrakumar R. Shah v. Collector of Customs: This case involved a situation where the Tribunal had not applied the test of 'Prima facie case' and declined to waive the pre-deposit based on the conduct of the party. The court found this distinguishable as the appellant in the current case did not assert financial incapacity but rather cash flow problems.
- U.P. Lamination v. Union of India & Others: The Allahabad High Court granted interim relief based on the small scale of the business and lack of rebuttal from the department. This was not applicable as the appellant in the current case did not demonstrate financial incapacity.
- Bongaigaon Refinery & Petrochem Ltd. v. Collector of C. Ex. (A), Calcutta: The Calcutta High Court held that a strong prima facie case could imply undue hardship. However, the Tribunal in the current case found no strong prima facie case in favor of the appellant, justifying the pre-deposit requirement.
- R.K. Organisation v. CEGAT: The Madhya Pradesh High Court found that the Tribunal should consider the limitation issue. However, this court did not find it necessary for the Tribunal to address every ground at the interim stage.
Conclusion
The appeals were dismissed, with the court extending the period for making the deposit by another four weeks. The Tribunal's decision to club the value of the manuals and diskettes, its handling of the plea of limitation, and the imposition of a 50% pre-deposit were all upheld as reasonable and legally sound.
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1994 (9) TMI 82
Issues:
1. Classification of goods under Tariff Heading No. 8482.20 for exemption benefit.
2. Compliance with the order of the Collector of Customs (Appeals) for releasing goods.
3. Lack of stay order against the Collector of Customs (Appeals) order dated 8th April, 1994.
Analysis:
1. The writ petition involved a dispute regarding the classification of imported goods, specifically 5000 pieces of Taper Roller Bearings No. 32211, for exemption benefit. The Customs authorities initially denied the exemption, citing that the bearings were not eligible for the benefit as they were intended for manufacturing briquetting presses in India. The petitioner appealed this decision, and the Collector of Customs (Appeals) overturned the initial order, emphasizing the need to interpret the notification in a straightforward manner, in line with judicial precedents. The Collector directed the lower authority to classify the goods under Tariff sub-heading 8482.20 and extend the benefit of a specific Customs Notification.
2. Following the Collector of Customs (Appeals) order on 8th April, 1994, the petitioner sought compliance from the Customs authorities for releasing the goods based on the assessed duty. However, despite the order being passed, no action was taken by the authorities to release the goods. Consequently, the writ petition was filed to address the non-compliance with the Collector's order and to secure the release of the goods upon payment of the assessed duty. The counsel for the petitioner relied on legal precedents emphasizing the binding nature of appellate orders on revenue officers, stressing the importance of following higher authorities' decisions to avoid undue harassment to taxpayers.
3. The court addressed the absence of a stay order against the Collector of Customs (Appeals) order dated 8th April, 1994. Despite inquiries and instructions from the Customs Department, no evidence of a stay order was presented to the court. Relying on Supreme Court decisions, the court emphasized that in the absence of a stay order, the authorities were obligated to implement the Collector's order for releasing the goods. Consequently, the court directed the Customs Authorities to proceed with releasing the goods within two weeks of the order, emphasizing compliance with the Collector's directive. The court also noted the lack of filed affidavits from the respondents and made no order regarding costs, with all parties instructed to act based on a signed copy of the court's order.
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1994 (9) TMI 81
The High Court of Karnataka at Bangalore considered whether it was permissible to recall a witness and reopen evidence at the end of a trial. The court held that once the prosecution has closed its case and the accused have made their statements, reopening evidence is not allowed. The court set aside the Magistrate's order allowing the recall of the witness and directed the trial court to continue the trial from where it was stayed. (1994 (9) TMI 81 - HIGH COURT OF KARNATAKA AT BANGALORE)
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1994 (9) TMI 80
Issues:
1. Dismissal of writ petitions by the learned Chief Justice based on alternative remedy.
2. Challenge of the petitioner-appellant regarding customs duty on Polyester Staple Fibre.
3. Applicability of statutory remedy under the Customs Act.
4. Failure to challenge vires of any provision.
5. Jurisdictional aspect of the cause of action.
6. Lack of assistance provided by the respondent side.
Analysis:
The judgment involves special appeals against the dismissal of seven writ petitions by the learned Chief Justice. The petitioner-appellant, a private limited Company engaged in manufacturing synthetic yarn, challenged the classification of Polyester Staple Fibre by customs authorities. The dispute revolved around the duty payable on the imported fibre. The learned Chief Justice dismissed the writ petitions citing the availability of statutory remedies under the Customs Act. The petitioner-appellant argued that the petitions should not have been dismissed based on alternative remedies, emphasizing the benefit of a specific notification for duty exemption.
The Court deliberated on the principle that writ petitions can be entertained by the High Court even when alternative statutory remedies exist, especially if the impugned order lacks jurisdiction. However, in this case, the controversy required factual investigation best suited for statutory authorities. The Court referenced a Supreme Court case emphasizing that Article 226 should not be used to bypass statutory procedures unless extraordinary circumstances exist. The petitioner-appellant did not challenge the vires of any provision or demonstrate an extraordinary situation warranting bypassing statutory remedies.
Regarding the jurisdictional aspect, the cause of action arose in Bombay, raising territorial jurisdiction concerns. The Division Bench raised points on the filing of appeals and the appropriate forum for the dispute, but these points became moot after the dismissal of the special appeals. The judgment highlighted the lack of assistance from the respondent side throughout the proceedings, emphasizing the importance of timely and proper assistance to the Court for efficient case resolution.
Ultimately, the Court upheld the learned Chief Justice's decision to dismiss the writ petitions, emphasizing the availability of statutory remedies under the Customs Act. The petitioner-appellant was granted a brief period to avail the statutory remedy following the judgment. The special appeals were dismissed, and the judgment concluded by highlighting the need for timely and comprehensive assistance from all parties involved in legal proceedings to facilitate efficient case resolution.
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1994 (9) TMI 79
Issues Involved:
1. Legality and validity of Trade Notice No. 2/87 dated 1-4-1987.
2. Requirement to submit separate price lists for factory gate sales and depot sales.
3. Determination of assessable value under Section 4 of the Central Excises and Salt Act, 1944.
4. Maintainability of the writ application.
5. Validity of show cause notices issued under Section 11A of the Central Excises and Salt Act, 1944.
Detailed Analysis:
1. Legality and Validity of Trade Notice No. 2/87 dated 1-4-1987
The Trade Notice No. 2/87 required assessees to file separate price lists for factory gate sales and depot sales. The petitioner challenged the legality of this notice, arguing that it interfered with the quasi-judicial functions of the excise authorities and was beyond the administrative scope allowed under Rule 233 of the Central Excise Rules, 1944. The court held that the Trade Notice was issued without authority of law and was liable to be set aside. The court emphasized that administrative instructions cannot change the basis of assessment and that such instructions should not interfere with the quasi-judicial functions of the excise authorities.
2. Requirement to Submit Separate Price Lists for Factory Gate Sales and Depot Sales
The respondents argued that due to the different prices at factory gate sales and depot sales, the petitioner was required to submit separate price lists under Section 4(1)(a) proviso (i) of the Act. The court, however, held that when the value of excisable goods can be determined under Section 4(1)(a), there is no need to resort to Section 4(2). The court quashed the communications directing the petitioner to submit separate price lists for depot sales, stating that the assessment should be based on the factory gate prices alone.
3. Determination of Assessable Value under Section 4 of the Central Excises and Salt Act, 1944
The court examined the provisions of Section 4 before and after its amendment in 1973. It was argued that the new Section 4 did not materially change the method of valuation from the old Section 4. The court reiterated that the normal price at the factory gate should be the basis for determining the assessable value. The court cited several Supreme Court judgments, including A.K. Roy v. Voltas Limited and Union of India v. Bombay Tyre International, to support the view that the factory gate price should be used for assessment purposes when it is ascertainable.
4. Maintainability of the Writ Application
The respondents contended that the writ application was not maintainable due to the availability of alternative remedies. The court, however, held that the writ application was maintainable because the Trade Notice was issued without jurisdiction and constituted a nullity. The court cited various judgments to support the principle that when an order is ex facie without jurisdiction, the existence of alternative remedies does not bar the maintainability of a writ application.
5. Validity of Show Cause Notices Issued under Section 11A of the Central Excises and Salt Act, 1944
The petitioner challenged the show cause notices issued under Section 11A, arguing that the factory gate price should be the basis for assessment. The court quashed the show cause notices, holding that the respondents had no authority to re-determine the value of goods under Section 4(2) when the factory gate price was ascertainable. The court emphasized that the assessment should be based on the factory gate price, and the show cause notices were issued without proper jurisdiction.
Conclusion:
The High Court of Gauhati quashed the Trade Notice No. 2/87 and the related communications and show cause notices. The court held that the factory gate price should be the basis for determining the assessable value under Section 4(1)(a) of the Central Excises and Salt Act, 1944, and that the respondents had no authority to require separate price lists for depot sales or to re-determine the value under Section 4(2). The writ applications were allowed, and the parties were directed to bear their own costs.
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1994 (9) TMI 78
The petitioners challenged an order refusing to entertain their revision application due to filing beyond the time limit. The court allowed the petition, set aside the order, and remitted the proceedings back to the revisional authority for hearing on merits. Petitioners were required to pay costs as a condition precedent.
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1994 (9) TMI 77
Issues Involved:
1. Interpretation of the word "Given" in Sections 110(2) and 124(a) of the Customs Act.
2. Whether Section 110(2) of the Customs Act is a mandatory provision.
3. Validity of the show cause notice issued beyond the prescribed period.
4. Quashing of confiscation proceedings initiated under Section 110(1) of the Customs Act.
Summary:
1. Interpretation of the word "Given" in Sections 110(2) and 124(a) of the Customs Act:
The main question to decide was the interpretation of the word "given" as it appears in Sections 110(2) and 124(a) of the Customs Act. The petitioners argued that "given" should mean that the show cause notice must have been received by the person or at least reached or tendered to the person. Conversely, the Customs Authorities contended that "given" means the date on which the notice was issued by the authorities. The court accepted the petitioners' interpretation, stating that the word "given" must mean that the notice must have been received by the importer or at least reached them.
2. Whether Section 110(2) of the Customs Act is a mandatory provision:
The court examined whether Section 110(2) is mandatory. Section 110(2) stipulates that if no notice is given within six months from the date of seizure, the goods must be returned to the person from whom they were seized. The court held that Section 110(2) is indeed mandatory, and the Collector of Customs can only extend the period by another six months if sufficient cause is shown. Beyond one year, the Collector loses the power to extend the period, and a vested civil right accrues to the importer to get the seized goods released.
3. Validity of the show cause notice issued beyond the prescribed period:
The court discussed the importance of giving notice within the prescribed period and held that merely sending the notice by registered post does not fulfill the requirement of "given" as per Sections 110(2) and 124(a). The court referred to various judgments, including the Supreme Court's interpretation in K. Narasimhiah v. H.C. Singri Gowda, which stated that "giving" is not complete unless the notice reaches the person concerned. The court concluded that the show cause notice must be received or at least reach the importer within the prescribed period.
4. Quashing of confiscation proceedings initiated under Section 110(1) of the Customs Act:
The court held that the proceedings for confiscation under Section 110(1) cannot be quashed merely because the show cause notice was served beyond the period of limitation. The Supreme Court's decision in M/s. J.K. Bardolia Mills v. M.L. Khunger clarified that non-compliance with Section 110(2) only means the seized goods must be returned, but it does not render the initial seizure illegal.
Conclusion:
The court issued a writ of mandamus directing the respondents to release the seized goods to the petitioners within a fortnight, upon payment of customs duty, and to issue the requisite detention certificate for demurrage and other charges. The writ application was allowed in part with no order as to costs.
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1994 (9) TMI 76
Issues Involved:
1. Violation of principles of natural justice due to lack of personal hearing.
2. Whether the petitioner should be compelled to avail alternative remedy.
Detailed Analysis:
Issue 1: Violation of principles of natural justice due to lack of personal hearing
The petitioners, manufacturers of Phthalic Anhydride and Maleic Anhydride, were utilizing Marlotherm as an input under the Modvat Scheme. A show cause notice was issued challenging the credit availed on Marlotherm. The first respondent dropped the proceedings, allowing the credit. However, the Collector of Central Excise reviewed this order and directed the first respondent to apply to the second respondent, who subsequently allowed the appeal without granting a personal hearing to the petitioners.
The court noted that the petitioner had fully succeeded before the first respondent, and thus had no reason to file an appeal or cross-objections. Sections 35A(1) and 35B(4) of the Central Excises and Salt Act, 1944, provide for an opportunity of hearing to the appellant and allow cross-objections by the respondent, respectively. Since the petitioner was not aggrieved by the initial order, there was no requirement for them to seek a personal hearing.
The court emphasized that the principles of natural justice demand an opportunity of hearing, especially in quasi-judicial proceedings. The second respondent's failure to provide this opportunity rendered the order invalid. The court cited several precedents, including Union Of India v. Col. J.N. Sinha and Institute of Chartered Accountants of India v. L.K. Ratna, to support the necessity of adhering to natural justice principles.
Issue 2: Whether the petitioner should be compelled to avail alternative remedy
The court acknowledged that while alternative remedies exist, they are not an absolute bar to entertaining a writ petition under Article 226 of the Constitution of India. The rule is one of policy and discretion rather than law. In cases where natural justice is violated, the superior court has a duty to intervene.
The court referenced U.P. State v. Mohd. Nooh, which supports the issuance of a writ of certiorari in cases where procedural errors are so glaring that they cannot be rectified through appeal or revision. Given the violation of natural justice in this case, the court found it unnecessary to compel the petitioner to seek alternative remedies.
Conclusion:
The writ petition was allowed. The impugned order dated 8-4-1994 was quashed, and the case was remitted to the second respondent for fresh disposal on merits, ensuring an opportunity of hearing to the petitioner. No costs were awarded.
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1994 (9) TMI 75
The petition seeks quashing of a Central Excise order. Petitioners claimed exemption under a notification. A notification clarified no excise duty on copper wire rods for a certain period. Petition allowed, petitioners can seek refund of deposited amount.
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1994 (9) TMI 74
The High Court allowed the writ petition against the Collector's order declining to waive the pre-deposit condition under Section 35F of the Central Excises and Salt Act, 1944. The court found that the Collector did not consider the hardship claimed by the petitioner and directed a fresh decision on the waiver application. The impugned order was set aside, and the petitioner was granted a proper opportunity of hearing. Each party will bear their own costs.
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1994 (9) TMI 73
Issues Involved:
1. Classification of imported Coal Tar Pitch under the correct sub-heading of the Central Excise Tariff.
2. Validity of the show cause notice issued by Customs authorities.
3. Burden of proof regarding the manufacturing process of the imported Coal Tar Pitch.
4. Allegations of evasion of countervailing duty by the petitioner.
5. Whether the Customs authorities had prejudged the matter.
Issue-wise Detailed Analysis:
1. Classification of Imported Coal Tar Pitch:
The petitioner company imported Coal Tar Pitch, which they claimed was manufactured by the "cut-back" method and should be classified under sub-heading 2708.11 of the Central Excise Tariff, attracting a duty of Rs. 100/- per metric tonne. Customs authorities, however, suspected that the Coal Tar Pitch was manufactured by another method and classified it under sub-heading 2708.19, attracting a higher duty of 15%.
2. Validity of the Show Cause Notice:
The petitioner challenged the show cause notice issued by the Collector of Customs, Calcutta, arguing that it did not establish any concrete evidence that the imported Coal Tar Pitch was manufactured by a method other than the "cut-back" method. The court observed that the notice did not contain any positive conclusion regarding the manufacturing process and was based on suspicions without conclusive proof.
3. Burden of Proof:
The court reiterated that the onus of proving that the imported goods were different from what the petitioner claimed was on the Customs authorities. The authorities failed to provide positive evidence to support their claim that the Coal Tar Pitch was not manufactured by the "cut-back" method. The court cited the Supreme Court's decision in Deputy Commissioner of Sales Tax v. M/s. G.S. Pai & Co., emphasizing that the burden of proof lies with the Revenue authorities.
4. Allegations of Evasion of Countervailing Duty:
Customs authorities alleged that the petitioner company conspired with foreign suppliers to evade higher countervailing duty by fabricating documents. However, the court found no positive evidence in the show cause notice to support these allegations. The certificates provided by foreign suppliers indicated that the Coal Tar Pitch was indeed manufactured by the "cut-back" method.
5. Prejudgment by Customs Authorities:
The petitioner argued that the Customs authorities had prejudged the matter, as indicated by the language of the show cause notice. The court agreed that the notice appeared to be a roving enquiry to procure evidence rather than being based on existing conclusive proof. The court found that the notice and subsequent proceedings were initiated without a solid foundation and were liable to be quashed.
Judgment:
The court allowed the writ petition, quashing the show cause notice dated 23rd April 1992, and the proceedings initiated based on it. The court emphasized that the Customs authorities had not made out a prima facie case against the petitioner and lacked conclusive proof regarding the manufacturing process of the imported Coal Tar Pitch. The decision underscored the principle that the burden of proof lies with the Revenue authorities when imposing a higher rate of duty or tax. The court also stayed the order for four weeks and directed all parties to act on a xerox signed copy of the judgment.
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1994 (9) TMI 72
Whether a duty of excise was validly levied on "PVC compound" produced by the appellant from out of the duty paid PVC resin?
Held that:- "Marketability" is a decisive test for dutiability. It only means "saleable", or "suitable for sale". It need not be in fact, "marketed". The article should be capable of being sold or being sold, to consumers in the market, as it is - without anything more. The Appellate Tribunal has not adverted to the above vital aspects nor has it entered a finding that the PVC compound (Granules) is a "marketable product" as understood in law. The Appellate Tribunal was swayed by the fact that the conversion of PVC resin into PVC compound by the process employed by the appellants amounts to "manufacture" within the meaning of Section 2(f) of the Act and that by itself will justify the levy of duty. In our view, this is a palpable error committed by the Tribunal. In the absence of a finding, that the goods are "marketable" i.e. saleable or suitable for sale, we hold that the order of the Appellate Tribunal is infirm. It should be set aside and we hereby do so. We order a remit of the matter to the Appellate Tribunal to consider the appeal afresh and dispose of the same in accordance with law.
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1994 (9) TMI 71
Whether the metal screw cap put on the bottle of the Horlicks is no part of the manufacturing process, because the Horlicks itself is a finished product and ready for consumption when it reaches the bottling plant?
Held that:- When Item IB under which the product falls says, prepared or preserved foods put up in unit containers and ordinarily intended for sale, then for becoming an excisable article, Horlicks must be put in containers, ready for sale. The screw cap shall be deemed to be component part of Horlicks and Notification No. 201/79-C.E. aforesaid shall be applicable wherein the Central Government exempted all excisable goods on which duty of excise was leviable and in the manufacture of which any goods falling under Item No. 68 of the First Schedule of the Act had been used as raw material or component parts, from so much of the duty of the excise leviable thereon as was equivalent to the duty of excise already paid on the inputs. Appeal allowed.
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1994 (9) TMI 70
Whether `Throw Away Inserts' manufactured by the appellants fall in the category of Tool Tips or Tools?
Held that:- It is not the case of the appellant that its products are mounted on tools. The composition of its product is same as mentioned in Tariff Item 62. In shape or form it is not different from a Tool Tip, except that it has multiple cutting edges. Its function is the same as that of a Tool Tip. The fact that it is detachable and has to be thrown away after use, will not change its basic character or function. Appeal dismised
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1994 (9) TMI 69
Issues:
Scope of proviso to Section 11A of the Central Excises & Salt Act, 1944.
Detailed Analysis:
The appeal filed by a statutory body under the Factories Act raised a question regarding the scope of the proviso to Section 11A of the Central Excises & Salt Act, 1944. The appellant had two units - a concrete unit and a wood unit. The concrete unit's finished products were sold to outsiders and had a license under the Act. However, the wood unit's products were used internally, and the appellant believed no license was required for it. The Central Excise Department issued a notice under Rule 173 in 1984, alleging duty evasion. The Tribunal found that while the concrete unit was compliant, the wood unit required a license as it was engaged in manufacturing. The Tribunal rejected the appellant's claim of honest belief, stating there was no proof of acting diligently. The Tribunal inferred an intention to evade duty due to the lack of evidence that the wood unit was exempt from duty.
Section 11A of the Act empowers Central Excise Officers to initiate proceedings within six months, extendable to five years for fraud or suppression of facts. The proviso to Section 11A requires both specific situations (fraud, collusion, etc.) and intent to evade duty for its application. The burden of proof lies with the Department to establish the existence of situations under the proviso. Once proven, the burden shifts to the appellant to show no deliberate evasion of duty. The term "evade" implies a deliberate avoidance of paying duty known to be leviable. The case law clarifies that doubt regarding duty liability precludes invoking the proviso. In this case, the appellant, a non-profit body, had a license for the concrete unit but not the wood unit based on advice from the Excise Department. The Tribunal's finding of an intention to evade duty lacked a factual basis, as no deliberate act was proven.
In conclusion, the Supreme Court allowed the appeal, setting aside the Tribunal's order and quashing the duty and penalty notice. The Court found no basis for inferring an intention to evade duty by the appellant, given the lack of concrete evidence supporting such a conclusion.
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1994 (9) TMI 68
Whether the goods manufactured by the appellant fall in clause (a) as if it can be classified with reference to (a) then clauses (b) and (c) would not apply?
Held that:- On the finding recorded by the Assistant Collector, the goods produced by the appellant which are component part of the flow meter specifically fall in Heading No. 90.24. They may also fall in Heading No.90.26 but that being more general entry preference should have been given to the entry 90.24 as the goods satisfy most specific description of being flow meter. The Tribunal or the appellate authority without adverting to it applied clause (c) and levied duty under 90.26 as it was a latter heading. But clause (c) would apply only if clauses (a) and (b) do not apply. Since the goods manufactured by the appellant satisfied the specific description of Tariff Heading 90.24 being a flow meter, the Tribunal committed an error of law in classifying it under Tariff Heading 90.26 as it was a latter item under the classification list. Appeal allowed.
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1994 (9) TMI 67
Whether the particle boards manufactured by appellant are `unveneered particle boards' within the meaning of Item No. 6 of the table appended to the Notification No. 55 of 1979, and therefore, totally exempt from duty?
Held that:- The words `unveneered particle boards' in Item-6 of the table appended to the Exemption Notification cannot and do not take in melamine faced particle boards. Indeed, the learned counsel for the Revenue contends, and in our opinion rightly, that the said entry does not admit of any doubt, that it is clear and specific and that it covers only unveneered particle boards and nothing else. Appeal dismissed.The appellant has to pay the arrears of duty due according to law.
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9911796707
