TMI Blog1986 (7) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... ine manufactured by the respondents, the concessional rate of 2-1/2% under the notification was permissible and not 12-1/2%. 2. On 8.10.1984, the Collector of Central Excise, Baroda issued a direction to the Assistant Collector under Section 35E(2) of the Central Excises Salt Act to file an appeal under Section 35E(4) to the Collector (Appeals), Bombay in respect of two products covered by the Asstt. Collector s order namely, Resteclin IM Injection and Steclin IM Injection and an appeal was accordingly filed before the Collector (Appeals) on 18.10.84. Subsequently, the Collector of Central Excise, Baroda issued a further direction to the Assistant Collector directing him to file an appeal in respect of the remaining seven medicines also and this appeal was accordingly filed on 9.1.85. 3. By his order-in-appeal passed by the Collector, dated 26.8.85, he rejected the appeal filed on 18.10.84 as time barred and by an addendum, dated 9.9.85 to the order-in-appeal, he also added the references to the appeal, dated 9.1.85. In rejecting the appeal as time barred, the Collector relied upon the Larger Bench decision of this Tribunal in the case of Atma Steels (P) Ltd. and Others repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was available under Section 35E(2) and it should continue to be available notwithstanding the amendment of that provision, in the absence of a clear indication to the contrary in the amended provisions. According to him, the right which had accrued to the Collector to direct the filing of an appeal within two years from the date of Assistant Collector s order could not be taken away in the absence of an express provision in the amending legislation. So long as a particular period of limitation was available to a party, it could not be asked to explain any delay during that period. He further argued that the question involved in the Atma Steels case was quite a different one and it does not have any analogy in the present case. The question before the Larger Bench in that case related only to the effect of amendments made to various rules relating to short-levy, non-levy or refund of duty and, therefore, it would be wrong to conclude that this issue which is involved in the case relating to the order passed under Sec. 35E(3) is also finally settled by the decision of the Tribunal in the case of Atma Steels. He further pointed out that decision dealt with procedural law and not subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that any amendment which destroys a cause of action should not be given retrospective effect. The amendment brought about in 1984 Finance Act to Section 35-E which came into effect on 11.5.84 neither by implication nor otherwise could be given retrospective effect. In the circumstances, the learned Departmental Representative urged that the rejection of the appeals by the Collector (Appeals) as time barred based on the decision of the CEGAT in the Atma Steels case was bad in law. 5. Appearing for the respondents, the learned counsel Shri A.H. Desai. Senior Advocate along with Shri K.S. Nanavati and Shri G. Ganesh, Advocates submitted that the judgment in the case of Atma Steels-1984 (17) - ELT - 331 directly applies to and covers the issue arising in this case in favour of the Respondent company. The following issues decided in the Atma Steels case completely cover the issues arising in the present case: i) There can be no claim of vested right by the State (Para 73 of the judgment). ii) There can be no concept of vesting of any rights since the rights are merely inchoate until there is an adjudication in favour of the State (Para 76). iii) A legislation which seeks to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this connection, it is important to note that Section 35-E itself was not in existence at the point of time when the Show Cause Notice was issued (Le. on 2.5.81) as to why the product should not be re-classified. The chronology of events would show that all the relevant events namely, the company s application for the benefit of the relevant notifications, the various classifications and re-classifications in favour of the company and the levy of a lesser charge of duty all transpired long period to the introduction of Section 35-E (i.e. 11.10.82). On the argument of the Department itself, therefore, there could be no proceedings under Section 35-E as the so called right of the Revenue vested, if at all, at a point of time when Section 35-E was not on the Statute book. It is submitted that the Department has no vested right arising under Section 35-E. If the Department wants to rely on Section 35-E, it can only rely on it as giving rise o a right at the time when the Section 35-E application is made. On this view, the Section 35-E(2) applications in the present case are clearly beyond limitation and are barred. But, if the Department wants to invoke the theory of vested right, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self under that Section by passing an order in review. It is in effect an appeal only and the provisions are only to ensure that direction to file appeals are given on due consideration and to discourage frivolous appeals being filed. Again, the breathing time concept as given by the counsel presumes that every Bill which is produced in the Parliament will be passed as an Act which may not always be the case, and, therefore, this argument is not valid. He pointed out that the Supreme Court decision in AIR 1957 - SC - 540 squarely covers the case and a perusal at Page 545 thereof would show that no distinction has been made between a private party and the State vide para 25. This decision clearly lays down that a vested right of appeal cannot be taken away by subsequent enactment except by an express provision. Further, even applying the Atma Steels case criterion, the right here is no longer inchoate as the matter has already been adjudicated upon. He emphasized that Section 6 of the General Clauses Act specifically provides that a repeal should not affect rights which had accrued before the date of repeal, and it was urged that no interpretation can be given which would render the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, would be applicable only to the appeal referred to in the body of the order-in-appeal, dated 26.8.85. Therefore, the disposal of the second appeal by way of an Addendum to the order-in-appeal, dated 26.8.85 is bad in law. 9. The respondents in this case have heavily relied upon the Larger Bench decision of the Tribunal in Atma Steels which, according to them, squarely covers their case, whereas the learned Departmental Representative has argued that the question involved in that case was quite a different one and it did not have any relevance to the present case. We have carefully perused the judgment of the Tribunal in the Atma Steels case and we are of the view that the question before the Larger Bench in that case was a different one relating mainly to the effect of the amendments made to various Rules relating to short-levy or non-levy of duty and it does not touch upon the provisions relating to appeals as. such. It is further observed that this Tribunal while dealing with the case of Nagarjuna Steels Ltd. v. Collector of Central Excise, Hyderabad [1985 (21) - ELT - 854], relating to a refund claim where the question of limitation was involved, had considered the Atma S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss provision making the reduction in the period for seeking a revision under Sec. 35-E(3) from 2 years to 1 year to expressly have a retrospective effect. The amended provisions came into effect from 11.5.84 and in this case, since the order which is sought to be reviewed was passed on 12.1.83 being prior to 11.5.84 cannot be held to be hit by time bar in the absence of an express provision in the amending enactment giving the amendment retrospective effect. It is further seen that if one were to apply the amended provisions to the present case, then since the Assistant Collector s order is, dated 12.1.83, the one year period would expire on 11.1.84 i.e. it would become time barred even before the amendment took effect i.e. from 11.5.84, which, admittedly, could not have been the intention. In the light of the Supreme Court decision in 1957 - SC - 540 cited above, which decision was also not before the Tribunal while considering the Atma Steels case, and having regard to the concept of breathing time laid down in the Rajasthan High Court judgment (AIR 1962 Raj. 43) stating, when there is no expressed breathing time provided in a new legislation, the remedy must continue to be gover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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