TMI Blog1987 (8) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanations to the item which, not being relevant for the present disputes, have not been reproduced) With the changes brought about with effect from 1-3-1979, Item No. 34A read : Parts and accessories of motor vehicles and tractors, including trailers, the following, namely ;- (15 articles are specified in the item but air-brake and hydraulic brake hose assemblies do not figure therein. There are also two Explanations to the item which are not relevant for the present purpose). 2. Prior to 1-3-1979, Item No. 34A was of a wide amplitude taking within its sweep all parts and accessories of motor vehicles not elsewhere specified. However, by an exemption notification issued under Rule 8(1) of the Central Excise Rules, 1944, the Central Government had exempted all parts and accessories of motor vehicles falling under the said item except 12 articles specified in the Schedule to the Notification. Air and hydraulic brake hose assemblies were not in the list of specified items subject to duty. Though we are not concerned in the present disputes with determination of the issue whether, these hose assemblies fell for classification under Item 34A prior to 1-3-1979, we h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embly; air-leakage is tested with soap solution; after insertion of sleeves into hose adaptor, union nut is tightened. In the air brake system, hose assemblies are used to connect a pipeline to another pipeline for conveying air whenever flexibility is required, i.e., where the two points of the vehicle change their position in relation to one another. It is further stated that the hose adaptor, sleeve and union nuts are used solely for hose assemblies in air-brake system and are made to the Society of Automobile Engineer s standards. 10. Shri V. Lakshmikumaran made his submissions with reference to the appeals filed by Brakes India Ltd. According to him, the submissions on the issue of classification would equally apply to all the other cases also. It appears that Brakes India Ltd. filed a classification list classifying the subject goods under Item No. 34A during the period 1-3-1979 to 9-5-1979 and under Item No. 68 from 10-5-1979 onwards. The company addressed two letters - one dated 2-11-1979 and the other dated 29-11-1979 - to the Assistant Collector of Central Excise, Madras and contended therein that the fitment of nozzles, etc. to the hoses did not amount to manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of hose assemblies under Item No. 68, CET and demanding duty of Rs. 64,818.82 on the clearances of hose assemblies made from 14-2-1981 to 13-8-1981. He further ordered that all subsequent and future assessments of hose assemblies should be made under Item No. 68, CET. Briefly stated, the Assistant Collector s findings were :- (a) The letter dated 10-12-1979 to the assessee from the Superintendent (Technical) for Assistant Collector was not a quasi-judicial order. Hence the show cause notice dated 13-8-1981 and the consequent proceedings did not amount to review of any quasi-judicial order; (b) Under Section 11A of the Act, the Assistant Collector was empowered to demand payment of short levy, if any; (c) Hose assemblies were different from plain hoses, having a distinct trade name and were designed for a specific use unlike the plain hose which could be put to several uses. Hose assemblies were motor vehicle parts with specific part numbers. They were not known in the market as rubber products; (d) Government of India s instructions according to which hose assemblies manufactured out of duty paid rubber would fall under Item No. 16A(3), CET and they would not att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute are air brake hose assemblies. There are minor differences as to dates, amounts etc., but these are not really material to our discussions. The difference worth noting is that Sundaram Clayton made a claim dated 17-6-1980 for refund of duty paid on hose assemblies under Item No. 68 during the period from 1-5-1979 to 30-4-1980. The claim was received by the Assistant Collector on 21-6-1980. The Assistant Collector, therefore, held that the claim for the period from 1-5-1979 to 21-12-1979 was barred by limitation under Central Excise Rule 11. For the rest, the Assistant Collector, by his order dated 9-12-1981, rejected the claim on merits following his order dated 1-12-1981 (a) classifying hose assemblies under Item No. 68, CET and not 16 A, CET as had been earlier communicated to him by the Superintendent on 26-12-1979 and (b) demanding Rs. 1,55,506.37 towards duty under Item No. 68, CET on clearances of hose assemblies during the period 14-2-1980 to 13-8-1981 (the date of the show cause notice was 13-8-1981). The impugned order-in-appeal passed by the Appellate Collector also runs on the same line as in the Brakes India case. While setting aside the demand for duty for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notices contesting the action proposed therein. These are the two proceedings which are now, in accordance with Section 35P of the Act, the deemed appeals of the Collector of Central Excise, Madras before us. 16. Shri Lakshmikumaran submitted that the Superintendent s letter dated 10-12-1979 for the Assistant Collector conveying the decision that hose assembly was classifiable under Item No. 16A, CET and that since the hoses and discharged duty liability at the time of their clearance from the factory of production, the hose assemblies would not attract duty again under Item No. 16A, was a quasi-judicial order and the Assistant Collector s view to the contrary in his order of 19-11-1981 was wrong. He referred to certain authorities in support of this view. In any case, he submitted, no cogent reasons had been adduced to justify revision of the previous decision on classification. On the merits of the classification, he urged that hose assemblies retained the essential characteristics of a tube or a pipe which was for conveyance of liquid or gas. The jobs done on the hose pipe had merely served to improve its quality but that would not take it away from the category of pipe or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the Superintendent s letter of 10-12-1979 was a decision or order under the Act. 19. Shri Lakshmikumaran had referred to the Tribunal s decision in Siddheshwar Sahakari Sakhar Karkhana Ltd. v. Collector of Central Excise, Pune, 1987(27) E.L.T. 79 in support of his contention that the Assistant Collector could not have reviewed his previous decision. In that case, the Superintendent had initially partly sanctioned a refund claim for a certain amount, rejecting the claim in respect of the balance amount. Later on, the Superintendent recalled a portion of the amount earlier sanctioned which, according to him, had been wrongly sanctioned and directing the assessee to debit the amount in the P.L.A. Thus, the Superintendent was reviewing his earlier order. The Tribunal held that no quasi-judicial authority had a right to review its earlier order unless such a right to review had been expressly conferred by the statute. Apparently, no such right of review had been conferred in law on the Superintendent. In Ajanta Iron and Steel Co. Pvt. Ltd. v. Union of India Ors., 1986(23) E.L.T. 318, the Delhi High Court had held that once an Assistant Collector accords approval to a Class ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a new product with a distinct trade name and is designed for specific use in motor vehicles. It, therefore, appears that the hose assembly falls outside the purview of TI 16A(3) and would be classifiable under TI 68 as M.V. part not elsewhere specified . No other basis has been set out for the proposed action. The Assistant Collector s order dated 19-11-1981 classifying hose assemblies under Item No. 68 also does not show that any new facts had come to light. Nor had the Tariff entry undergone any change after 1-3-1979 during the period material to the present dispute. In the circumstances, the question arises whether the revised classification could be made operative so as to recover duty for the period of six months prior to the date of the show cause notice. A similar question came up before the Tribunal in Steel Authority of India Ltd., Durgapur v. Collector of Central Excise, West Bengal, Calcutta, 1985(22) E.L.T. 487. The assessee s contention in that case was that the Excise authority could not go back even six months from the date of the show cause notice assuming that the Department s stand on classification was correct because of the non-existence of any fresh reason fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admittedly (there is no dispute about this), a part of motor vehicles. The argument that even the bare hose pipe is specially designed for use in the production of hose assembly and that the function of the hose assembly is the same as that of the hose pipe, namely, conveyance of fluid or gas, does not detract from the position that hose assembly is a new product which is the result of application of certain processes and fitment of certain items, and is known and recognised as a motor vehicle part. On the basis that the function of the bare hose pipe and the hose assembly is the same, it is urged for the assessees, the two cannot be classified differently and that the hose assembly does not cease to be a hose pipe. The contention is that the hose assembly continues to remain under Item No. 16A(3), CET and to enjoy exemption under Notification No. 197/67. We have found that the hose assembly is not the same thing as the bare hose pipe. It is converted into a brake hose assembly by cutting the hose into requisite size, addition of end fittings etc. Its very name shows that it is an assemblage of more than one thing, the things being the bare hose pipe and fittings. It is nobody s ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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