TMI Blog1988 (3) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... cks which is classifiable under T.I. 68 of the C. Ex. Tariff. With the reaction of free fatty acids and alkali, a partial saponification to the tune of 10 to 15% takes place forming semi liquid soap in the soap stock. The soap stock is poured down in the tanks at the ground flour by the gravity itself. These tanks are equipped with steam pipe lines for heating the soap stock. From these tanks, the soap stock at 30% total fatty matters and 50% moisture pumped by 10 H.P. Gear pump to the soap pans situated at the first floor of the soap factory situated at 30 ft. height from the ground floor. Each soap pan is equipped with 3 steam pipe lines extending from the top to different heights inside the pan. The steam pipes are directly connected in soap pans from boiler. The steam pressure in all cases whenever steam is used is connected wilth 40 Ibs steam pressure. The soap pans are also equipped with one water pipe. The common salt about 2% is added to the boiling soap stock at 100 C in these soap pans. This process is called graining. Here the water gets separated from the bottom of the pan by virtue of its increased specific gravity. The boiling with steam is continued for complete sapo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 226 and why duty amounting to Rs. 13,49,017.91 Paise should not be demanded under Rule 9(2) read with Section 11-A of the Central Excises and Salt Act, 1944. They were also asked to explain why the goods seized from them should not be confiscated under Rule 173-Q of the Central Excise Rules. 3. The defence against the above charges taken by the appellants before the Collector of Central Excise, Indore was that by his Order-in-Appeal No. Soap 1 of 1969, dated 28.4.1970, the Collector of Central Excise, Nagpur, set aside the Order No. C. No. V(915)30-3/68/3033, dated 13.3.69 in which the Assistant Collector held that soap manufactured in their factory could not be treated as exempted from duty and accordingly, he asked them to pay duty. Appellants contended that show cause notice could not be issued to them contrary to the said order, dated 28.4.70 of the Collector. They also contended that they did not use power in the manufacture of soap, and hence, they were eligible to exemption under Notification No. 28/64-C.E., dated 1.3.64. They further contended that the demand for duty was barred by limitation. 4. By the impugned order the Collector of Central Excise, Indore has rejecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized goods. 5. The contention of the appellants before us is on the same line as taken before the Collector of Central Excise, Indore. During the hearing before us, the learned Advocate for the appellants has stated that steam was used for keeping the liquid soap-stock in tank. Power was used for pumping liquid soap-stock for the manufacture of soap. Liquid soap-stock and soap were two different commodities falling under separate Tariff Items No. 68 and 15 respectively. Soap was manufactured by the appellants without the aid of the power and hence, benefit of exemption under Notifiction No. 28/64-C.E., dated 1.3.64 was admissible to them. The process of manufacture has been described in page-2 of the impugned order. There was no change in the plant, machinery and the process of manufacturing. The classification lists filed on 8.12.80, 12.9.83 and 20.9.83 were approved by the Department. The classification could not be re-opened contrary to the Collector s order dated 28.4.70, as there was no change in the process of manufacture. The learned advocate has further argued that Collector s order, dated 28.4.70 was final and it was binding on the Subordinate Officers. Show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of manufacturing process. The power was used for transporting raw materials and steam was used for heating raw material. She has argued that the benefit of exemption notification was not, therefore, available to the appellants. She has distinguished the facts in some of the decisions relied upon by the learned advocate. Regarding the plea of long standing practice, she has stated that this plea is not acceptable as there was change in the manufacturing process of soap since 1981. So, demand for duty upto 6 months prior to the date of show caue notice is sustainable. 7. We have gone through the case records and have considered the arguments. Regarding the first contention of the appellants that order, dated 28.4.70 of the Collector of Central Excise, Nagpur was final and no show cause notice could be issued by the Assistant Collector of Central Excise contrary to that order, we find that Collector of Central Excise, Indore in the impugned order was justified in observing that the said Appellate order, dated 28.4.70 was not speaking order. We reproduce below the contents of the said order ; Having regard to the facts and circumstances of the case and the grounds urged in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Versus Collector of Central Excise, Pune, reported in 1987(27) E.L.T.-79 (Tribunal), it was held that Quasi-Judicial Authority was not competent to review its earlier order. The ratio of the earlier decisions can be applied only in cases having identical facts. The facts in the present case are not similar to the facts of the cases relied upon. In this case there was a change in the manufacturing process, and hence, there was no bar in reopening the issue decided by the appellate authority much earlier than the change. For the same reason, we do not consider that the ratio laid down in the Supreme Court decision in A.I.R. 1972 S.C. 2466 is applicable in the present case. We do not agree with the plea that long standing practice could be changed prospectively only. This plea could have some force if there was no change in the process of manufacture since 1981. Even otherwise, under Section 11-A of the Central Excises and Salt Act, demand for duty can be raised for a period of six months prior to the date of issue of notice. It was held by the Hon ble Karnataka High Court in their decision reported in 1985(22) E.L.T.-751 (Karnataka) in the case of Shyam Sunder U. Nichani Versus As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, for transporting raw materials to the storage tank before such raw materials were put to use in the process of manufacturing. It was in that context that the Hon ble Gujarat High Court held that use of power in transporting raw materials from motor tank to the storage tank could not be said to be use of power in the process of manufacturing the final product. In the present case before us the facts are not similar to the case decided by the Hon ble Gujarat High Court. In the case of the appellants before us, the power was used for transferring the soap stock to the soap stock pans in the process of manufacturing soap. Steam was also used for heating soap stock in the process of manufacturing the soap. Appellants case is, therefore, clearly distinguishable from the case decided by Hon ble Gujarat High Court. In the case of Fargo Mantle Products (P) Ltd., Bombay Vs. Collector of Central Excise, Bombay, reported in 1986(26) E.L.T. 561 (Tribunal), the assessee used electric power for ironing the gas mantles, preceding their packing in a butter paper envelope. The Gas mantles even before ironing were ready for use as gas mantles and, infact, even after ironing they had to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial whether soapstock be regarded as a raw material for soap or as an intermediate product. On its plain words, the notification is concerned only with the processes carried on by the manufacturer who produced the soap sought to be charged with duty. The soap referred to is that cleared for home consumption by any manufacturer . Anterior processes, by which the ingredients of that soap were manufactured by other manufacturers, are beyond the ken of the notification. Hence, one must confine one s attention to the activities of the manufacturer in whose hands the soap is subjected to duty. 10. There is no warrant in the words of the notification for injecting into it any wider or deeper consideration of the question whether power or steam have been used in the process of manufacturing the soap. A somewhat similar attempt to introduce extraneous ideas in applying a notification exempting aluminium products from duty under the Act, was castigated by the Supreme Court in an unreported case entitled Aluminium Corporation of India Ltd. V. Union of India and Others, decided on 22nd August, 1975 [1978 E.L.T. (J. 452)]. The futility of the view canvassed on behalf of the excise authori ..... X X X X Extracts X X X X X X X X Extracts X X X X
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