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TMI Blog1992 (10) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirmation of the demand made for 6 months. As the issue involved is common, both the appeals are taken up for disposal as per law. 3. As regards the classification of the item fasteners is concerned, the matter is no longer res integra and the same has now been settled by the Apex Court in the case of Plasmac Machine Mfg. Co. Pvt. Ltd. v. Collector of Central Excise [1990 (51) E.L.T. 161]. The same has also been followed by the Tribunal in the case of Hindustan Motors v. Collector of Central Excise [1992 (59) E.L.T. 448]. The Hon'ble Supreme Court has held in the cited case that the fact that the Tie-bar nuts' function of fixing the platens as stated by the appellants and that of fastening, as argued by them, are not basically different, and the appellants themselves having called the goods 'nuts', we are of the view that the Tribunal is correct in classifying Tie Bar Nuts under TI 52. We therefore, do not find any reason to interfere with the department's prospective modification of the classification. We find no justification for classifying those in the residuary Item 68. As was held in Dunlop India Ltd. - 1983 (13) E.L.T. 1566 (S.C.) (supra), if an article is classifiable un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corp. Ltd. v. Superintendent of Central Excise [1981 (8) E.L.T. 642 (Delhi)] in which it was held that non-mention of the amount of demand would not render the show cause notice void and illegal. They contended that the show cause notice was duly issued to the party for the proposed reclassification of certain items while notices dated 30-6-1981 and 23-5-1983 and what was issued on 19-10-1983, is only a corrigendum to the original show cause notice specifying the amounts of duty demanded under Section 11A. As the Collector (Appeals) has upheld the reclassification of the items, the proceedings for which were initiated by show cause notices dated 30-6-1981, 23-5-1983, the Collector ought to have upheld the demand of differential duty as raised and confirmed by the Asstt. Collector. In this context, the Revenue is asking for confirmation of the order of the Asstt. Collector with regard to the duty demanded to an extent of Rs. 16,65,382.56 P. made in the corrigendum show cause notice dated 19-10-1983 and to hold that it is not barred by time as reclassification notice had been issued giving notice to the party by show cause notice dated 30-6-1981 and 23-5-1983. 5. The assessee is se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he correct classification in the opinion of the department was under TI 52. Therefore, these notices have to be examined in order to determine whether these notices could be considered as relating to a demand for differential duty, on account of erroneous assessment or erroneous classification I note that the first notice issued proposed reclassification and did not allege short levy. Therefore, what the department sought under this notice was a revision of an approved classification and this notice could not be treated as a notice issued under Section 11 of the Act, as the essential attributes of such a notice viz. specifying the period of short levy and quantifying the duty short levied were found missing. The second notice also suffers from the same infirmity, except that it conveyed to appellants the decision of the Asstt. Collector to drop further proceedings in respect of 41 items. Hence, this notice also could not be considered as a notice for short levy. The third notice which was issued on 23-5-1983, proposed reclassification of all the 62 items under Rule 173-B(4)(c) and strangely demanded duty under Rule 9(2) of the Central Excise Rules, 1944. This notice also did not co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed was made by the department only on 19-10-1983 logically this demand would cover all the 62 items, including 41 items in respect of which proceedings for reclassification were dropped by the predecessor Asstt. Collector." 6. We have heard Shri J. Nair, learned DR for the Revenue and Shri V. Sridharan, learned advocate for the assessee. Shri Nair submitted that the fresh show cause notice dated 30-6-1981 was issued suggesting reclassification of 62 items as they performed fixing function, the party had submitted their reply. The department again issued a revised show cause notice dated 4-5-1982 suggesting reclassification of 21 items out of 62 proposed earlier. The party again submitted their reply. On 25-3-1985, another show cause notice was issued invoking all the 62 items earlier proposed for reclassification under TI 52. By corrigendum show cause notice dated 19-10-1983, duty was specifically computed and a demand was raised on the basis of reclassification suggested in respect of 62 items in the fresh show cause notice demanding duty for Rs. 16,36,382.56 P. under Section 11 A of the Central Excises and Salt Act, 1944. The Asstt. Collector confirmed the demand for a period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that Section 11A contemplated issue of notice within six months and the notice should be served with the demand on the person liable to pay and the notice should clearly specify the amount that is to be recovered. He further contended that proviso 2 of Section 11A clearly states that the Asstt. Collector shall after considering their representation, determine the rate of duty of excise due from such person, therefore, the order should specify the amount which should not be more than the amount specified in the show cause notice. Therefore it is his argument that the show cause notice should specify the amount which is a vital ingredient and not an empty formality. There should be a plea of short levy. The first show cause notice did not specify the rate of valuation and therefore, it is not a show cause notice under Section 11A of the Act. The show cause notices issued on 30-6-1981 and 25-3-1983 did not specify the attributes of Section 11A. Therefore, the learned Collector after analysis of the show cause notices has held that the corrigendum show cause notice dated 19-3-1983 is a valid show cause notice and duty demanded for 6 months from this date is not recoverable and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Hindustan Aluminium Corp. Ltd. and also in the case of Industrial Coatings [1988 (36) E.L.T. 693]. Sh. V. Sridharan submitted that the ratio of the Industrial Coatings case is distinguishable. 10. We have carefully considered the submissions and perused the records. By the corrigendum dated 19-10-1983 to the show cause notice dated 23-5-1983, the appellants were asked to show cause why a duty amount of Rs. 16,65,382.56 P. should not be collected under Section 11A and payments paid under protest (since 3-7-1981) should not be vacated. The duty demanded was computed by demanding duty for the period 1-1-1981 to 30-6-1981 for 21 items and for 41 products for the period 24-11-1982 to 23-5-1983. The 21 items comprised the 20 hub bolts and nuts and the Banjo bolt. The 41 items were 37 items adjudicated previously by the Asstt. Collector and 2 adjusting screws and 2 bleed screws. The appellants had pointed out that by the revised show cause notice dated 4-5-1982, it had been held that 41 items were classifiable under TI 68. That apart, the Asstt. Collector had previously approved the classification list of the 62 items made under TI 68 and there were no new facts or changes in the Statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Supdt. of Central Excise, Range-VIA C No. V/52/30/8/81 19-10-1983 Sub : C. Excise BNS Manufactured by M/s. Sundaram Fasteners Ltd. - Review of classification items - Reg. In para 3 of the above show cause notice for the line "and why duty should not be collected under rule 9(2) of the said Rules", the following may be substituted: "and why duty of Rs. 16,65/382.56 P. as detailed in the annexure enclosed should not be collected under section 11A of the said Act and as to why the protest lodged in this regard from 3-7-1981 should not be vacated". "In view of the above corrigendum, you may make further submissions, if any, within 7 days from the date of receipt of this corrigendum. Sd/- 29-10-1983 Supdt. Tech. To M/s. Sundaram Fasteners Ltd. (Annexure to the corrigendum to the show cause notice dated 25-5-1983 is not reproduced here)." Therefore, as can be seen from these facts, the corrigendum dated 19-10-1983 is not a show cause notice but it brought correction to the show cause notice dated 23-5-1983 to specify the amount of duty and specify the provision of law. Therefore, the show cause notice dated 23-5-1983 is a valid notice for recovery of demands for 6 months ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lore Another (supra). After a detailed analysis of the provisions of law vis-a-vis the citation, the Hon'ble High Court has concluded that the Revenue has powers to reopen the classification and recover the short duty. The contentions raised by the appellants in this appeal are similar to the one as in the case of Gurupriya Tele Auto P. Ltd. and therefore, the ruling of this High Court would apply to the facts of the case. 12. The reopening of the classification and recovering duty 6 months prior to this period of issue of show cause notice under Rule 173B(4)(c) of Central Excise Rules and demanding duty under Rule 9(2) has been upheld by the Supreme Court in several rulings - Shri Jaishree Engg. Co. P. Ltd. - 1989 (40) E.L.T. 214 (S.C.) = 1989 (21) ECC 166 (S.C.): Tata Iron and Steel Co. v. Union of India & Others - 1988 (35) E.L.T. 605 (S.C.) - (supra); Elson Machines (P) Ltd. v. Collector of Central Excise - 1988 (38) E.L.T. 571 (S.C.) = 1989 (19) E.C.C. 80 (S.C.) (supra). Therefore, the contention of the appellants that the amounts are time barred is without any merits as in the present case, the show cause notice dated 19-10-1983 is a mere corrigendum to mention the duty amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s "ought to have been paid". Similarly even in cases where there has been a nil assessment due to one or other of the circumstances mentioned in Rule 10 and if subsequently it is found that duty is payable, then the entire amount of duty should be considered to have been short levied. The literal meaning of the expression 'paid' as actually paid in cash has again not been adopted by the Court of Appeal in [(1968) 1 QB 487]. Having regard to the context in which the said expression appeared in the particular provision which came up for interpretation, the Court of Appeal construed the expression to mean "contracted to be paid". Therefore, the contention of Mr. Daphtary that the expression 'paid' should be construed as 'ought to have been paid and even when no duty has been assessed, the entire duty when subsequently assessed will be a short levy, which is also supported by the decision of this court in (1963 3 SCR 893)=(AIR 1963 SC 1062), has to be accepted. It follows that in order to attract Rule 10, it is not necessary that some amount of duty should have been assessed and that the said amount have also been actually paid. That provision will apply even to cases where there has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d was competent to make demands both under Rule 9(2) as well as under Rule 10. If the exercise of a power can be traced to a legitimate source, the fact that the same was purported to have been exercised under a different power does not vitiate the exercise of the power in question. This is a well settled proposition of law. In this connection, reference may usefully be made to the decisions of this court in P. Balakataiah v. The Union of India (1958 SCR 1052) = (AIR 1958 SC 232) and Afzal Ulah v. State of UP (1964 4 SCR 991) = (AIR 1964 SC 264). Further a common form is prescribed for issuing notices both under Rule 9(2) and Rule 10. The incorrect statements in the written demand could not have prejudiced the assessee. From his reply to the demand, it is clear that he knew as to the nature of the demand. Therefore, I find no substance in the plea of limitation advanced on behalf of the assessee." 14. The Tribunal in the case of Tinplate Co. Pvt. Ltd. v. Collector of Central Excise, Patna [1983 (14) E.L.T 1807 (CEGAT)], has also held that show cause notice is not invalid if specific amount of demand is not indicated provided period of demand, quantity of goods and rate of duty is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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