TMI Blog1998 (6) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer. 1.2.2 Initially on classification lists (C/Ls) dated 1-3-1986, 11-4-1986, 21-7-1986, 1-3-1987, 4-5-1987 and 29-5-1987 filed by the manufacturer, classification of the said product was made by the Revenue under Tariff Heading (TH) 44.06 or 44.08 which were not disputed by the appellants herein. Hence these C/Ls got finally approved. 1.2.3 Later on, vide CLs dated 1-3-1988 and 5-4-1988, the appellants claimed classification of the said product under Tariff Heading 44.10. These two CLs were approved provisionally on 22-4-1988 and 29-4-1988. Simultaneously, two show cause notices dated 22-4-1988 and 29-4-1988 were issued by the concerned Asstt. Collr., C.E. (ACCE), Digboi proposing to classify the product under T.H. 44.08. He passed adjudication orders dated 1-12-1988 upholding the classification under t.h. 44.08. The appellants herein on appeal before the Collector (Appeals) did not succeed who vide his order dated 30-5-1989 upheld the classification under t.h. 44.08. 1.2.4 Against the said order dated 30-5-1989 of Collr. (Appeals), the appellants herein filed a writ petition bearing No. C.R. 1025/89 before the Hon ble High Court of Guwahati. The said Court passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er manufacturers by different orders as well as of the appellants vide Order No. E/790-92/90-D, dated 18-12-1990 since the Revenue had challenged all such orders of classification of the product before the Supreme Court by filing appeals under the C.E. Act, 1944. 2.1.2 Thereupon, the appellants filed a writ petition bearing C.R. No. 2861/91 before Guwahati High Court which passed an order dated 20-5-1991. It is appropriate to reproduce the relevant portions of the same. The petitioner demands refund of Rs. 1,00,78,427.86 P. from the respondents. This writ petition is covered by the decision reported in 1990 (2) GLJ 86, M/s. Assam Industrial Corporation v. Union of India and Others. Learned Sr. Central Govt. Standing Counsel does not dispute the liability but submits that the respondents be given liberty to correct if there by any mistake in calculation. This liberty is granted. Having regard to the fact that the subject matter is covered by the decision of this Court referred to above, the respondent authorities are directed to refund the amount of Rs. 1,00,78,427.86 p. The respondents are granted two months time to make the payment. Learned Counsel Mr. D.N. Barua claims ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -1991 (two C/Ls on this date) and 9-10-1991. These C/Ls were approved provisionally by the A.C.C.E. u/T.H. 44.10 in view of Guwahati High Court s interim C.R. No. 543/91, dated 25-3-1991, mentioned supra. 4.1.1 In the Finance Bill, 1992, further amendment in the schedule to CETA, 1985 was carried out to classify the product u/T.H. 44.08. Nevertheless the appellants filed C.L. claiming the rate of duty applicable to T.H. 44.10 but the said C/L dated 1-3-1992 was approved provisionally u/T.H. 44.08 by the A.C.C.E. 4.1.2 The said approval, on challenge before Guwahati High Court, resulted firstly in interim C.R. 944/92, dated 28-5-1992 directing classification u/T.H. 44.10 but on final disposal of the C.R. 944/92, on 22-3-1993, the appellants lost to Revenue. 4.1.3 The appellants challenged the said judgment dated 22-3-1993 of Guwahati High Court before the Apex Court which did not grant stay on recovery of duty in terms of classification u/H 44.08 for future clearances but granted stay on recovery of past arrears subject to furnishing of the bank guarantee by the appellants. Consequently, the appellants furnished a bank guarantee for Rs. 20,26,657.79 for arrears upto 17-3-1993. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns upon this plea so far as the dispute of demand is concerned. 8.3.1 His submissions on the aspect of provisionality of C/Ls are :- (i) There can be no provisional approval (assessment) on the basis of a dispute pending in Court. For this proposition, he relies on Tribunal s judgment in the case of Garware Plastics Polyesters Ltd. v. C.C. - 1995 (79) E.L.T. 297 (para 4). (ii) No assessments can be said to be provisional once the C/L has been finally approved. He relies on : (a) 1986 (23) E.L.T. 318 (Del) [Ajanta Iron Steel Co. v. U.O.I.], and (b) 1997 (95) E.L.T. 154 (T) [Indian Aluminium Co. Ltd. v. C.C.E.]. (iii) C/Ls dated 1-5-1989, 14-6-1989 and 6-7-1988 were approved provisionally in view of Guwahati High Court s order dated 13-7-1989 in C.R. 1025/89. These lists cannot be treated to be provisional, u/r 9B because the procedure u/r 9B i.e. bond for differential duty has not been taken. It was neither asked for by the department nor furnished by the appellants. For this proposition, he relies on Tribunal s decision in the case of Universal Paper Mills Ltd. v. C.C.E. - 1998 (97) E.L.T. 349 (Tribunal) = 1997 (20) RLT 285. (iv) Even if some of the C/L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , either on a written request made by the assessee or on his own accord, allow such assessee to avail himself of the procedure prescribed u/r 9B for provisional assessment of the goods . 8.3.5 We, therefore, hold that it is Rule 173B which gives the authority to approve a classification list provisional and not Rule 9B. That latter rule provides the basis for the procedure for approving the C/Ls provisionally. Procedure envisaged by Rule 9B is that the manufacturer has to furnish a bond in proper form for differential duty that may take place, if any, in resorting to provisional classification. Thereafter, on finalisation of enquiry or dispute or any cause resulting in provisional approval, final approval to C/Ls shall be accorded. 8.3.6 Each C/L, therefore, has to be seen whether it is provisional and final. 8.3.7 We note that all C/Ls filed in 1986 and 1987 as referred to in para 1.2.2 are final. No provisional approval was made by the proper officer in respect of any of those C/Ls. Nor were they disputed by the appellants because they themselves, on their own, classified the goods u/h 44.08 or 44.06 and not u/h 44.10. 8.3.8 It is for the first time that dispute started w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s own accord to approve a C/L provisionally, on following of the procedure under Rule 9B, for reason to be recorded in writing. Therefore, even if there had been no direction to levy and collect duty under Heading 44.10 from Guwahati High Court, the Asstt. Collr. was fully competent to approve the C/L provisionally after recording the reason that a dispute on classification was sub-judice before Guwahati High Court. As regards the plea of non-furnishing of a bond to detract from the provisional character of C/Ls, we observe that this is only a procedural aspect. In any case, non-furnishing of the bond by a manufacturer may pre-judice Revenue inasmuch as it may not be able to enforce liability in a Court of law in the absence of bond but it cannot pre-judice the manufacturer. What is material for determining whether a C/L has been approved finally or not is to find whether there is an order for provisional approval of C/L. This is clearly available in the three C/Ls dated 1-5-1989, 14-6-1989 and 6-7-1989. Therefore, we hold that three C/Ls were provisionally approved and were therefore, finalised by Asstt. Collector, C. Ex. in his order dated 2-6-1995. 8.4 C/L dated 20-3-1990 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed in 1995 by Guwahati High Court relying on Apex Court s judgment in Woodcraft, it would only be the appellants claim of interest on refund amount which alone was kept pending. Revenue s reliance on that dismissal is futile, submits the ld. Advocate, for the purpose of the aforesaid demand of over Rs. 94 lakh. 10.3.3 Further submission of the appellants ld. Advocate is that the Revenue filed S.L.P. before Apex Court against C.R. 2861/91, dated 20-5-1991 of Guwahati High Court but without success. 10.3.4 Revenue granted the refund in 1991 subject to decision of the Apex Court on S.L.P. That refund therefore, became final on dismissal of S.L.P. 10.3.5 Once the refund of duty has been granted, a show cause notice for recovery of erroneous refund could be issued only within six months of the date of payment of erroneous refund in terms of Section 11A inasmuch as there is no allegation for applicability of larger time limit of five years, nor could there be any such allegation in the facts and circumstances of the case. Thus the show cause notice dated 6-7-1995, submits the ld. Advocate is grossly barred by time. 10.3.6 Contention of the Revenue that time-limit of six ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he effect that levy and collection for duty could only be under Heading 44.10, CEGAT vide its order dated 8-12-1990 upholding t.h. 44.10 and thereafter an appeal was pending in the Apex Court against CEGAT s order dated 8-12-1990, so far as the appellants were concerned, there was no reason for the A.C.C.E. to serve a show cause notice on the appellants. All these facts clearly amount to a virtual stay on service of show cause notice. 10.4.4 Ld. Advocate has submitted that Guwahati High Court s order dated 20-5-1991 in C.R. 2861/91 was only an interim order as it is apparent from the final disposal of writ petition bearing C.R. 2861/91 by way of its dismissal in 1995 relying on Apex Court s ruling in Woodcraft. It is well settled, submits the ld. Advocate for the Revenue, that a relief or benefit obtained by a petitioner/appellant during the pending of the writ petition, by force of an interim order pending final disposal of the petition/appeal, is to be restored or returned on dimissal of the petition/appeal. Therefore, the amount of refund of duty of over Rs. 94 lakh paid to the appellants during the pendency of their writ petition bearing C.R. 2861/91 by virtue of Guwahati Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue was delaying payment of sums due to the appellants on the basis of classification of blockboard u/h 44.10 holding the filed at that time. If the Revenue considered it to be erroneous refund at that time, it had the remedy available to it under the Act i.e. by issuing a show cause notice within six months of the refund u/s 11A of the Act. From a reading of C.R. 2861/91, dated 21-5-1991, it appears that Revenue did not consider it to be erroneous inasmuch as the C.R. records that the Counsel for the Revenue does not dispute the liability but submits that the respondents be given liberty to correct if there be any mistake in calculation . The liberty was granted. This remedy of issuing the show cause notice within six months of the erroneous refund was not resorted to by the Revenue. 10.5.3 Revenue s other plea is that Section 11A is not the only remedy available to it under the Act. The other remedy is to resort to provisional approval of C/Ls on the issue being sub-judice in higher fora. Therefore, C/Ls dated 1-3-1988 and 5-4-1988, which were directly the subject matter of C.R. 1025/89 before Guwahati High Court and ultimately the subject matter of appeal before the Ape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ths should be reckoned from that date. We are unable to accept that plea. Reliance has been placed by ld. Advocate, inter alia, on Supreme Court s ruling in 1989 (43) E.L.T. 790 (S.S. Rathore v. State of M.P.). That judgment has examined the limitation under Article 58 of First Schedule to the Limitation Act which provided as follows :- 58 To obtain any other declaration Three years When the right to sue first accrues It has been decided in the above case that three years will start reckoning from the date of the appellate/revisionary order and not from the date of adverse order of the original authority on the ground that before filing of a suit in a civil court, a person avails of the remedy of appellate/revision proceedings, before filing the suit, if necessary. Cause of action accrues to such person on the adverse order of the part of the departmental authorities on the basis of doctrine of merger. This judgment in our view has no application. Limitation of six month u/s 11 A is not from the date when the refund was first found to be erroneous (i.e. the date of pronouncement by Apex Court in Woodcraft) but it is from the date of refund. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secured by bank guarantee in terms of Apex Court s interim directions on appellants appeal against the aforesaid order dated 22-3-1993 of Guwahati High Court. 11.3 Ld. Advocate Dr. Chakraborty attempts to bifurcate the aforesaid period 25-7-1989 to 17-3-1993 into three periods and contending that the assessments were not provisional on the ground that no bond was taken by the appellant and therefore, the show-cause notice having been issued beyond the period of six months on 2-8-1995 is not correct. We have already held that execution of bond under Rule 9B is not always necessary. Non-execution of a bond does not detract from the provisional approval u/r 173B. Reliance placed by the ld. Advocate on Universal Paper Mills is not correct because in that case, as rightly pointed out by the ld. Counsel Shri Dutta, there was no court direction to levy and collect at a lower rate, nor was there any direction of the proper officer to approve the C/L provisionally, as is available in the present case. We have also held in para 10.5.3 that there is undoubtedly sufficient strength in the submissions of Shri Dutta that resort to provisional approval of C/Ls was an alternative remedy in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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