TMI Blog1983 (2) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... and 31.8% at the processed stage. The appellants sought classification of the fabric under Item No. 19-I(2) of the Central Excise Tariff Schedule (C.E.T.) which was allowed by the Assistant Collector of Central Excise, Bombay. Simultaneously, samples were drawn by the Excise authorities for chemical test to ascertain the composition of the fabric. A Show Cause Notice-cum-Demand dated 8-8-1975 was issued by the Range Superintendent for a sum of ₹ 10, 507.16 representing the difference in duty between that leviable under C.E.T. Item No. 19-I(la) and that paid under Item No. 19-I(2). The notice covered the clearances effected during the period from 14-5-1975 to 9-6-1975. On receipt of the test report from the Deputy Chief Chemist to the effect that the terene (a non-cellulosic fibre) content of the processed fabrics amounted to 32.1%, the Superintendent issued a second Show Cause Notice-cum-Demand dated 18-12-1976 for the period from 3-1-1976 to 3-2-1976. The appellants submitted in reply to the two notices that samples should have been drawn at the grey fabric stage only to ascertain the terene percentage. They also submitted that the stage for determination of duty was the gre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... percentage of each of the different types of fibres used in the cloth. (c) The fabric was produced as soon as it came out of the loom. The Central Excise Department itself required that the production of fabric should be recorded in the RG 1 register at the grey stage. (d) Only the Central Board of Excise Customs action under Section 35-A of the Central Excises Salt Act could have reviewed the decision taken by the Assistant Collector in approving the classification list, the price lists and RT 12 returns. The Assistant Collector could not have reviewed his own orders. 4. Dr P.V. Jois, Secretary (Law), Mill Owners Association Bombay, appearing on behalf to the appellants stated that the grey fabric was subjected to the processes of scouring, bleaching, dyeing and printing. The Brosso process of printing adopted by the appellants resulted in the liberation of acidic matter which burnt out part of the cotton fibre present in the fabric and that this explained the fact that the fabric, after processing, had a terene content over 30%. The manufacture of the fabric was complete when the fabric as woven came off the loom, i.e. at the grey stage. The terene content at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase came to be considered by the Board and they had clarified that where grey fabrics falling under Item No. 19-1(2) CET were processed in the same factory and the processed fabrics fell under Item No. 19-I(A)-CET, it was the latter item that was relevant for assessment. He further submitted that the value for the purpose of levy of duty also had to be determined with reference to the stage of removal or clearance of the fabric from the factory. Applying this criterion, the processed fabric correctly fell for classification under Item No. 19-I(1 A) CET. With regard to the appellants submission on the applicability of Rules 10, and 10A Shri Tayal drew the attention of the Bench to the judgment of the Delhi High Court in the case of Bawa Potteries v. Union of India (1981 E.L.T. 114 (Delhi) and submitted that Rule 10 permitted a review of the order of assessment. 6. Replying to Shri Tayal s submissions, Dr. Jois submitted that a quasi-judicial decision could not be reviewed by a Show Cause Notice. He referred in this context to the judgment of the Gujarat High Court in the case of Bhor Industries Ltd., v. Union of India 1980 E.L.T. 752 (Guj.). He also submitted that with the retr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, or both, of non-cellulosic origin. (2) Others :- (a) Cotton fabrics, superfine-that is to say fabrics in which the average count of yarn is 61s or more. (b) Cotton fabrics, fine-that is to say fabrics in which the average count of yarn is 41s or more but is less than 61s. (c) Cotton fabrics, Medium-A - that is to say, fabrics in which the average count of yarn is 26s or more but is less than 41s. (d) Cotton fabrics, Medium-B - that is to say, fabrics in which the average count of yarn is 17s or more but is less than 26s. (e) Cotton fabrics Coarse-that is to say, fabrics in which the average count of yarn in less than 17s. (f) Cotton fabrics not otherwise specified. 10. From the percentage composition data noted in para 3, it is clear that though the grey fabric did not fall under Item 19-I(1A) because of its non-cellulosic fibre content being less than 30% the processed fabric correctly fell within the purview of Item 19-I(1 A) since the non-cellulosic fibre content in it exceeded 30% as a result of part of the cotton content having been lost as a result of the processing. The appellants, however, strenuously contend that it is the grey stage composition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble under Item 19 of the CET. Both these questions have to be answered in the affirmative. The contention of the Counsel for the appellants that Act No. 6 of 1980 only regularised the levy of processing stage duties and that the basic classification even in the case of processed fabrics had to be determined with reference to the grey fabric is also not acceptable for the reason that the said Act had the effect of making processed fabrics as a distinct entry in the excise tariff under the relevant items in addition to unprocessed fabric. The appellants contention that reclassification of the processed fabric under Item 19-I(IA) would make them fall foul of the Textile Commissioner s stamping regulations lacks substance since the stamping regulations which may have their own rationale cannot be the determinant criteria for classification of the goods for levy of excise duty under the Central Excises Salt Act. We, therefore, hold that though the grey fabrics in the instant case may have fallen for classification under item 19-I(2), after the fabrics were subjected to processing which resulted in change in the relative percentages of the constituent fibres or yarn, the non-cellulosi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , were issued to the appellants seeking to re-classify the goods and asking them to pay certain amounts of duty. The Assistant Collector, after holding adjudication proceedings, made his order dated the 1st March, 1977. He was fully within his jurisdiction and powers in doing so. The question of the Board alone being competent to review the order of assessment does not arise in this case. There were two Show Cause Notices-cum-Demand, one dated 8-8-1975 covering the period 14-5-1975 to 9-6-1975 and the second dated 18-12-1976 covering the period 3-1-1976 to 3-2-1976. Both notices were made within the time limit of 12 months in terms of Rule 10 read with Rule 173-J. The submission of the appellants on the applicability or otherwise of Rule 10 and Rule 10A are not relevant to the facts of the case. 13. The appellants contentions with regard to the effect of the retrospective amendment of Rules 9 and 49 are also devoid of substance. The effect of the said amendment read with amendments effected by Act No. 6 of 1980; is that grey fabrics and processed fabrics are made separately liable to duties as applicable to such fabrics subject, of course, to any set-off of duty permissible un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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