TMI Blog1983 (10) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... ieties of fabrics, which they called Sort Nos. 4004 and 1819. These were cleared under Item 22 of the Central Excise Tariff as Art Silk Fabrics . Subsequently, it was observed by the Central Excise authorities that these varieties contained more than 40% of cotton and more than 30% of non-cellulosic fibre at the grey stage and in that stage were considered to be classifiable under Item 19-I(1A) of the Central Excise Tariff as in force at the material time, as cotton fabrics. However, these fabrics were subjected to a Carbonise process of printing , and as a result the percentage of cotton fell below 40% and the percentage of non-cellulosic fibre became 60%, bringing them within the definition of Art Silk Fabrics classifiable under Item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be levied at both the grey cotton fabric stage under Item 19-I(1A) and under Item 22 as Rayon or Artificial Silk Fabrics after processing. The Government of India therefore proposed to set aside the Appellate Collector s order and to restore the Assistant Collector s order, or to pass such order as they might deem fit after consideration of the submissions of the appellant. It is this show-cause notice which is now to be disposed of by us as if it were in appeal filed by the Collector. 6. The matter came up for hearing on 4-10-1983, when Shri K.D. Tayal represented the appellant Collector and Shri V.J. Trivedi, the respondents. As a preliminary observation we pointed out to Shri Tayal the original show cause notice, dated 18/19-3-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be no bar to the revising authority holding a further enquiry. 8. Shri Tayal also cited the judgment of the Delhi High Court in the case of Associated Cement Companies Ltd. v. Union of India. In that case the Superintendent of Central Excise had demanded duty on `pozzolana cement at ₹ 91/- per tonne. In appeal, the Appellate Collector ordered that duty should be levied only at ₹ 82/- per tonne. The Government of India issued notices on the assessees to show cause why the orders of the Appellate Collector should not be set aside and the demands made by the Superintendent restored. The show cause notices were challenged by the assessees on the ground that they were time-barred by virtue of the third proviso to Section 36(2). T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued that under Section 36(2) as it stood at the material time, there was no requirement that no order levying or enhancing the duty could be made unless the person affected had been given notice within the time-limit specified in Rule 10, and therefore the Revisional Authority was empowered to pass an order holding duty to be leviable under Item 19-I(1A) as well as Item 22. He also pointed out that in some appeals relating to tariff classification, the Tribunal had held as applicable a classification different from what had been decided by the authorities below. 12. Shri Trivedi, with reference to this issue, submitted that the show-cause notice under Section 36(2) proposed (1) setting aside the Appellate Collector s order, (2) restor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e position at the time the proceedings under Section 36(2) were initiated, at the time an order came to be made under that section the requirements of the third proviso also had to be fulfilled; (d) It does not appear proper for the Revisional Authority acting under Section 36(2) to exercise its powers under that section in such a way as to circumvent the time-limit contained in Rule 10; (e) This is not a case of having to indicate what the correct classification is, but of having to decide whether the order passed by the appellate authority called for modification on the ground that it was not correct, legal or proper. There was no obligation on Government to initiate proceedings under Section 36(2). And the nature of the proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocessed fabric ceased to be cotton fabric and is transformed into rayon or artificial silk fabric it could never attract duty under the head of processed cotton fabric; (c) There is neither principle nor logic involved in any such extreme contention (viz., that duty could be levied both at the intermediate stage and at the final stage) and even the excise authorities had never taken up any such absurd stand; (d) The authorities were obviously in error in not looking at the actual finally manufactured substance which was transformed into a new substance. 16. Shri Trivedi submitted that the above decision of the Gujarat High Court squarely applied to this case. In further support of his stand he referred to the Tribunal s own decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
