TMI Blog1982 (7) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... First Schedule to the Central Excises and Salt Act, 1944. It may also be mentioned that the company manufactures fibre/tops from waste. For the manufacture of fibre/tops using waste they add M.E.G. (Glycol) as an assisting agent. In paragraph 3 of the reply affidavit filed on behalf of the petitioner it is stated as follows : The process of making normal fibre starts with mixing of a known quantity of DMT and MEG is a reactor where it is heated with separated heat exchangers and made into molten mass. This mass is added into an easter-interchange reactor where methanol separates out and sent for recovery. The D.M.T. and MEG forms into a monomer and to his monomer, titenium dioxide is added as a delusterant to make the monomer suitable for making polyester fibre. "During the processes admittedly the manufacturers get what is called solid undrawn waste and fibrous drawn waste. Hence the process of making fibre out of waste starts with manual sorting out of different type of wastes, washing and cleaning them manually and drying. The dried lumps and other wastes are crushed into small bits. Filament wastes are cut and pellatized. These are fed into the main plant reactor. Therein MEG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tops and fibres should be manufactured from duty paid waste arising in the factory as well as duty paid waste from outside and that proper accounts are maintained for the same separately. The communication dated 29-3-1978 stated that the classification list No. 7/78, dated 6-3-1978 filed for approval for the manufacture of tops and staple fibre from out of duty paid waste generated from the factory of production as well as duty paid waste received from other sources is approved subject to the observance of the conditions detailed in sub-clauses (a) to (f). On 4th October, 1978 the petitioners filed the second classification list claiming exemption. This was necessitated due to certain g general changes in the levy. This classification list was approved on 4-10-1978. Thereafter, on 23rd March, 1979 the petitioners filed the third classification list which was also approved on 4-4-1979. During the period March to September, 1978 and October, 1978 to April, 1979, the petitioners filed the necessary R.T. forms and they were duly endorsed by the respondents. For the period commencing from May, 1979 onwards the petitioners filed the necessary RT forms, but they were not formally endorsed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners claiming exemption in respect of fibre/tops manufactured out of duty paid waste would be treated as provisional under Rule 9B of the rules made under the Act. Similarly, the third communication called upon the petitioners to give a bond in a sum of Rs. 60,00,000/. These communications cannot be interpreted in any manner as not to be affecting the rights of the petitioners. I have therefore no hesitation in holding that the three impugned communications really amount to orders passed by the respondents affecting the rights of the petitioners consequently the writ petition is maintainable to quash the same communications. 6. Mr. V.P. Raman, the learned counsel for the petitioners raised two contentions. First, the impugned communications dated 16-11-1979 and 26-11-1979 treating the approval granted to the classification list filed by the petitioners as early as on 13-3-1978, 4-10-1978 and 4-4-1979 cannot be treated subsequently as one made provisionally under Rule 9B of the rules. The Central Excises and Salt Act does not contain any provision enabling the authorities to review an earlier order passed. If at all, they can take action for a short levy. lt could onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of manufacture carried on by the petitioners to decide whether they should take any action under Section 11A of the Act and therefore the petitioners could not claim any relief in the Writ Petition. The learned counsel further referred to the fact that by the process of manufacture what the petitioners were doing was recycling the waste. As a result of such recycling the petitioners get back DMT and MEG which were originally raw materials used in the manufacture of fibre/tops and therefore it could not be said that the petitioners are manufacturing fibre/tops only from waste. 8. On a consideration of the facts and circumstances of the case and the arguments placed before me by the learned counsel on either side, I am of the view that the contentions of Mr. Raman are well founded and have to be accepted. 9. It is not disputed that the process of manufacture of fibre/tops with which we are now concerned is from duty paid waste. There is controversy between the petitioners and the respondents whether the petitioners are using DMT and MEG (Glycol) and if so to what extent and whether such user would disentitle the petitioners from claiming the exemption under Notification No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise states that tariff classification and rate of duty leviable in respect of all goods of Item No. 4 above was approved until further orders. Paragraphs 2 and 3 of the memorandum which deals with provisional approval and assessment of goods under Rule 9B have been struck off. The communication dated 29-3-1978 stated that the classification list No. 7/78 was approved subject to the observance by the petitioners of certain conditions mentioned therein under clauses (a) to (f). It was not contended before me that the petitioners did not comply with any of the conditions. Similarly, the petitioners filed classification list on 7-10-1978 which was approved with effect from 4-10-1978 wherein also paragraphs 2 and 3 in the memorandum of approval by proper officer with regard to provisional assessment have been struck off. The same is the case with the classification list approved on 4-4-1979. From the above it is clear that the respondents did not have any doubt that the petitioners were fully qualified for being granted whole exemption in terms of Notification No. 37 of 1978. The approval of the three classification lists also makes it clear that the authorities were not maki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch value (which may not necessarily be the rate or price declared by the assessee) as may be indicated by him, if such assessee executes a bond in the proper form with such surety or sufficient security in such amount, or under such conditions as the proper officer deems fit, binding himself for payment of the difference between the amount of duty as provisionally assessed and as finally assessed." Rule 9B(3) is not relevant. Rule 9B(4) states : "The goods provisionally assessed under sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are not so assessed" Rule 9B (5) states : "When the duly leviable on the goods is assessed finally in accordance with the provisions of these rules, the duty provisionally assessed shall be adjusted against the duty finally assessed and if the duty provisionally assessed falls short of, or is in excess of, the duty finally assessed, the assessee shall pay the deficiency or be entitled to refund, as the case may be." Therefore, Rule 9B confers power on the proper officer to make a provisional assessment in certain circumstances. Rule 8 confers power to authorise exemption from duty in special c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. In other words, by these two communications, the respondents made it clear that they were treating the approval granted to the classification list in the first instances as provisional in terms of Rule 9B. In other words, as Mr. Raman pertinently argued the authorities were in effect reviewing an earlier order. The question is whether the respondents have a right to review their earlier order. 11. It is now settled law that there is no inherent power of review in an authority while acting judicially or quasi judicially. The power of review must be conferred expressly or by necessary implication by the provisions of the statute. The power of the authorities under the Central Excises and Salt Act to review their earlier order has been considered by me in Madras Rubber Factory Ltd. v. Asst. Collector of Central Excise, Madras and Another (1981 E.L.T. 565) wherein it has been held that the power of review must be conferred expressly or by necessary implication by the provisions of a statute and that the Central Excises and Salt Act and the rules made thereunder do not confer upon the authorities any power of review of their own order. It must therefore follow that the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... salvage in Encyclopaedia Britannica, Vol. 11, page 623. Whatever may be the meaning that one may attach to the word recycling, in my opinion, recycling is only a process of manufacture. The end product that is obtained by recycling of duty paid waste is fibre/tops. Therefore, we cannot lose sight of the fact that fibre/tops are manufactured from duty paid waste. The learned standing counsel was not able to convince me that in the process of manufacture the original raw materials DMT and MEG were obtained and they went to help the manufacture of fibre/tops and therefore it could not be said that the petitioners were manufacturing fibre/tops from out of duty paid waste. The petitioners themselves have admitted that they use in the process of manufacture MEG (Glycol) as an assisting agent. It is also asserted that the MEG used in the manufacture as an assisting agent are fully recovered back subject to a minimal loss due to handling. This is not controverted. The Notification No. 37/78 merely refers to fibre/tops manufactured out of duty paid waste. It does not say that no other material should be used along with duty paid waste. As rightly pointed out by Mr. V.P. Raman, the notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notification. If the tax-payer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom, the matter is different but that is not the case here." 13. A similar question arose in Innamuri Gopalan v. State of Andhra Pradesh (1964 2 S.C.R. 888). The appellants before the Supreme Court who were dealers under the Andhra Pradesh General Sales Act, 1957 claimed exemption from sales tax under certain notification in respect of the sales of textiles in their stock. The State contended that since the object of the notification was to avoid double taxation the exemption could be claimed only in cases where the additional excise duty was leviable on the goods and had been paid and that as textiles were a class of goods on which additional excise duty was leviable and the exemption could be claimed only if such duty was levied and paid. Rajagopala Ayyangar, J. speaking for the court and dealing with this contention observed thus : "We do not feel persuaded to accept this argumen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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