TMI Blog1984 (2) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... returned by the wholesalers, they are used again for the purposes of secondary packing of the consignments of squashes and syrups. 2. The Assistant Collector of Central Excise by a letter dated 11th April, 1978 informed the company that he could not consider the corrugated boxes as durable and he was, therefore, inclined to include the cost of such packages in the value of the product. The company then filed appeal against this decision. The Appellate Collector of Central Excise by his order dated 30th August, 1979 hold that the product manufactured by the company is first packed in bottles, which alone can be considered as unit packing under Section 4(4)(d)(i) of the Central Excises and Salt Act (hereinafter referred to as the "Excise Act") and that the secondary packing of the corrugated board boxes would not be covered under the definition of packing material under Section 4(4)(d)(i) of the Excise Act. Therefore, according to the Appellate Collector, the question of including the cost of such packing material in the assessable value did not arise. 3. Almost about a year after this order, a show cause notice under Section 36(2) of the Excise Act was issued by the Joint Secret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisable goods in question and that the material fact of the goods being marketed in packed condition will not be altered by the credit note given for return of corrugated boxes in some cases. This view of the Government of India is challenged in this petition by the Petitioner-company. 5. At the threshold it is contended by Mr. Shroff appearing on behalf of the company that the proceedings for suo motu revision of the order of the Collector of Customs are hit by the provision with regard to limitation in the third proviso to Section 36(2) of the Excise Act. According to the learned Counsel, in a case of short-levy or non-levy of the duty of excise, the notice to show cause could be issued only within a period of six months from the date of the order of the Collector of Customs. 6. Mr. Sethna and Mr. Deodhar appearing on behalf of the Department have contended that the instant case is governed by the second proviso to Section 36(2) which prescribes a limitation of one year for commencing the proceedings in the exercise of revisional jurisdiction and since the notice to show cause issued on 16th September, 1980 is within one year of 30th August, 1979, which is the date of the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section shall be varied so as to prejudicially affect any person unless such person is given a reasonable opportunity of making a representation and, if he so desires, of being heard in his defence. (b) Where the Board or, as the case may be, the Collector of Central Excise is of opinion that any duty of excise has not been levied or has been short-levied or erroneously refunded, no order levying or enhancing the duty, or no order requiring payment of the duty so refunded, shall be made under this section unless the person affected by the proposed order is given notice to show cause against it within the time-limit specified in Section 11A. (4) No proceedings shall be commenced under this section in respect of any decision or order [whether such decision or order has been passed before or after the commencement of the customs, Central Excises and Salt and Central Boards of Revenue (Amendment) Act, 1978] after the expiration of a period of one year from the date of such decision or order." Clause (b) of sub-section (3) and sub-section (4) of Section 35A by their plain terms provide for a restriction on the exercise of the revisional power in certain cases. The three kinds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been levied or has been short-levied or erroneously refunded, no order levying or enhancing the duty, or no order requiring payment of the duty so refunded, shall be made under this section unless the person affected by the proposed order is given notice to show cause against it within the time-limit specified in Section 11A." 10. As already pointed out, the second proviso to Section 36(2) is similar to Section 35A(4) and the third proviso to Section 36(2) is analogous to clause (b) of Section 35A(3). 11. How, the contention of Mr. Shroff is that in the present case what is sought to be done is that duty is being enhanced on the ground that there is a short-levy or there is a non-levy and, therefore, this case is governed by the third proviso to Section 36(2). According to the learned Counsel, admittedly the notice to show cause is not within the period of six months from the date of the order and, therefore, the entire proceedings are vitiated. 12. According to Mr. Sethna and Mr. Deodhar, the third proviso is not attracted to a case where the order sought to be revised is one made under Section 35 by the Collector of Customs and the third proviso to Section 36(2) provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f these three categories of cases unless a notice to show cause was given within the time-limit prescribed in Section 11A, that is, within the period of six months from the date of the order sought to be revised, it is obvious that the rule of limitation was sought to be laid down by the legislature, which would be applicable only to a limited class of cases referred to in clause (b) of Section 35A(3). By making a similar provision in the third proviso to Section 36(2) it is obvious that the legislature wanted even Central Government's revisional jurisdiction to be controlled by the provision with regard to limitation in respect of the matters relating to non-levy, short-levy or erroneous refunds arising out of orders which are made under Section 35A or 35A of the Excise Act. If we accept the contention advanced before us on behalf of the Department, the effect would be that there would be two parallel jurisdictions of a revisional nature in respect of the same orders and possibly the only orders which could be subject to such revisional jurisdiction would be the orders of the Assistant Collector which would suffer from the defect of non-levy, short-levy or erroneous refund. In cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Central Government says is that merely because in some cases the empty cartons have been returned, it would not lead to the inference that the cardboard boxes would constitute durable and returnable packing. We fail to appreciate this view. Once it is found that a packing has been returned and is capable of being reused, the term of suitability has in terms been satisfied. On facts the returnability of a carton is the term of the sale and, therefore, having regard to the very definition of `value' in Section 4(4)(d), the cost of the price of the corrugated carton was liable to be excluded. It, therefore, appears to us that the Appellate Collector of Central Excise had taken the correct view of the matter and there was no infirmity in the view taken by him, with the result that even on merits, the order of the Central Government cannot be sustained. 16. Looking at it from any point of view, therefore, this petition will have to be allowed and petitioner No. 1 company will be entitled to an order quashing the order of the Government of India dated 10th September, 1981 (Exhibit K) as well as quashing the notice of demand dated 14th December, 1981 (Exhibit L). The petitioners are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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