TMI Blog1997 (3) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... e modification of the classification lists with effect from the date the appellant company manufactured such yarn i.e. from July 1983 onwards, which is contrary to the earlier decision of the High Court in M.P. No. 104/84 which has been affirmed by this Court in Union of India v. Madhumilan Syntex (1988 (5) TMI 38 - SUPREME COURT OF INDIA). The appeal is, therefore, allowed, the impugned judgment of the High Court is set aside and the order dated May 27, 1985 passed by the Collector (Appeals) dismissing the appeal is set aside and it is held that the order dated March 5, 1984 passed by the Assistant Collector, Central Excise modifying the classification lists stands quashed - 1410 of 1987 - - - Dated:- 4-3-1997 - S.C. Agrawal and S.C. Sen, JJ. [Judgment per : S.C. Agrawal, J.]. - Madhumilan Syntex (P) Ltd., appellant No. 1 (hereinafter referred to as `the appellant company') owns a factory wherein they manufacture spun yarn. At the relevant time in Tariff Item No. 18-III of the First Schedule to the Central Excises Salt Act, 1944 (hereinafter referred to as `the Act') it was prescribed that cellulosic spun yearn, in which man-made fibre of cellulosic origin predomina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore him all the products mentioned in the Annexure-I to the said order have been reclassified as falling under Tariff Item No. 18-III(ii) and that the said modified approval would be effective right from the date of production of these goods, i.e., from July, 1983 onwards. In the said order it was further stated that in the interest of natural justice the modified approval in respect of tariff classification and rates of duties payable was provisional and the appellant company were being accorded an opportunity to submit to him their representation, if any, against the modified approval within a week's time and that if nothing was heard from them the provisional approval would be finalised. By another order dated, February 9-10-1984, the Superintendent, Central Excise, Range III, Ujjain, issued a show cause notice wherein reference was made to the order dated February 9, 1984 passed by the Assistant Collector whereby the approval of the classification lists had been modified and the appellant company were required to show cause to the Assistant Collector as to why short levies of Rs. 26,47,749.39p. should not be recovered from them under Section 11A of the Act. After receipt of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany had already filed an appeal before the Collector (Appeals) and observed that it would be open to the Collector (Appeals), after considering the facts and circumstances of the case, to give adequate opportunity of hearing to the appellant company including an opportunity of adducing evidence and decide the appeal on merits. 3.The Union of India filed an appeal [C.A. No. 1110(NT) of 1986] in this Court against the said decision of the Division Bench of the High Court. The said appeal of the Union of India was dismissed by this Court by its judgment in Union of India Ors. v. Madhumilan Syntex Pvt. Ltd. Anr. reported in 1988 (35) E.L.T. 349 (S.C.) = 1988 (3) SCR 838. 4.During the pendency of the said appeal before this Court the Collector (Appeals), considered the appeal of the appellant company and disposed of the said appeal by order dated, May 27, 1985. The Collector (Appeals), held that in view of the fact that the order passed by the Assistant Collector relating to the demand of the duty for the period August 15, 1983 to February 6, 1984 had been quashed by the High Court the only appeal which was required to be decided on merits was against the order dated March 5, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ior counsel appearing for the appellant company, has urged that in the impugned judgment the High Court was in error in construing its earlier judgment dated November 24, 1984 in M.P. No. 104/84. The submission of Shri Salve is that by the said judgment the High Court had held that the order dated March 5, 1984 passed by the Assistant Collector modifying the classification lists was bad in law and that this Court, while dealing with the appeal of the respondents against the said judgment, has also construed the said judgment of the High Court to mean that the order modifying the classification lists that was served on the appellant company was bad in law and the said order had been quashed. 6.We find considerable force in the said submission of Shri Salve. Gyani J., in his explanatory note, has clearly said : "The orders Annexures R-10 and R-11 are quashed...... The classification lists, filed by the petitioners and the approvals granted therein shall remain intact so long as a proper opportunity of showing cause is not afforded to the petitioners and the same is not cancelled in accordance with law." 7.By order (Annexure R-11) dated March 5, 1984 the Assistant Collector had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ingredients of which are not in conformity as prescribed in Item 18-III(i) as mentioned in Rule 173B(4) of the Rules." 9.These observations clearly indicate that the High Court found that there was no material on the basis of which the order dated March 5, 1984 modifying the classification lists could be passed by the Assistant Collector of Central Excise and according to the High Court excess duty under Tariff Item No. 18-III(ii) could be demanded prospectively from February 7, 1984, if after giving proper and adequate chance of hearing to the petitioners it was found that at least some of the product of yarn manufactured by the appellant company was covered by Item 18-III(ii). 10.In Union of India v. Madhumilan Syntex (supra) this Court, while referring to the said judgment of the High Court, has said : "Mulye J. held by his judgment that the Writ Petition was allowed to the extent that the demand for recovery of Rs. 26,47,749.39p for the period August 15, 1983 to February 6, 1984, which was the period referred to in the demand notice was quashed. However, the learned Judge directed the Collector, Central Excise before whom the appeal filed by the petitioners was pendin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect as far as the said earlier period was concerned." [pp. 845 - 846] 12.This would show that this Court has construed the judgment of the High Court dated November 24, 1984 in M.P. No. 104/84, to mean that both the Judges have held that the order of the Assistant Collector of Central Excise dated March 5, 1984 modifying the classification lists was bad in law and had ordered that the same be quashed. In these circumstances, we are of the opinion that the High Court was in error in proceeding on the basis that the said order dated March 5, 1984 had not been quashed by the High Court and that the Collector did not commit any error in dismissing the appeal filed by the appellant company against those orders. In our opinion, the Collector (Appeals) should have proceeded on the basis that the order dated March 5, 1984 passed by the Assistant Collector modifying the classification lists had been quashed by the High Court. By dismissing the appeal filed by the appellant company against the order of the Assistant Collector, Central Excise dated March 5, 1984 modifying the classification lists the Collector (Appeals) has affirmed the modification of the classification lists with effect ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
