TMI Blog1991 (1) TMI 163X X X X Extracts X X X X X X X X Extracts X X X X ..... ingredients : (1) Milk Fat Minimum 5% and above (2) Milk protein Minimum 27% and above (3) Carbohydrate 61% (4) Minerals 5% (5) Vitamin A 350 Ug per 100 grams (6) Vitamin D 180 I.U. per 100 gms. (7) Moisture 2% The petitioners had filed a classification list on 4-9-1989 classifying the New Product under sub-heading 0401.19 of heading 04.01 of Chapter 4 of the Central Excise Tariff Act, 1985 (hereinafter to be referred as the '1985 Act'). The respondent No. 3, namely, the Superintendent, Central Excise, Kota asked for certain informations vide letter dated 6-9-89. The petitioners furnished the requisite informations vide its letter dated 8-9-89. Respondent No. 3 directed the petitioners to pay central excise duty on the New Product at the same rate at which it was paying duty on Sapan Dairy Special. Respondent No. 3 also communicated to the petitioners that the classification list was being submitted to the respondent No. 2 for necessary action. The petitioner No. 1 reiterated its stand for classification under sub-heading 0401.19 and alternatively ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... '). According to the respondents, the New Product of the petitioner No. 1 could only be classified under sub-heading 0401.13 because partially skimmed milk powder falls under the said sub-heading. It cannot be classified under residuary entry. There was a mistake in the classification of the product under sub-heading 0401.19. In fact, the petitioner No. 1 had not furnished the full particulars regarding the contents of the previous product and the new product and therefore, the Department was justified in issuing show cause notice to the petitioner. 4.Shri S.S. Ray, Senior Advocate, who has argued the case on behalf of the petitioners, made five-fold submissions in support of the writ petition. In the first instance, he has argued that there is no provision for review or revision of the classification list once it has been finally approved by the competent authority. According to Shri Ray, the provisions of 1944 Act or the Rules do not confer any power on the proper officer to undertake a review of the classification list once it has been finalized after due inquiry. The second submission of Shri Ray is that the term 'proper officer' used in Rule 173B(5) must be read as an Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the provisions of 1985 Act and the various guidelines laid down therein clearly show that the New Product of the petitioner No. 1 is liable to be classified under sub-heading 0401.13 and the respondent No. 2 had acted in conformity with law while issuing the impugned notices. According to the counsel for the respondents, the writ petition is wholly pre-mature. The petitioners have not chosen to file reply before the Competent Authority. The order can be passed by the competent officer after hearing the petitioners and if they feel aggrieved by the order of the competent officer, they have a right of filing appeal etc. They submit that bye-passing of the statutory remedies should not be permitted by the Court. Learned counsel for the respondents further argued that the entries contained in Chapter 4 of 1944 Act are clear and therefore, no help can possibly be taken from the provisions of the Prevention of Food Adulteration Act and the Rules framed thereunder or the specification laid down by the Indian Standard Institute. 6.For deciding the first question, we may refer to the scheme of the provisions contained in Section 11A of 1944 Act and Rule 173B of the Rules. Section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any implicit restriction on the exercise of power which has been conferred on the competent authority by virtue of Section 11A. 7.Rule 173B provides that the assessee shall file a list of goods for approval of the proper officer. Once the assessee files a list under sub-rule (1) of Rule 173B, the proper officer has to approve the list after such inquiry as he deems fit. Such approval may be made with modifications as are considered necessary by the proper officer. The assessee has to determine the duty payable on goods intended to be removed by him in accordance with such list approved by the proper officer. According to sub-rule 2(A), if delay is likely to be occasioned in the process of approval of the list, the procedure prescribed under Rule 9(B) for provisional assessment of goods can be followed. Sub-rule 3 provides that where assessee disputes the rate of duty approved by the proper officer, he may pay duty under protest at the rate approved by such officer after giving intimation to that effect to such proper officer. Sub-rule (4) of Rule 173B envisages an alteration in the list in certain contingencies. This provision is open to be used either by the Department or by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uard which must be read inherent in the exercise of power under this rule is that in case modification of list is likely to affect a person adversely, he/it must be given a proper notice by the proper officer before effecting such modification or change. The proper officer would be exercising quasi judicial function in such eventuality and, therefore, he shall have to act in conformity with the principles of natural justice. The requirement of compliance with the principles of natural justice will have to be read as implicit in the exercise of power of modification by the proper officer. Of course, what particular procedure is to be adopted by the proper officer in a given case after issuing notice will certainly depend on the facts of each case and is likely to differ from case to case. Thus our conclusion on this aspect of the matter is that proper officer has power to effect modification in the classification list, after it has been finalised and there is nothing in law which estops the proper officer from exercising this power. Of course, if the modification is likely to affect a person, he/it is entitled to a prior notice and opportunity of making representation. Therefore the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hange in the classification list is permissible under Rule 173B(5) after notice to the affected party. 15.The decision of the Supreme Court in Kuntesh v. Management, H.K. Mahavidyalaya, Sitarpur - 1987 (32) E.L.T. 8 (S.C.) = AIR 1987 SC 2186 relied upon by Shri Ray in support of his plea that the proper officer has no right to review a classification list once it has been finalised or approved, contains a well established principle that a quasi judicial authority cannot review its own unless power of review is expressly conferred on it by the statute, under which it derives its jurisdiction. This proposition of law is undoubtedly well settled but it has no application in the scheme of Section 11A and Rule 173B in which the proper officer has been conferred with a power to modify the list after it has been finalised. The other case referred to by Shri Ray is that of Ajanta Iron Steel Co. (P) Ltd. v. Union of India others - 1986 (23) E.L.T. 318. In that case, the Division Bench of Delhi High Court took the view that the classification list once approved cannot be disapproved by another Assistant Collector, and that also after a long period. In that case, the classification list ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the department can take a different view and have the matter agitated right up to the Supreme Court, if necessary. But when there is no change at all and when the position is exactly the same, legally and factually, as it was on the earlier occasion then we think that the department should be restrained from capriciously changing its stand and inflicting unnecessary proceedings and hardship upon the assessee. The Court further observed that the rule of natural justice does not allow the same authority or the one subordinate to him to review his earlier view arbitrarily. After the earlier decision taken by the assessing authority is wrong, it is open to the higher authority to review the same under the Act and to state the correct position, but if this has not been done, or if the revisional authority has taken a view in favour of the assessee for the earlier period, fresh proceedings cannot be launched against the assessee merely because the department later thinks that the previous decision was untenable or fresh decision be obtained. In such cases, the department would have remedy of enunciating its views in other cases where its hands are not so tied and eventually if the Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of any such decision or order and may, by order direct such authority to apply to the Collector (Appeals) for determination of such points arising out of the decision or order as may be specified by the Collector of Central Excise in his order. The power exercisable under Section 35E(2) by the Collector, Central Excise is quite distinct and independent than the power of modification, which vests with the proper officer under Rule 173B(5) of the Rules. If the argument of exclusion of the power of modification of the classification list under Rule 173B(5) is accepted because of the revisional power of the Collector, Central Excise under Section 35B, the provisions of Rule 173B(5) will be rendered redundant and this, in our view, is not permissible or warranted. As already noticed by us, the rates are dependent on the approval of classification list and if it were to be held that power of modification of classification is not available under Rule 173B(5), obviously, the power of modification of rates after they have been finalised would be considerably nullified. Thus the argument of the learned counsel for the petitioner regarding applicability of Section 35E for exclusion of Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice. Once the court holds that the notice is not without jurisdiction, the proper authorities under the Act of 1944 should be left the controversy on merits. If the petitioners feel aggrieved against such decision of the proper authority, they have a statutory remedy of appeal available under the Act of 1944 and the Rules framed thereunder. According to the learned counsel for the respondents, when the effective alternative remedy is available to the petitioners, this court must not invoke extra-ordinary jurisdiction. 22.After careful consideration of the rival submissions of the parties we think that it will not be proper to express opinion on the merits of the classification to the New Product of the petitioners under a particular heading or subheading in Chapter 4 of the Schedule appended to 1985 Act. Expression of opinion on this aspect would prejudicially affect the case of either of the parties. In our considered opinion, an equally effective and efficacious remedy is available to the petitioners under 1944 Act. This court will not ordinarily interfere in such matters unless an aggrieved party has exhausted alternative remedies available under the statute. Most of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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