JUDGMENT - BATTA R.K., J.:---The petitioners, who are manufactures of barges, had manufactured a barge for transport of ores for V.M. Salgaonkar Brothers, Pvt. Ltd., in their shipyard, at Kelossim, Goa. While the said barge was under manufacture, the petitioners by letter dated 3-5-1986 requested the Superintendent of Excise, Vasco-da-Gama to confirm whether the said barge for transport of ores would be exempted from payment of Central Excise duty by virtue of Notification No. 76/86-CE dated 10-2-1986. The Superintendent of Excise, by letter dated 30-5-1986, confirmed that the barge would be exempted from payment of Central Excise Duty. The said barge was cleared without payment of excise duty. Subsequently, the petitioners filed classification list (Serial No. 21/86-87) in respect of another barge M.V. Neil claiming total exemption from excise duty under Notification No. 76/86-CE dated 10-2-1986 read with Trade Notice No. 3/T.I. No. 68(1)/84 dated 1-3-1984 and the said classification list was duly approved by Assistant Collector of Customs, namely, respondent R.G. Nagvenkar. On 13-5-1987, the petitioners got barge M.V. Neil, which was manufactured for one B.P. Haryani, cleared without payment of Central Excise in conformity with the Classification List No. 21/86-87 dated 18-8-1986. The said M.V. Neil is a vessel specified for the transport of ores.

2. On 4-12-1987, Superintendent of Central Excise, Vasco-da-Gama, issued Show Cause Notice to the petitioners on the ground that barge M.V. Neil, an inland vessel, cannot be treated as ocean going vessel in the light of the judgment of the Supreme Court in (M/s. Chowgule and Co. Pvt. Ltd. v. Union of India)1, 1987(2) Bom.C.R. 691 , wherein it was held that the primary purpose and actual use would be relevant considerations for deciding as to whether a vessel is an ocean going vessel or not. It was further alleged in the said notice that the very fact that the vessel M.V. Neil, which is ore carrying vessel and registered with Captain of Ports as inland vessel, by itself, would show that the vessel M.V. Neil is not an ocean going vessel. The notice further states that since the said barge M.V. Neil was exempted from payment of excise duty on the ground that it was ocean going vessel but in the light of the Apex Court judgment in M/s. Chowgule Co. Pvt. Ltd. v. Union of India (supra), it could not be treated as ocean going vessel and, as such, liable to pay the excise duty at 15% ad- valorem, which works out to Rs. 7,20,000/-. Accordingly, the petitioners were directed to show cause as to why the differential duty amounting to Rs. 7,20,000/- should not be recovered from the petitioners under section 11-A of the Central Excise Act, 1944 (hereinafter called 'the said Act' ).

3. The petitioners had filed reply to show cause and by order dated 30th June, 1988, the Assistant Collector of Customs and Central Excise, Goa, rejected the cause shown by the petitioners and confirmed demand for payment of excise duty to the tune of Rs. 7,20,000/-. It is this order which is impugned in this writ petition and the petitioners seek directions under Article 226 of the Constitution of India for quashing of the said order. No return has been filed by the respondents.

4. The Assistant Collector of Customs, respondent No. 1, relying upon the Apex Court judgment in M/s. Chowgule and Co. Pvt. Ltd. v. Union of India (supra) had held that since vessel M.V. Neil is carrying ore from mining head (loading point) to the port area by inland waterways and was, though registered with the Captain of Ports as inland vessel, the said vessel M.V. Neil could not be treated as ocean going vessel so as to qualify for exemption under Notification No. 76/86-CE dated 10-2-1986. In respect of the contention of the petitioners that the classification could not be revised it was held by respondent No. 1 that if there is change of circumstances or change in the law, then principle of constructive res judicata would not come in the

Click Here to Read the rest of this document