Back
High Court Of Calcutta
Ajit Kumar Sengupta
GONTERMAN PEIPERS (INDIA) LIMITED - Appellant
Versus
ADDITIONAL SECRETARY TO THE GOVERNMENT OF INDIA - Respondent
C. R. 12878 (W) Of 1981
Decided On : 05/05/1986
CENTRAL EXCISES AND SALT ACT, 1944 - SECTION 36(2) - REVISION OF ORDER - SHOW CAUSE NOTICE - JURISDICTION - CONDITIONS PRECEDENT - SATISFACTION OF REVISIONAL AUTHORITY - MATERIALS ON RECORD - CLASSIFICATION OF GOODS - TARIFF ITEM 68 - RESIDUARY ITEM - APPLICATION - CAST IRON ROLLS AND CAST STEEL ROLLS - MANUFACTURE - PROCESS - SALEABLE PRODUCT - MACHINING AND FINISHING - DISTINCT SHAPE AND CHARACTER - IDENTIFIABLE MACHINE PARTS - CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL - JURISDICTION - TRANSFER OF PROCEEDINGS.
Fact of the Case:
The petitioner, a manufacturer of cast iron rolls and cast steel rolls, challenged a show cause notice issued by the Additional Secretary, Government of India, under Section 36(2) of the Central Excises and Salt Act, 1944, for revising the order passed by the Appellate Collector of Central Excise. The petitioner contended that the notice was illegal, invalid, and without jurisdiction as the conditions precedent for assuming jurisdiction under Section 36(2) of the Act were not complied with. The respondents contended that the petitioner could not challenge the notice in the writ jurisdiction and that the High Court could not quash the notice issued under Section 36(2) of the Act.
Finding of the Court:
The High Court held that the show cause notice was issued without jurisdiction and set it aside. The Court found that there were no materials on record to indicate that there was any material before the Revisional Authority for arriving at the alleged satisfaction for initiation of the said proceedings under Section 36(2). The Court also held that the petitioner could challenge the notice in the writ jurisdiction and that the High Court had the power to set aside such a notice if it came to the conclusion that the show cause notice itself was without jurisdiction.
Issues: Whether the show cause notice issued by the Additional Secretary, Government of India, under Section 36(2) of the Central Excises and Salt Act, 1944, was illegal, invalid, and without jurisdiction.
Ratio Decidendi: The High Court held that the show cause notice was issued without jurisdiction and set it aside. The Court found that there were no materials on record to indicate that there was any material before the Revisional Authority for arriving at the alleged satisfaction for initiation of the said proceedings under Section 36(2). The Court also held that the petitioner could challenge the notice in the writ jurisdiction and that the High Court had the power to set aside such a notice if it came to the conclusion that the show cause notice itself was without jurisdiction.
Final Decision: The High Court made the rule absolute, set aside the show cause notice, and directed the respondents to give effect to the order of the Appellate Collector and refund the amount of Rs. 92,28,857.03 to the petitioner within eight weeks from the date of communication of the order.
( 1 ) IN this application under Article 226 of the Constitution the petitioner has challenged a show cause notice dated 10th September, 1981 issued by the Additional Secretary, Government of India under Section 36 (2) of the Central Excises and Salt Act, 1944 for revising the order passed by the Appellate Collector of Central Excise dated 30th April, 1981. The notice dated 27th November, 1981 has called upon the petitioner to pay duty at the rate of 8% under item 68 of the Central Excise Tariff. The facts leading to the issuance of the said impugned notice are stated briefly hereafter.
( 2 ) THE petitioner manufactures cast iron rolls and cast steel rolls. Central Excise duty under the Central Excises and Salt Act, 1944 (hereinafter referred to as the said Act) was at all material times leviable on the manufacture of the said Cast Iron Rolls and Cast Steel Rolls under. Item Nos. 25 and 26aa. respectively of the First Schedule to the said Act. The duty leviable under the said Act was exempted from time to time either wholly or in part under the various notifications issued under the provisions of the Central Excise Rules, 1944 (hereinafter referred to as the said Rules), During the period when the duty was exempt only in part, the Central Excise authorities levied and collected duty on Cast Iron Rolls under Item No. 25 and Cast Steel Rolls under Item No. 26aa.
( 3 ) CAST Iron Rolls are being manufactured by the petitioner since the year 1968 and cast steel rolls since the year 1969. Till March 1, 1975 it was the admitted position that cast iron rolls and cast steel rolls were classifiable under Item No. 25 and Item No. 26aa. respectively of the First Schedule, to the Central Excises and Salt Act, 1944 (hereinafter referred to as the said Act ). On the aforesaid basis exemptions under notifications No. 74/62 C. E. dated April 24, 1962 and 133/65 C. E. dated August 20, 1965 were granted to the petitioner in respect of cast iron rolls and cast steel rolls respectively.
( 4 ) ON March 1, 1975 item No. 68 was inserted in the First Schedule to the said Act providing for levy of duty on all other goods not elsewhere specified. After insertion of the said item No. 68 the Central Excise authorities started taking the view that duty in respect of cast iron rolls was payable under Item No. 68 and not under Item No. 25. While approving the classification list filed by the petitioner on January 11, 1978, the Assistant Collector, by his order dated July 11, 1978 made on the said classification list, held inter alia, that cast iron rolls would be liable to duty under item No. 68. Similarly while approving the classification list filed in respect of cast steel rolls the Assistant Collector by his order dated October 6, 1977 (made on the said classification list itself) held inter alia that the said cast steel rolls before machining would be liable to duty under item No. 26aa. and after machining the same would be again liable to duty under item No. 68.
( 5 ) THE petitioner filed appeals against the said orders dated July 11, 1978 passed in respect of cast iron rolls and October 6, 1977 passed in respect of cast steel rolls. Both the said appeals were taken up for hearing by the Appellate Collector and by a consolidated order dated April 30, 1981 the Appellate Collector held inter alia that the said cast iron rolls and cast steel rolls are covered by item Nos. 25 and 26aa. respectively and that the same could not be classified under item No. 68. It was further held that it would not be correct to classify the said products under item No. 68 which was meant for goods not falling under any other item of the Central Excise Tariff. The orders passed by the Assistant Collector on July 11, 1978 and October 6, 1977 on the said classification lists were set aside and directions were given for refund of the amounts realised in respect of the said products under item No. 68.
( 6 ) THEREAFTER, the Additional Secretary, Govern
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
