1997 Supreme(Mad) 803

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE RAJU AND THE HONOURABLE MR. JUSTICE V. KANAGARAJ
Union of India - Appellant
Versus
Tube Products of India - Respondents
Writ Appeal No. 723 of 1989
Decided On : 08 August 1997

Refund proceedings finally terminated before commencement of 1991 Amendment Act cannot be re-opened and governed by Section 11B(3) as amended.

Headnote:

CENTRAL EXCISE - REFUND - REVISION OF ORDER - CLASSIFICATION OF GOODS - SECTION 35A, 11A, 11B OF CENTRAL EXCISE AND SALT ACT, 1944 - AMENDMENT ACT 40/1991 - APPLICABILITY - REFUND PROCEEDINGS FINALLY TERMINATED - RE-OPENING NOT PERMISSIBLE - AMENDMENT ACT NOT APPLICABLE - WRIT APPEAL DISMISSED.

Fact of the Case:

The assessee, a manufacturer of iron and steel products, was classified under Tariff Item 26AA and also manufactured collecting electrodes sections, punched `C' section, shutter lath section and fork blades for cycles. The item shutter lath was manufactured out of cold rolled strips. When Tariff Item 68 was introduced in 1975, the assessee was advised to pay duty under Tariff Item 68 in respect of item shutter lath which was paid by them under protest. The Assistant Collector, Madras-III Division issued an order dated 17-7-1976 classifying the said item under Tariff Item 68. Aggrieved, the assessee filed an appeal before the Appellate Collector, who by his order dated 23-12-1977 set aside the order of the Assistant Collector with a direction to readjudicate the case and passed a speaking and reasoned order to meet the ends of justice. The Assistant Collector, Madras-III Division, after issuing a show cause notice and considering the representation of the assessee, passed an order dated 23-2-1979 taking the view that the item in question was classified under Tariff Item 68 of the Central Excise Tariff. Once again, the matter has been pursued by the assessee on appeal to the Appellate Collector who by his order dated 16-1-1980 came to the conclusion that the process of manufacture of shutter lath section has to be studied in detail and remitted the matter to the Assistant Collector with a direction therefor and the Assistant Collector, Madras-III Division, after visiting the factory on 25-4-1980 and studying the process of manufacture of shutter lath in detail, passed an order dated 29-4-1980 classifying the said item under Tariff Item 26AA(ia) of the Central Excise Tariff. On the basis of the said orders and on the claims for refund made on 14-5-1980 for the refund of the duty paid on shutter lath sections under Tariff Item 68 during the period from March, 1975 to May, 1980 since the product has been subsequently found to be classified under Tariff Item 26AA(ia) and therefore, became completely exempted from duty by virtue of a Notification No. 75/67, dated 20-5-1967. Consequently, the refund has been allowed to the tune of Rs. 12, 78, 921.69 and a sum of Rs. 6, 47, 497.98 came to be refunded after adjusting a sum of Rs. 6, 31, 423.71 towards another demand pending with the Department against the assessee. In a communication dated 29-12-1980 enclosing a cheque dated 29-12-1980.

Finding of the Court:

The Collector of Central Excise, Madras, by his show cause notice issued under Section 35A(2) of the Central Excises and Salt Act, 1944, hereinafter referred to as the `Act', proposed to set aside the order of the Assistant Collector on the ground that the product in question really falls and is assessable under Tariff Item No. 68 and the same will not fall under Tariff Item 26AA(ia) calling upon the assessee as to why the proceedings dated 29-12-1980 should not be set aside and appropriate order passed. The assessee filed his representation and objected to the proposals contained in the show cause notice. The Collector of Central Excise, Madras, by his order dated 6-2-1982 confirmed his proposals by coming to the conclusion that shutter lath sections which are obtained by the process of rolling have different commercial identity and are known in the trade by a special identifiable name and therefore, they should rightly be classified under Tariff Item 68 and not under Tariff Item 26AA(ia). Thereupon, as a consequence, the Collector proposed to set aside the order of the Assistant Collector dated 29-12-1980 in sanctioning the refund as irregular and ordered that an amount of Rs. 12, 78, 921.699 said to be the incorrect refund granted to the respondent should be recovered under Section 11A of the Central Excises and Salt Act, 1944.

Issues: Whether the Collector of Central Excise had jurisdiction to interfere with the orders dated 29-4-1980 passed by the Assistant Collector classifying the items manufactured by the petitioner as one falling under Tariff Item 26AA(ia) by purporting to exercise powers under Section 35A of the Act, when a period of one year had already lapsed from 29-4-1980?

Ratio Decidendi: The Collector of Central Excise had no jurisdiction to interfere with the orders dated 29-4-1980 because bar of limitation had set in. The refund proceedings have finally terminated in the sense that the appeal period has also expired before the commencement of the 1991 Amendment Act on 19-9-1991, they cannot be re-opened and/or governed by Section 11B(3) as amended.

Final Decision: Writ Appeal dismissed.