Cycle lamps are not part of a cycle and are, therefore, not exempt from duty. A show cause notice is not prejudicial if it only spells out the revised thinking of the concerned authority pertaining to exemption and does not prejudge the issue involved. A demand for duty for six months prior to the show cause notice is valid under Section 11-A of the Central Excise Act.

SATHIADEV, J.

These Writ Appeals are preferred against the order in W.P. No. 1024 of 1981 dated 20-7-1983, W.A. No. 803/83 is filed by the Writ Petitioner, whereas the latter appeal W.A. No. 484/84, is by the respondents therein.

2.The Writ Petition was filed against the order dated 5-2-1981 of the second respondent (ranking of parties as in Writ Petition) confirming the demand for Rs. 8, 79, 449.13, substituting the original demand for Rs. 7, 09, 237.84. The petitioner company is engaged in the manufacture of cycle lamps which fall under Item 68 of the I Schedule to the Central Excises and Salt Act, 1944, hereinafter referred to as 'the Act'. As required under Rule 173-D of the Central Excise Rules, hereinafter referred to as 'the Rules', the company was filing classification lists for the goods manufactured and cleared by them. They were being approved from time to time. Treating cycle lamps as part of cycle, under Rule 8 exemption was granted for cycles and parts thereof under Notification No. 55 of 1975 as amended by Notification No. 102 of 1980 dated 18-6-1980. Second respondent issued a show cause notice dated 24-10-1980 claiming that the classification lists submitted were approved upto to 18-6-1980 under Notification No. ........ of 1979 dated 1-3-1979, that under Notification No. 55/75 as amended by Notification No. 192/80 dated 18-6-1980, it is considered that dynamos are not part of the cycle eligible for exemption and that petitioner has to show cause within one month from the date of receipt of the notice as to why the exemption given in the said notification should not be denied to them and why the differential duty for the clearance made in the last six months prior to the show cause notice should not be collected under Rule 10. Petitioner replied to this notice on 19-11-1980 pointing out that dynamos are designed for use only in cycle, and in commercial parlance, they are treated as cycle parts and that a similar manufacturer of dynamos like M/s. Sankyo Ltd. was not paying duty and hence the show cause notice is illegal. After giving a personal hearing, the impugned order came to be passed.

3.The Learned Judge held that it is only the popular commercial view that has to be accepted and acted upon relating to classifications, and when cycles can be used without dynamos, it is not part of the cycle, but proceeded to hold that as the show cause notice had pre-judged the matter, it is bad in law and, consequently allowed the writ petition with liberty to the respondents to proceed afresh, if it is permissible in law. On being aggrieved with such views taken, these writ appeals are preferred.

4.Though not only for the period covered by the writ appeals but for subsequent periods as well, on demands raised, the petitioner had filed W.P. Nos. 8709 and 8710 of 1984; in view of Notification No. 3 of 1986 dated 16-1-1986 issued under Section 11C of the Act, directing that no duty shall be required to be paid in respect of cycle accessories for the period from 19-6-1980 to 16-3-1986, those two writ petitions had to be dismissed as having become infructuous. Under the show cause notice dated 24-10-80, the relevant period begins from 24-4-1980. By notification dated 16-1-1986, the demand of duty having been given up with effect from 19-6-1980, these writ appeals now cover only a period of 86 days, i.e. from 24-4-1980 to 19-6-1980. The limited point involved is, whether the show cause notice as issued, could be set aside on the grounds relied upon by the learned Judge, for this period.

5.Mr. T. Somasundaram, learned counsel for respondents, would submit that no part of the show cause notice had resulted in pre-judging of the issue by the authority, and it only refers to what was proposed to be done, because cycle lamps and parts thereof are not considered as parts of cycle eligible for exemption under the three notifications, above referred to. Bearing in mind that the lists submitted were approved upto 18-6-1980, bas