K. Gopal Hedge, Member (J)

1. This appeal arises out of and is directed against the order in appeal bearing No. C/536/BII-119/83, dated 14-3-1983 passed by the Collector of Central Excise (Appeals), Bombay.

2. The brief facts necessary for the disposal of this appeal are :

The appellants M/s. Kiran Spinning Mills at the relevant time engaged in business inter alia of manufacture of various types of yarn from synthetic fibres or admixture with natural fibres at their factory situated at Thane. By Notification No. 131/77 certain concessions were allowed to cross reel hanks on viscose and cotton yarn. But then, by another Notification No. 213/77, dated 6-7-77 the concession contemplated by Notification No. 131/77, dated 18-6-77 was allowable only to the sale of yarn in cross reel hanks to the co-operative societies provided the payment is made by cheque by the co-operative societies.

3. On 26-11-1977 the Superintendent of Central Excise, Thane requested the appellants to furnish the figures of the clearance of the cross reel hanks sold after 6-7-77 cleared under Notification No. 131/77. In this letter, the Superintendent also referred to the subsequent Notification No. 213/77, dated 6-7-77.

4. Since the appellants had not sold the yarn direct to any co-operative society, on 17-2-1978 the Superintendent issued a show cause notice demanding differential duty for the period from 6-7-1977 to 31-12-1977. The appellants sent a reply containing among other things that the demand was barred by time. The Assistant Collector who held the adjudication, however, rejected the contention of the appellants and confirmed the demand. On appeal, the Collector of Central Excise (Appeals) confirmed the order of the Assistant Collector. Hence this appeal.

5. During the hearing of this appeal, Shri Jois firstly contended that the department as well as the appellants were unaware of the withdrawal of concession granted under Notification No. 131/77, dated 8-6-77 by Notification No. 213/77, dated 6-7-77. It was due to the ignorance the appellants continued to avail of the concession conferred under Notification No. 131/77 in respect of the clearances of cross reel hanks. Shri Jois further submitted that as soon as the Central Excise Superintendent required them to furnish the particulars of the clearances, the same were submitted and further RT-12 returns were also submitted and they were finalised by the department. The show cause notice dated 17-2-1978 demanding differential duty for the period from 6-7-1977 to 31-12-1977 was barred atleast for the period being six months immediately preceding 17-2-1978. Shri Jois urged that the authorities below were not justified in treating the letter dated 26-11-1977 addressed by the Superintendent as the show cause notice and on that assumption their finding that no portion of the demand is barred by limitation is erroneous. Shri Jois also contended that since RT-12 returns were finalised the department cannot demand any differential duty thereafter. It was also contended by Shri Jois that no differential duty could be demanded in respect of yarn manufactured prior to 6-7-77 but cleared after 6-7-77. At this stage Shri Jois was informed by the Bench that if the above submission was to be accepted then this Regional Bench will have no jurisdiction to hear the appeal, since the appeal would involve among other things, a question having a relation to the rate of duty. Shri Jois after consulting his client gave up the above contention and restricted to the question of limitation only.

6. Shri Arya appearing for the Collector, however, supported the order passed by the authorities below. He urged that the letter dated 26-11-1977 addressed by the Superintendent should be considered as a show cause notice as has been held by the authorities below and if that is considered as a show cause notice no portion of the demand is barred. Shri Arya also referred to the order of the Collector (Appeals) wherein, the Collector (Appea