S.D. Jha, V.P. (J)

1. The question for decision in these appeals is proper classification of the appellants products carbon paper and carbonised adding machine rolls before amendment of Tariff item 17 in 1982 - whether the two products or any of them fell under item 17(2) of Central Excise Tariff as claimed by the Revenue or Tariff item 68 as claimed by the appellants and the allied question is that if the products or any of them be held classifiable under T.I. 17(2), the period for which demands should be raised.

2. It might be stated that after the classification of the products had been decided by the lower authorities under T.I. 17(2) and not T.I.68 as originally approved and claimed by the appellants, leading to Appeal No. 1346/83-C to the Tribunal by the appellants, the demand consequent to this order of classification was quantified against the appellants. As respects this quantification another appeal No. 1284/84-C was filed by the appellants to the Tribunal. This appeal was not originally cause listed but on request of the appellants, to which the respondent had no objection, the two appeals were listed for hearing together along with connected Cross Objection No. 113/83-C and heard together.

3. Facts material for decision of these appeals are that the appellants classification list 5/79-80 dated 1.4.1979 classifying Carbon Paper and Carbonised Adding Machine Rolls under Item 68 of CET was approved by the Assistant Collector on 4.9.1979. The appellants till December 1979 continued to clear these products under this Tariff Item. The Superintendent of Central Excise by notice dated 29.12.1979 rescinded this approval and called upon the appellants to show cause why the products be not classified under T.I. 17(2) on the ground that the products were coated papers classifiable under item ibid from 16.3.1976 due to change in definition of T.I. 17. The notice called upon the appellants to furnish written explanation against the proposed action and also opportunity of hearing was to be given to them. The Appellants filed reply to the show cause notice through their letters dated 1.1.1980 and 17.1.1980 and contended that there was no statutory change in definition of T.I. 17(2) justifying inclusion of their products under this sub-item. They also availed of personal hearing and submitted written submissions. After following the usual procedure the Assistant Collector of Central Excise, Bombay, Division 'K' by order dated 1.7.1980 held the products classifiable under T.I. 17(2) and called upon the appellants to pay central excise duty for six months prior to issue of show cause notice dated 29.12.1979 under Rule 10 (as it then existed) of Central Excise Rules, 1944. The appellants challenged this order in appeal before the Collector of Central Excise (Appeals) Bombay and urged several grounds. The Collector (Appeals) by order dated 23.12.1983 substantially upheld the order of the Assistant Collector of Central Excise though in para 7 of his order after saying the demand for differential duty has to be restricted for six months prior to the date of show cause notice dated 29.12.1979 further observed that as the show cause notice for recovery of duty in pursuance of the order had been issued after the filing of the appeal before him and the notices did not form the subject matter of the appeal before him, he was not passing any order on the said notices and the appellants were free to agitate against the notices before the lower authority and if need arose by approaching his office. With this modification he rejected the appeal. Demands of differential duty against the appellants are for the period 29.6.1979 to 31.12.1979 and 1.1.1980 to 18.6.1980 respectively amounting to Rs. 2,01,625.75 and Rs. 1,96,395.78 (Total : Rs. 3,98,021.53).

4. At the hearing of the appeal Shri K.R. Mehta, Consultant representing the appellants explained the process of manufacture of carbon paper and carbonised adding machine rolls. About first product