K.S. Venkataramani, Member (T)

1. The petition has been filed seeking to adduce additional grounds which, for the reasons contained therein, is allowed.

2. E/Stay/716/87. The petition is seeking a say of the proceedings before the Collector for rendering a decision on merits on the issues raised in the Show Cause Notice dated 12/5/83 pursuant to the impugned order of the Collector dated 24-4-1987. Since we intend to take up the appeal filed before us against the Collector's Order dated 24-4-1987 today itself for disposal on merits, the petition has become infructuous and is accordingly dismissed.

3. A. No. E/430/87. - This appeal is directed against the order dated 24-4-1987 passed by the Collector of Central Excise, Madurai, by which he had held that the Collector had jurisdiction to issue the Show Cause Notice demanding duty from the appellants for a period March 1979 to May 1981 and the same is not hit by limitation.

4. The appellants are manufacturers of Hydrochloric Acid which was liable to excise duty under the erstwhile Central Excise Tariff Item 14G. The origin of the dispute is a Show Cause Notice issued on 12-5-1983 by the Superintendent of Central Excise (Technical) Madurai, asking the appellants to show cause to the Collector as to why the assessable value of hydrochloric acid as approved for another manufacturer viz. Mettur Chemicals Industrial Corporation Limited, Mettur Dam, should not be adopted for the hydrochloric acid produced and consumed by the appellants during the period 1-3-1979 to 30-11-1982 and why the differential duty amounting to Rs.36,18,045.40 for the above period should not be demanded from the appellants under Rule 9(2) of the Central Excise Rules 1944 read with Section 11A of the Central Excises Salt Act, 1944 and why a penalty should not be imposed on the appellants under Rule 9(2) and 173Q of Central Excise Rules 1944 for the contravention of the provisions of Rule 9(1), 173B, 173C read with Rule 173F and 173G as well as Rule 226 of the Central Excise Rules. In reply to the Show Cause Notice, the appellants raised certain preliminary issues, which they contended, should be decided first as they went to the root of the matter. These were all questioning the Collector's jurisdiction to issue the Show Cause Notice for the payment of duty for the back period, and on limitation. The Collector took the stand that there could be no separate decision for jurisdiction as demanded by the appellants, whereupon the appellants moved the Madras High Court, and the Collector filed a counter before the Court offering to decide the preliminary issues of limitation and jurisdiction as requested for by the appellants. On a consideration of the preliminary petitions raised by the appellants on these issues, the Collector passed the impugned order against which the present appeal has been filed.

5. Shri K. Narasimhan, the learned Counsel appeared along with the learned Counsel Shri S.V. Subramanian for the appellants. It was contended that the Show Cause Notice issued by the Collector covers the period 1-3-1979 to 30-11-1982. It was pointed out that in this, for the demand for the period 1-3-1979 to 31-5-1981, the Superintendent of Central Excise, Tiruchendur Range, had already issued a notice to the appellants on 25-8-1981 demanding a sum representing the differential duty on hydrochloric acid amounting to Rs. 1,62,689.83. In response to this, the appellants had sent a detailed reply resisting the demand dated 12-11-1981. Subsequently, they had addressed a letter to the Collector on 18-1-1982, endorsing a copy to the Assistant Collector, in which they had referred to the Show Cause Notice issued by the Superintendent, and had agreed to pay the amount of differential duty demanded in order to maintain good and cordial relations with the department. The Assistant Collector issued a letter dated 3-2-1982 in response to this in which he informed the appellants that they were permitted to pay the amount specifie