V.T. Ragha Yachari, Member (J)

1. The respondents, M/s Industrial Marketing Corporation manufacture Varnished Fibre Glass Cloth, Varnished Sleevings and Varnished Fibre Glass Tapes. Under his order dated 25-7-1981 the Assistant Collector of Central Excise, Bombay Division C-II classified the first two products under Tariff Item 22B-CET and the last one under Tariff Item 68-CET. The respondents preferred an appeal in respect of the classification of the first two items. Under his order dated 23-10-1981, the Appellate Collector of Central Excise, Bombay, set aside the order of the Assistant Collector in the said matter and held that the said two products were also classifiable under Tariff Item No. 68-CET. Under notice dated 21-9-1982 the Central Government, in exercise of its powers under Section 36(2) of the Central Excises and Salt Act, as it then stood, indicated to the respondents that it proposed to revise the order of the Appellate Collector and restore the classification to Tariff Item 22B-CET. Under the said notice the respondents were called upon to show cause why the said variation should not be ordered. The respondents sent their reply reiterating their contentions raised before the Appellate Collector. It is the said proceedings initiated under the abovesaid Show Cause Notice that, on transfer, are being dealt with as an appeal before this Tribunal.

2. We have heard Shri Vineet Ohri, Senior Departmental Representative, for the appellant Collector and Shri S.L. Rajgarhia, Partner of the respondents, on behalf of the respondents.

3. An objection had been taken in the reply to the Show Cause Notice that the show cause Notice is barred by limitation as it had been issued after the expiry of the period of six months from the date of the order-in-appeal. In respect of this preliminary contention, Shri Ohri submitted that the order of the Assistant Collector was on a classification list filed by the respondents and dealt with the question of classification and that the order of the Appellate Collector also, therefore, dealt with the question of classification only and, in the circumstances, the period of limitation for the issue of the Review Show Cause Notice under Section 36(2) of the Act, as it then stood, was a period of one year and not six months only. Section 36(2) read as follows :

"Section 36(2).-The Central Government may, of its own motion or otherwise, call for and examine the record of any proceeding in which any decision or order has been passed under Section 35 or Section 35A of this Act for the purpose of satisfying itself as to the correctness, legality or propriety of such decision or order and may pass such order thereon as it thinks fit :

Provided that no decision or order shall be varied so as to prejudicially affect any person unless such person is given a reasonable opportunity of making a representation and, if he so desires, of being heard in his defence :

Provided further that no proceedings shall be commenced under this Sub-section in respect of any decision or order (whether such decision or order has been passed before or after the coming into force of this subsection) after the expiration of a period of one year from the date of such decision or order :

Provided also that where the Central Government is of opinion that any duty of excise has not been levied or has been short-levied or erroneously refunded, no order levying or enhancing the duty, or no order requiring payment of the duty so refunded, shall be made under this Section unless the person affected by the proposed order is given notice to show cause against it within the time limit specified in Section 11A."

4. It is seen therefrom that the period of limitation of six months as mentioned by the respondents would apply if the proceedings were such as are mentioned in the third proviso, dealing with demands for payment of duty. But as Shri Ohri points out, the dispute in the present case related to classification, being under an order by