G. Sankaran, Member (T)

1. This matter is being heard and disposed of in accordance with the directions given by the Hon'ble High Court of Gujarat in the Order and judgment delivered on 28-7-1983 in S.C.A. No. 444 of 1978. By the said order, the Court quashed and set aside the Order-in-Revision No. 1425/77, dated 25-7-1977/4-8-1977 passed by the Government of India in the revision petition filed by Devarsons Pvt. Ltd. (hereinafter called Devarsons, for brevity's sake) against the Order-in-Appeal No. V 9(14) 2-2/OA/71/1841/Bombay dated 19-2-1974 passed by the Appellate Collector of Central Excise, Bombay. The Court remanded the matter to this Tribunal for deciding it afresh in the light of the evidence and the material that may be produced on the questions indicated in their Lordships' judgment dated 28-7-1983 and after giving an opportunity of hearing to the parties afresh. Copies of the order and the judgment were forwarded to this Tribunal by the Deputy Registrar of the High Court on 6-10-1983.

2. At this stage, and before setting out the questions referred to above, it will be useful to set out briefly the facts of the case. Devarsons are engaged in manufacturing oil and spirit soluble colours. These goods used to be classified in the Central Excise Tariff Schedule (CET) under item No. 14-I (1)(5) ("Pigments, colours, paints and enamels, not otherwise specified") and exempted from duty under Central Government's Notification No. 23/55, dated 29-4-1955 in terms of serial No. 6 thereof which read: "Lake colours and pigment dye stuffs". By the Finance Act of 1961, a new item 14-D was inserted in the CET reading :

"14D-Dyes derived from coal tar and coal tar derivatives used in any dyeing process, all sorts."

This entry was substituted by the following one by the Finance Act, 1962, with effect from 24-4-1962 :

"14D-Synthetic organic dyestuffs (including pigment dyestuffs) and synthetic organic derivatives used in any dyeing process."

It appears that sometime in 1963, the oil soluble colours were sought to be classified under item No. 14-D. However, the Assistant Collector by an order of 17/18-3-1964, ordered classification of the product under item 14-I (1)(5), eligible for exemption under notification No. 23/55. This state of affairs continued upto 1970 when, in the wake of Baroda Collectorate Trade Notice No. 232/1970, dated 22-8-1970 (to the effect that oil or spirit soluble colours were liable to be classified as synthetic organic dyestuffs under item No. 14-D GET). Devarson filed a classification list (C.L.) of 21-11-1970 under item No. 14-D CET), Devarson filed classification list (C-L) of 21-11-1970 under item No. 14-D under protest. On 26-12-1970, the Supdt. of Central Excise called upon Devarson to show cause why they should not pay the sum of Rs. 23,920.15 being the differential amount of duty on the product in question cleared during the period 4-9-1970-14-I0-1970 with reference to item No. 14-D CET. The notice invoked Rule 10 read with Rules 173-J and 173-Q(d) of the Central Excise Rules, 1944 (hereinafter called "the Rules"). After holding adjudication proceedings, the Assistant Collector confirmed the said demand vide his order dated 14-4-1971. The matter was pursued in appeal by Devarsons. In his Order-in-Appeal dated 14-2-1974, the Appellate Collector held that-

(i) The show cause notice (SCN) dated 26-12-1970 was within the prescribed time-limit of one year and was not time-barred with respect to the clearances for the period 4-9-1970-4-10-1970.

(ii) Rule 173-Q(d) had no application to the facts of the case, and

(iii) the subject products fell within the scope of item No. 14-D CET, and rejected the appeal.

The matter was further pursued by Devarsons in revision. In the Order-in-Revision dated 25-7-1977, the Central Government held that solvent colours are synthetic organic dyestuffs (S.O. dyestuffs) intended to impart colour to the medium in which they are soluble. Irrespective of their use, the goods in question we