K.L. Rekhi, Member (T)

1. The point of dispute involved in this appeal is whether tubular shaped are chamber housings manufactured by the appellants from glass fabrics, which they purchase from outside, fall under Tariff Item 22F(4) or under Item 68 of the Central Excise Tariff. These two Tariff Items read as under :-

"22. F. Mineral fibres and yarn and manufactures therefrom, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power, the following, namely :

(1) Glass fibres and yarn including glass tissues and glass wool;

(2) Asbestos fibre and yarn;

(3) any other mineral fibre or yarn, whether continuous or otherwise, such as, slag wool and rock wool;

(4) Other manufactures in which mineral fibres or yarn or both predominate or predominates in weight.

Explanation.-This Item does not include asbestos cement products." "68. All other goods, not elsewhere specified, excluding-

2. Initially, the subject housings were classified by the Department under Item 68. On 5-12-80, the Assistant Collector issued a notice calling upon the appellants to show cause as to why the classification should not be changed to Item 22F(4). The ground given for the proposed change in the classification was that glass fibre predominated in the housing. This notice did not say specifically that any differential duty for the past period was also proposed to be recovered from the appellants. On 28-2-81, the Assistant Collector directed the appellants to assess the goods provisionally pending his decision on the re-classification. However, within a mouth, on 30-3-81 to be precise, the Assistant Collector was able to decide the matter. In his Order-in-Original he maintained the classification under Item 68 on the ground that the goods were not manufactured from mineral fibres or yarn but were the products manufactured from the manufactures of mineral fibre and yarn. The Collector was tentatively of the view that the order passed by the Assistant Collector was not proper, legal and correct. The Collector initiated proceedings to review the Assistant Collector's order by issuing a notice to the appellants, on 7/12-10-81 calling upon them to show cause why the order of the Assistant Collector should not be set aside or such other order as deemed fit passed. The grounds given for the proposed review were-

(1) The goods were manufactured from glass fabrics which were in turn manufactured from glass fibre and yarn, and

(2) Content of the glass fibre and yarn was more in weight than the plastic component in the goods.

In this show cause notice also no differential duty was demanded for the past period as such. After hearing the appellants, the Collector passed the impugned order in which he held that-

(1) The words "manufactures therefrom" in the entry included not only first manufactures of mineral fibres and yarn but also subsequent manufactures wherein mineral fibre or yarn is used and accordingly the goods were correctly classifiable under Item 22 F(4);

(2) Demand of duty should be restricted to six months prior to the date of issue of demand notice. The Collector made this order in respect of the period of demand in reply to the appellants' argument before him that his show cause notice for review was time-barred since it had been issued after six months of the Assistant Collector's order. Nevertheless, the Collector simultaneously held that the time-limit for issuing review show cause notice under the then Section 36(2) of the Central Excises and Salt Act, 1944, was one year and not six months.

Pursuant to the Collector's order, the Superintendent issued a letter to the appellants on 30-4-83 saying that the assessments had been provisional from June, 1979, that the appellants should pay the differential duty amounting to Rs. 10,41,524.27 for the period from September, 1980 to February, 1983 and that they should furnish particulars of clearances for the earlier period from June, 1979 to August, 1980 so that the demand for