Per S.K. Bhatnagar: This is an appeal against the order of the Collector (Appeals),New Delhi, dt. 26.5.1994.

2. The learned Counsel stated that the appellants were manufacturers of "Diamond Impregnated Segments" which were welded on alloy steel plates which in turn were used as saws in the sawing machines.

3. The appellants were using the segments for manufacturing the complete saw in their factory.

4. On 1.3.88theyhadfiledclassificationlistclaimingassessmentunderHeading 8202.00 and the benefit of Notification No. 108/88—CE dt. 1.3.88 and this was approved by the Assistant Collector by his order No. 118/88.

5. Again on 13.6.88, they had filed another classification list claiming the benefit but in spite of earlier approval a show cause notice was issued on the ground that the goods were assessable under Heading 8209.00. This notice was in respect of March, 1988 and did not cover clearance of April, 1988 which were allowed after giving the benefit of the exemption Notification in accordance with the earlier approval.

6. Again on 28.11.1988 another show cause notice was issued for the period 1.5.88 to 31.10.88 on the ground that the item was eligible for benefit of Notification No. 108/88 because the segments were specifically not covered under that Notification.

7. This show cause notice was subsequently withdrawn and the demand was dropped by the Assistant Collector's Order dt. 17.4.1989.

8. In spite of it another show cause notice dt. 16.1.89 was issued to the appellants in the context of the classification filed on 13.6.88 asking the appellants as to why the benefit of the exemption should not be denied. By the same notice it was ordered that in the meanwhile the goods may be cleared by making provisional assessment.

9. On 9.3.89 yet another show cause notice was issued for the period 1.11.88to 19.I.89 on the ground that benefit of Notification No. 108/88—CE was not available.

10. It is significant that although a provisional assessment had been ordered by the notice dt. 16.1.89, clearances from 20.1.89 to 17.4.89 were allowed provisionally at the higher rate only.

11. On 17.4.89, the Assistant Collector passed an adjudication order holding that the items were entitled to the benefit of Notification No. 108/88—CE and 207/88—CE and dropped the demands raised by show cause notice dt. 28.11.88. and further ordered finalisation of assessment which were being made provisionally in terms of a letter dt. 16.1.89.

12. In view of the above order the provisional assessment made between 20.1.89 to 17.4.89, the assessment should have been finalised at the lower rate by extending the benefit of the exemption Notification and the consequential refund should have been granted. However, this part of the order of the Assistant Collector was not implemented and the assessment continued to be provisional and decision was taken also on their application for refund.

13. Although above order of the Assistant Collector did not specifically refer to the show cause notices of 4.10.88 and9.3.89, it was logical that these should also have been withdrawn and the demands dropped in the light of Assistant Collector's order. However, this was not done and these were kept pending illogically without justification.

14. On20—3.90, the appellants filed another classification in view of change in the rate of special excise duty and following the Assistant Collector's order dt. 17.4.89 claimed the benefit of Notification No. 207/88—CE.

15. However, instead of approval they received show cause notice dt. 2.5.90 relating to the period 1.3 0.89 to 31.3.90.

16. This show cause notice was illegal because the Assistant Collector's order dt. 17.4.89 was in force and there was no order by a higher authority modifying or rescinding this order.

17. On 10.8.90 yet another show cause notice was issued with reference to the classification list dt.20.3.90proposingtodeny the benefit of Notification No. 207/88—CE and also directing that the future assessment will be made provisionally by