ORDER
G.P. Agarwal, Member (J)
1. Being dissatisfied with the demand of duty of Rs. 14,052.00, the appellant has filed the present appeal.
2. Shortly put the facts of the case are that the appellants are manufacturer of Bathromm and Sanitary Fittings, & parts thereof. They imported “components for Bathroom” and filed their Bill of Entry dated 03-9-1986 for clearance of the goods. The goods were classified under Chapter Heading No. 74 and Customs Duly of Rs. 93,660.00 was paid and goods were cleared. However, it appears that subsequently the goods were found to be of plastic as per examination report. Hence the Department formed a tentative view that the subject goods attract Customs Duty at the rate of 100% plus 40% and C.V.D. @ 15%. Thus there was a short levy of customs duty of Rs. 14,052.00. As a consequence thereof Show Cause Notice dated 20-3-1987 was issued to the appellants calling upon them to show cause as to why the aforesaid differential duty be not demanded from them. The appellants contested the Show Cause Notice. After the usual adjudication proceedings the Assistant Collector confirmed the said demand of differential duty. Against that Order of the Assistant Collector the appellants filed their appeal before the Collector of Customs, New Delhi but without success. Hence the present appeal.
3. Arguing on behalf of the appellants, Shri R.L. Vora, learned Consultant submitted that the demand in the instant case was time-barred being raised beyond six months that is to say the duty was paid on 24-9-1986 whereas the Show Cause Notice issued on 20-3-1987 was received by the appellants on 25-3-1987. Thus so counted from the date of the receipt of the Show Cause Notice by the appellants the demand was time-barred. He also submitted that since the goods were cleared earlier after proper assessment no fresh adjudication proceedings by issuing the demand for differential duty can be initiated. On merits he submitted that the subject imported goods were components for Bathroom made of brass. Challenging the findings of the authorities below that on examination the subject goods were found of plastic, he contended that at no stage the said examination report was made available to the appellants. Even it is not known when the goods were examined. The appellants came to know about it for the first time only when they received the Show Cause Notice wherein a reference was made of the alleged examination report. To top his arguments he also contended that personal hearing was not granted to the appellants by the Assistant Collector. The Collector (Appeals) also erred in observing that it was for the appellants to prove that the said show cause notice issued on 20-3-1.987 was received by them only on 25-3-1987 emphasising that it was for the Department to prove otherwise by producing the Acknowledgement Due. Continuing further he also submitted that to say that the words “made of brass” were clearly interpolated in separate hand-writing in the Bill of Entry is wrong. Before recording this finding the Collector of Customs (Appeals) should have given an opportunity to the appellants to explain the said alleged interpolation. Case of
Harish Silk Mills Pvt. Ltd. v. Union of India and Ors., 1989 (43) E.L.T. 614 (Bom.)
, Bombay was cited wherein while determining the question as to what is the relevant date for the purpose of ‘rate of duty’ it was held that the ‘enhanced Customs duty cannot be charged once the goods have been assessed to duty and were already passed out of customs charges. In reply Shri K.K. Bhatia learned Jt. CDR, while supporting the impugned Order submitted that the show cause notice was issued within time and must have also been delivered to the appellants in time and if it was the defence of the appellants that it was received by them only on 25-3-1987 they should have proved it by producing the registered post envelope which was delivered to them containing the show cause notice. As regards the contention that goods were of plastic he submitted that the Collector (Appeals) clearly held that the words “made of brass” were clearly interpolated in separate handwriting in the Bill of Entry. As regards the bar of Section 47 of the Customs Act, he submitted that the said case of Bombay High Court is distinguishable on the facts itself.
4. We have considered the submissions. From the record we find that it is an admitted position that at the time of clearance the subject goods were assessed as components for “Bathrooms & Fittings made of brass”. From the Show Cause Notice dated 20-3-1987 we find that the differential duty was demanded on the ground that “the goods are of plastic which is mentioned on examination report and hence attract duty at the rate of 100% plus 40% and C.V.D. 15% (However the goods have been assessed as brass filter reasons not known). From the reply to the Show Cause Notice contained in their letter dated 24-10-1988 we find that after clearance of the goods the Audit stated that “the goods have been assessed as brass filter reasons not known” and how these goods were held by the Audit as plastic goods is not known to appellants. In their said reply the appellants also specifically stated that the aforesaid facts indicate that some examination done on the imported products have been kept away from the assessee and anything done at the back of the assessee is not admissible in evidence and as such is of no aid to the Customs Authorities in demanding a time barred demand of Rs. 14,052.00. In its Order-in-Original the Assistant Collector has referred to the said reply dated 24-10-1988 but curiously enough he has not dealt with the said contention of the appellants in his Order-in-Original dated 17-10-1989. In fact he has confirmed the demand relying upon the said examination report. From the impugned Order-in-Appeal we also find that the said contention was also taken up by the appellants before the Collector (Appeals) but he negatived this contention by observing that the “Bill of Entry described the goods as components for bathroom fittings and the words ‘made of brass’ were clearly interpolated in separate hand-writing. The invoice described the goods as ‘Sanitary Fittings Components head works’. Customs examination report dated 4-9-1986 on the reverse of the Bill of Entry described the goods as made of plastic and therefore the appellants’ contention on this point do not have any substance”. The original Bill of Entry containing customs examination report dated 4-9-1986 on its reverse must be in the custody of the Department but it was not filed before us by the Department. It was never argued before us by the learned Jt. CDR that the said report was made available to the appellants or a copy of it was ever supplied to them. It is also not understood as to when the Customs Examination Report dated 4-9-1986 described the subject goods on the reverse of the Bill of Entry as has been made of Plastic, how the same were allowed to be cleared as components for bathroom made of brass. Be that it may, the fact remains that the said examination report was never supplied to the appellants and the Assistant Collector did not confirm the demand on the ground that the words ‘made of brass’ were clearly interpolated in separate hand-writing. It appears that for the first time the Collector (Appeals) came out with a finding that on his observations it was noticed “that the Bill of Entry described the goods as components for bathroom fittings and the words ‘made of brass’ was clearly interpreted in separate hand-writing”. Admittedly no opportunity was given to the appellants to rebut the said allegation of interpolation. From the reply contained in letter dated 24-10-1988, we also find that the aforesaid contentions such as once the goods were cleared no adjudication proceedings can be initiated by issuing a Show Cause Notice; that the demand was time-barred; that the alleged examination of the goods, if any, was conducted behind the back of the appellants and even no copy of the examination report was supplied to them, were raised before the Assistant Collector, but he did not consider the same in his Order-in-Original. From the copy of the Memorandum of Appeal filed by the appellants before the Collector of Customs (Appeals), New Delhi, we also find that the said contentions, such as, no fresh adjudication proceedings can be initiated by issuing a Show Cause Notice when the goods were already assessed and cleared on payment of duty etc. were raised, but he has not considered the same in his impugned Order-in-Appeal, coupled with the fact that it was the grievance of the appellants that no personal hearing was granted to them by the Assistant Collector before passing his impugned Order-in-original. Under these circumstances, we feel it expedient in the interest of justice that the case should go back to the Assistant Collector of Customs, New Delhi, for de novo adjudication. We order accordingly. While doing so, the Assistant Collector would give a reasonably effective opportunity to the appellants to defend themselves and would pass a detailed and reasoned order with respect to each and every contention raised by the appellants.
5. In the result, both the impugned orders are set aside and the case is remanded to the Assistant Collector of Customs, New Delhi, for de novo adjudication, as aforesaid. Since the matter is an old one, he will expedite the proceedings.