Collector Of Customs vs Switzer Instruments Ltd. on 14 June, 1993

Customs, Excise and Gold Tribunal – Tamil Nadu
Collector Of Customs vs Switzer Instruments Ltd. on 14 June, 1993
Equivalent citations: 1993 (48) ECR 596 Tri Chennai
Bench: S Kalyanam, V Gulati


S. Kalyanam, Member


1. Since we propose to dispose of the appeal itself today on a question of law, the stay application filed by the Department seeking stay of the operation of the impugned order is dismissed.

A. No. C/SB/2584/93/MAS

2. The appeal is filed by the Department against the order of the Collector of Customs (Appeals) Madras dated 27.11.1992 setting aside the demand of the Asstt. Collector of Customs, Air Cargo Complex against the respondent demanding a differential duty of Rs. 85,108 on ground of short levy, on the ground that the goods imported by the respondent, viz. Level Control Assembly are classifiable under Chapter 98.06.

3. Shri Gregory, the learned SDR submits that even though there was no specific show cause notice putting the respondent on notice with reference to the revision of the classification of the goods in question in as much as the respondent did not make any grievance against the same, the irregularity, if any, in the demand should be ignored.

4. Shri Raghavan, the learned Counsel for the Respondent submitted that the Department’s demand for differential duty without any show cause notice putting the respondent on notice on a question of revision of Classification is not sustainable and this position is well settled in law by a number of decisions.

5. We have considered the submissions made before us. On going through the record we find that the Department issued a demand notice seeking to recover the differential duty from the respondent and the respondent was not put on notice with reference to any proposed revision in regard to classification of the goods imported. It is well settled that before demanding any duty on ground of revision of classification, the party whose classification has already been accepted should be put on notice by the Department before the Department decide to revise the classification for raising of differential duty. In as much as the same has not been done, the demand is not sustainable in law and this position is well settled by the ratio of the ruling of the Supreme Court in the case of Gokak Patel Volkart v. Collector of Central Excise Belgaum reported in 28 ELT (53) : 1987 (11) ECR 363 (SC) : ECR C 1066 SC. Following the ratio of the Supreme Court we uphold the impugned order of the Collector (Appeals) and dismiss the appeal filed by the Department.

(Pronounced in the open Court)

Sd/- (S. Kalyamam)

V.P. Gulati, Member

6. I observe that by the show cause notice dated 16.9.1988 the authorities have demanded an amount of Rs. 85,108/- by merely staling that the duty chargeable is at the rate of 45% + 45% + Free and has given an arithmetical calculation of arriving at the quantum of differential duty demanded. The respondent in their reply to the said memorandum by their letter dated October 5,1988 have resisted the demand and has clearly stated:

As the Show Cause Notice does not state as to how and why the goods should be assessed at 45% + 45% + Free the same is not maintainable as unsubstantiated. Therefore the same needs to be withdrawn and hence may be dropped.

Even after the receipt of this reply the authorities chose to remain quiet and have not informed the appellant as to the basis on which the differential duly had been demanded. Not having done so it has to be held that no proper show cause notice was issued and the duty demanded has to be held as not maintainable in law. As it is, it is only in the order of the original authority, which according to the learned Advocate was received only on 25.6.1992, the basis for demand for duly has been spell out. Even if this order is taken to be a show cause notice, the demand would be time barred. I agree with my learned brother that the order of the Collector (Appeals) has to be upheld and the appeal dismissed.

(Pronounced in open Court)

Sd/- (V.P. Gulati)

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