ORDER
G. Sankaran, Senior Vice-President
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1. This order disposes of a batch of 10 appeals and two cross objections of these, 9 appeals and one cross objection are by M/s. Knit Foulds Private Ltd. (herein – after referred to as the assessee) and the remaining appeal by the Revenue. All these matters have arisen out of the Order-in-Appeal Nos. 41 to 54 CE/CHG/81/84 dated 14.2.84 passed by the Collector of Central Excise (Appeals) Delhi.
2. By the impugned order, the Collector (Appeals) disposed of three issues :
(i) Whether the product “Nylon Rubber Transmission Belting” manufactured, by the assessee falls for classification as Rubber Products under Item 16A or the Central Excise Tariff Schedule (CET, for short); or under the residuary Item 68.
(ii) If the goods fall under Item 16A, whether the assessee is entitled to exemption under Ntfn. 71/78 by virtue of the fact that the clearances of the said product under Item 16A did not exceed Rs.5 lakhs and the clearances of all excisable goods not exempted were less than Rs.20 lakhs but including the clearances of exempted excisable goods, the value of clearances exceeded Rs.20 lakhs. In other words, the question for determination is whether the clearances of exempted goods is to be taken into account to compute the value limit of Rs.20 lakhs for clearances of all excisable goods;
(iii) Whether the demand of Rs. 1,58,484.25 for the period 1.4.79 to 4.6.80 is hit by limitation of six months specified in Central Excise Rule 10 (as it existed at the material time) inasmuch as the show cause notice was served on the appellants on 11.9.80.
3. On the first issue, the Collector held that the T.R. Beltings correctly fell for classification under Item 16A (4) CET. On the second issue, the Collector said that he had already found against the assessee in his Order-in-Appeal dated 21.3.81. On the last issue, the Collector held that the demand for duty was enforceable only for the normal period of limitation of six months.
4. Though the Collector (Appeals) disposed of 14 appeals, his order is being challenged before us in only 9 matters. What is under challenge is the Order-in-Appeal in so far as it pertains to the Asst. Collector’s orders dated 16.7.81 and 11.7.83 and the Superintendent’s orders of assessment on the RT 12 Returns for August, September, October, November and December 1980 and February and March 1981. The Superintendent’s orders on these assessment returns are the subject of the seven appeals Nos. 980 to 986/84-D. Appeal No. 866/84-D arises out of the Asstt. Collector’s order dated 16.7.81 on the classification list. Against this very order, the Department has filed an appeal No. 873/84-D. The ninth appeal No. 867/84-D is by the assesssee and this arises out of the Asstt. Collector’s order dated 11.7.83.
5. Since the issue of classification of the goods is basic to the resolution of the disputes before us, we shall take it up first.
6. Appeal No. 866/84-D and CO. 340/84-D. – M/s. Knit-Foulds Private Ltd. is engaged in the manufacture of Nylon Transmission Conveyor and Elevator Belts (hereinafter referred to as ‘T.R. Belts’) from cloth, plastic strip, synthetic rubber and adhesive solutions. The Asstt. Collector, in her Order No. 17/Val/81 dated 30.4.81 held the T.R. Belts to be classifiable under Item 16A(4), C.E.T., rejecting the assessee’s claim for classification under Item 68 C.E.T. She also rejected the assessee’s claim for the benefit of duty exemption in respect of these goods under Central Excise Notification 80/80 dated 19.6.80 on the ground that the value of clearances of all excisable goods (under Items 16A and 68 C.E.T.) had exceeded the prescribed limit of Rs. 20 lakhs during the year 1979-80. The matter was carried in appeal by the assessee. The Collector (Appeals) in his Order No. 96/CE/CHG/83, dated 30.12.82 observed with respect to the assessee’s contention that the rubber content was lower than the Nylon content and that, therefore, the T.R. Belts would not fall under Item 16A, that this plea had not been taken before the Asstt. Collector. He, however, observed :
“All the same it is relevant to the issue of classifying the commodity. In the circumstances, I remand the case for determining whether rubber content used in the product is the predominant material or not. This can be tested by sending a sample to the chemical examiner for analysis. Since the question of availment of notification 80/80 is dependent upon the classification of the product, no views are expressed on it.”
The Asstt. Collector (not the Asstt. Collector who passed the order dated 30.4.81) in due course, passed an order dated 11.7.83 in the remand proceedings. In this order, the Assistant Collector noted that the concerned Superintendent was directed to draw a sample of the goods and get it tested by the chemical examiner but the Superintendent had reported that there was no stock of T.R.Belting with the assessee nor did it intend to manufacture T.R. Belting in the near future, so no sample could be drawn. However, on a sample drawn on 19.12.75 which was sent to the Chemical Examiner, he had reported that:
“The sample is a piece of green coloured belting containing more than 25% by weight of rubber compound. The rubber contents present in the sample is (sic) vulcanised.”
It is seen from the order that the assessee produced a sample from the products manufactured by them earlier but it does not say what was done with the sample, whether it was an authentic sample, and if so, why it was not sent for test in the manner directed by the Collector (Appeals). The Assistant Collector further observed.
“Further it is clear from the Tariff description that there is no question of predominance of the rubber compound or rubber content for the classification of rubber products because it is nowhere mentioned up (sic) Tariff description that the rubber contents should predominate. It is therefore immaterial whether the rubber content predominates or not. The deciding factor, therefore, is only the presence of vulcanised rubber which is present in the product under examn”.
On this basis, the Asstt. Collector held the Beltings to fall under Item 16A(4) C.E.T. and ruled out duty exemption under Notification 80/80 since the clearance value of the goods under Item 16A(4) and 68 CET had exceeded the prescribed limit of Rs. 20 lakhs during the year 1979-80. This order was also carried in appeal which was disposed of, among other matters, by the Collector (Appeals) by the impugned order dated 14.2.84. Referring to the assessee’s contention that the Assistant Collector was bound to get the sample tested in accordance with the order of remand, the Collector (Appeals) observed as follows:
“It should be noted here that the purpose of remanding the case was to test the factual contention of the appellant and also to get the view of the original authority on the new factual plea. The said order-in-appeal had not given any finding that ‘the predominance of material’ is decisive of the issue; what it all said that (sic) it was a relevant plea.”
“In view of the available facts, it is no longer possible to test the factual contention of the appellant that “Nylon” predominates “Rubber” content. This plea is, therefore, not tenable at this stage of the case. Further, I feel now on careful consideration that so far as ‘rubber products’ are concerned, this test is not necessary either. ‘Rubber products’ in a commercial sense are those articles in which rubber is an essential ingredient because of the peculiar qualities such as elasticity of rubber as a material. In that view, the product of the appellant is a rubber product. The qualities of ageing and elasticity – so essential for Transmission Belting – are provided by vulcanised rubber and not Nylon.”
On this basis and for the other considerations set out in the order, the Collector (Appeals) confirmed the classification of the goods under Item 16A CET. It is seen from the order that during the course of hearing, the Counsel for the assessee had stated that an old sample was available which could be sent for testing.
7. During the hearing before us, Shri V.K. Agarwal, Counsel for the assessee strongly urged that the Assistant Collector had, in the remand proceedings, acted outside the parameters set by the order of remand in that he did not send a sample for test and, on the other hand, had held that the test of predominance was irrelevant though the Collector (Appeals) had held that this test was relevant. The Collector (Appeals) also fell in error in changing his view on the point of the predominance test and going back on his earlier view. He was also in error in upholding the Asstt. Collector’s order which was contrary to the remand order. In his reply, Shri L.C. Chakraborty, Departmental Representative, for the respondent-Collector, stated, in response to a query from the Bench as to whether the Department could have filed an appeal against the order of remand by the Collector (Appeals), that since the remand order was not a final order, no appeal could have been filed. In this connection, he referred to the Tribunal’s decision in Emery (India) Private Ltd., Jamnagar v. Collector of Central Excise, Bombay 1986 (24) ELT 371. Shri Chakraborty further submitted that the action of the Collector (Appeals) in directing the Asstt. Collector to test the rubber content from the predominance angle without giving an opportunity to the Department was not correct. However, he fairly conceded that the Asstt. Collector should not have, in his order, observed that the predominance test was not relevant but that would not make the order void.
8. We have considered the submissions of both sides. In the case of Emery (India) Private Ltd. (supra), the Tribunal had held that if an appeal was decided wholly in favour of the appellant, there was neither a right of further appeal nor survival of an appeal previously filed in relation to any particular issue that may have arisen earlier notwithstanding the fact that it had been left undecided. In the present case, the Collector (Appeals), by his first order, had directed the Asstt. Collector to test the sample of the goods for ascertaining whether the rubber content was predominant. The Collector (Appeals) has observed in the impugned order that he had not given any finding that the predominance test was decisive but had only stated that it was a relevant plea. It is true that the Collector had not said that the test was decisive. But, we find in the Order-in-Appeal dated 21.3.83 that the Collector (Appeals) had specifically recorded with reference to the assessee’s contention regarding the predominance test that the contention was relevant to the issue of classifying the commodity. It is only because of this that the Collector (Appeals) had remanded the case to the Asstt. Collector for determination whether the rubber content used in the product was predominant or, not. This is also borne out by the further observation of the Collector (Appeals) that he was not expressing any views on the availment of Notification 80/80 because that question was dependent upon the classification of the product. In other words, that question would depend on whether the goods fell under Item 16A or not. We do not see the relevance of the Tribunal decision in the case of Emery (India) Pvt. Ltd. (supra) to the facts of the present case, the Collector (Appeals)’s order dated 21.3.83 was certainly an order passed by him under Section 35A of the Central Excises & Salt Act and if the Revenue was aggrieved by that order, it was open to it to have filed an appeal against the order to the Tribunal in terms of Sub-section(2) of Section 35B of the Act. No such appeal having been filed by the Collector, and no appeal having been filed also by the assessee, that order became final as between the Revenue and the assessee.
9. The question arises whether it was open to the Asstt. Collector to act in the matter beyond the paramaters set by the Collector (Appeals) in his remand order and further whether the Collector (Appeals) was correct in holding, in the impugned order, that his earlier views on the test of predominance were not relevant and, on that basis, upholding the Asstt. Collector’s order. In this context, there are a few authorities which are relevant.
One is Bhopal Sugar Industries Ltd. v. Income Tax Officer, Bhopal (1960) 40 ITR 618. In this case, the facts were that the Appellate Tribunal had directed the Income Tax Officer to ascertain the average transport charges per maund of sugarcane from the purchasing centres to the assessee’s factory and add it to the rate of Rs. 1-4-6 per maund in order to ascertain the market value and give any relief that may be due to the assessee. An application under Section 66(1) of the Income Tax Act for reference was made by the Revenue but it was withdrawn and the order of the Tribunal became final. The Income Tax Officer, however, misread the clear direction of the Tribunal that he had to ascertain the cost of transportation from the farms to the factory instead of from the purchasing centres to the factory. When the matter went before the Judicial Commissioner, Bhopal, he found that the Income Tax Officer had acted arbitrarily and in clear violation of the Tribunal’s directions but proceeded to consider the correctness of the Tribunal’s order and held that there was no manifest injustice done to the assessee. The Supreme Court held that when an inferior Tribunal (the ITO) virtually refused to carry out the directions which a superior Tribunal had given in exercise of its appellate powers in respect of an order of assessment made by the Income Tax Officer, such refusal was in denial of justice. The order of the Appellate Tribunal having become final, it was not open to the Judicial Commissioner to hold that the order was wrong as the Income Tax Officer had failed to carry out a legal duty imposed on him and such failure was destructive of a basic principle of justice.
10. The present case, though not similar in all respects, bears a close similarity to the case of Bhopal Sugar Industries Ltd. The Collector (Appeals) had directed the Asstt. Collector to send a sample for test of the rubber content since the test of predominance was relevant. The test was not carried out apparently because no sample was available with the Department. However, as the Assistant Collector’s order itself shows, the assessee produced a sample which the Assistant Collector does not touch upon in his order. If that sample was considered not authentic, he should have said so. If, however, it was authentic, then it should have been sent for test in accordance with the direction of the Collector (Appeals). Further, when the Collector(Appeals) had stated that the test was necessary because the test of predominance was relevant it was not open to the Asstt. Collector to say in his re-adjudication order that, in his view, the test of predominance was not at all relevant to the construction of the Tariff Item. He clearly acted beyond and outside the mandate given to him by the Collector (Appeals). The Collector (Appeals), on his part, had also fallen into in error in upholding the Asstt. Collector’s order which, as just seen, was beyond jurisdiction. The Collector (Appeals) further fell into error when he revised his views and held that the test of predominance was not relevant, considering that the facts and the available evidence had not changed between his first order and second order.
11. There is another decision which is also of relevance. This is a judgment of the Andhra Pradesh High Court in the case of N. Nagendra Rao & Co. v. State of Andhra Pradesh (1978) 42 STC 194. In that case the Sales Tax Appellate Tribunal, without going into the merits of an appeal filed by an assessee, remanded the matter to the Assistant Commissioner with a direction that he should call for a report of the Commercial Tax Officer, but the Assistant Commissioner, on remand, dismissed the appeal without obtaining the report of the Commiercial Tax Officer. The assessee again filed an appeal to the Tribunal which was heard by a Bench different from the first Bench. It observed that no useful purpose would be served by calling for the report of the Commercial Tax Officer as the relevant material was available on record and dismissed the appeal. The High Court held, following the Supreme Court’s decision in the case of Bhopal Sugar Industries Ltd. (supra), that when a competent appellate forum remands a case back to its lower authority with certain directions, those directions have to be complied with. It might be that, in the view of the subsequent Bench of the Tribunal, the report called by the previous Bench was not really necessary. Section 21(9) of the Andhra Pradesh General Sales Tax Act lays down that “every order passed by the Appellate Tribunal under Sub-section (4) shall, subject to the provisions of Section 22, be final”. The order of remand passed by the first Bench was final so far as the Tribunal was concerned. The Court, therefore, held that the second Bench of the Tribunal was in error in observing that no useful purpose would be served by calling for the report which the earlier Bench felt was necessary, and disposing of the matter on the ground that there was ample material on record.
12. The facts of the present case have a close similarity to those of the case before the Andhra Pradesh High Court. The only significant difference is that, in the present case, it is the very same Collector (Appeals) who passed the order of remand as well as the imp ugned order, and not the Tribunal. That, however, would not, in our opinion, make any difference as to the applicability of the ratio of the High Court decision to the present case because the order of remand passed by the Collector (Appeals) was appealable to the Tribunal by both parties and no such appeal having been filed, that order had become final.
13. The above view gains support also from the Supreme Court judgment in Nainsingh v. Koonwarjee and Ors. AIR 1970 SC 997. Para 4 of the judgment is relevant and reads as follows :
“The High Court, in our opinion, erred in holding that the correctness of the remand order was open to review by it. The order in question was made under Rule 23, Order 41, Civil Procedure Code. That order was appealable under Order 43 of that Code. As the same was not appealed against, its correctness was no more open to examination in view of Section 105(2) of the Code which lays down that where any party aggrieved by an order of remand from which an appeal lies does not appeal therefrom he shall thereafter be precluded from disputing its correctness. The High Court has misconceived the scope of its inherent powers. Under the inherent power of Courts recognised by Section 151, C.P.C., a Court has no power to do that which is prohibited by the Code. Inherent jurisdiction of the Court must be exercised subject to the rule that if the Code does contain specific provisions which would meet the necessities of the case, such provisions should be followed and inherent jurisdiction should not be invoked. In other words the Court cannot make use of the special provisions of Section 151 of the Code where a party had his remedy provided elsewhere in the Code and he neglected to avail himself of the same. Further the power under Section 151 of the Code cannot be exercised as an appellate power.”
14. In the above view of the matter, the impugned order insofar as it concerns the classification of the goods cannot be upheld. The matter must go back to the Asstt. Collector who will proceed to have the sample of the goods produced before him in the remand proceedings tested. If, however, at this distant date, no sample is available either with the Department or with the assessee, the Asstt. Collector shall proceed to ascertain the percentage of rubber content from any other evidence such as raw material accounts etc. which the assessee might produce and the Asstt. Collector might admit. It is also possible that the Chemist who tested the sample of 19.12.75 would have recorded the actual percentage of rubber in the sample, in his test note book.
In this connection, we must also note that the test of predominance was relevant as held by the Collector (Appeals) in his order of remand. This is borne out by the fact that as early as 23.12.74, by Notification 18/74, the Central Government had exempted Rubber Products, falling under sub-items (3) and (4) of Item 16A C.E.T. (which would include T.R.Beltings), the Rubber Compound content of which was less than 25% by weight, from the whole of the excise duty leviable thereon. The Explanation to the notification provides that in calculating the percentage of rubber compound contents, the weight of canvas, yarn, metallic wires, washers, rivets and the like which form integral part or ingredient of such rubber products, shall be taken into account but the weight of metallic fitments and surface finishing, necessary to make the belting and tubing suitable for particular end-uses, shall be ignored It is obvious that the Chemical Examiner tested sample from the point of view of this notfn. Otherwise, there is no explanation as to why he reported that the sample contained more than 25% by weight of Rubber Compound.
15. Though the Counsel had submitted that the matters may, if necessary, be remanded to the Asstt. Collector for determination of the predominance or otherwise of the rubber content in the T.R. Beltings, he had also submitted that the issue stood concluded in the assessees’ favour by the Supreme Court’s judgment in Geep Flashlight Industries Ltd. v. Union of India and Ors. 1985 (22) ELT 3 (SC). In that case, the Supreme Court had held that, for an article to be called “an article of plastics”, it must be comprised wholly of plastics. Similarly, so ran the argument, the T.R.Beltings in question being not wholly comprised of Rubber, they would not be “rubber products” within the meaning of Item 16A(4) CET. If this contention is correct, and upheld, then the exercise of remanding these matters to the lower authority would be an exercise in futility. It is, therefore, necessary to examine this contention notwithstanding the position that since the Asstt. Collector did not comply with the remand directions of the Collector (Appeals), the matters must go back to the Asstt. Collector. The Departmental Representative’s reply to this contention is that the facts of the present dispute are distinguishable from those in the Geep Flashlight case before the Supreme Court. In that case, Item 15A(2) of the CET read as “articles made of plastics, all sorts,…..”. In the present case, Item 16A read as ‘Rubber products, the following, namely – “The concept of predominance is not, therefore, relevant.
16. In the Geep Flashlight case, the goods were described as plastic torches. The torch consisted of a body made of plastics with certain metal parts together with reflector and glass as its components. Item 15A(2) CET under which classification was sought by the petitioner read as follows :
“Articles made of plastics, all sorts, including tubes, rods, sheets, foils, sticks, other rectangular or profile shape, whether laminated or not, and whether rigid or flexible, including layflat tubings, and polyvinyl chloride sheets…”.
The contention for the petitioners was that plastic torch was nothing but a tube made of plastics in which certain other devices were inserted so as to make it a torch but had nonetheless retained the character of a plastic tube. The Court observed that, having regard to the language of Item 15A(2), it would be doing violence if one were to include plastic torches in the category of articles covered by that item. Articles such as tubes, rods, sheets, foils sticks etc. of plastic material merely describe plastic material in different shapes and forms and each word used therein takes its colour from the word just preceding and just succeeding and the adjectival clause ‘articles made of plastics’. By no stretch of construction, plastic torch can be read in conjunction with plastic tubes, sheets, foils etc. made of plastics. Plastic torch is a distinct and different commodity known in the market as torch. Ordinarily, torch is not described by the name of the material used in the tube and is not sold as plastic-tube. It is in this context that the Supreme Court observed that articles made of plastics mean articles made wholly of the commodity commercially known as plastics and not articles made from plastics along with other materials. We may now consider whether the ratio of this judgment has application to the facts of the present case. Item 16A, CET, read as follows :
“16A. Rubber products, the following, namely:
(1) Latex foam sponge ;
(2) Plates, sheets and strips uphardened, whether vulcanised or not, and whether combined with any textile material or otherwise ;
(3) Piping and tubing of unhardened vulcanised rubber ;
(4) Transmission, conveyor or elevator belts or belting, of vulcanised rubber.”
We are concerned here with sub-item(4). There is no dispute that the present goods are known as Transmission or elevator belts or belting. This fact is not denied in the orders of the lower authorities. They are, therefore, covered by the specific description in sub-item(4) of Item 16A CET. The question is whether the words ‘of vulcanised rubber’, should be construed to mean made wholly of vulcanised rubber. A factor to be kept in mind is that, unlike in the plastic torch case, the present goods are known as transmission or elevator belts or belting.
Further, sub-item(2) specifically covers plates, sheets and strips, whether combined with any textile material or otherwise. No similar words are to be found in Item 15A(2). Though we are conscious of the position that the words in 16A(2) should not be the basis for interpretation of the words in 16A(4), it cannot be overlooked that though the main heading is ‘Rubber Products’, the description of sub-item (2) takes within its ambit not only articles made wholly of rubber. The Collector (Appeals) was, in our opinion, therefore, right in concluding in his first order that the test of predominance was relevant. Whether it is decisive or not, we would leave to the Asstt. Collector who will be adjudicating the matter on remand.
17. In the light of the above discussion, we are of the opinion that the ratio of the Supreme Court’s judgment in the Geep Flashlight case (supra) does not apply to the facts of the present case. We remand the matter to the Asstt. Collector for de novo determination in the light of the above observations and directions. This order disposes of CO. No. 340/84 also.
18. Appeal No. 867/84-D. The impugned order upholds the demand for duty but limits it to a period of six months preceding the date of issue of the show cause notice. The contention for the assesseee is that the demand having been made under Central Excise Rule 10, the proceedings initiated by the notice could not continue after the deletion of the rule. The Counsel, however, fairly stated that the Tribunal decision on this point contained in its order in the case of Atma Steels Pvt. Ltd. and Ors. v. Collector of Central Excise, Chandigarh and Ors. 1984 (17) ELT 331 holding that proceedings initiated with reference to a rule or provision validly subsisting at the time of initiation of proceedings can continue in spite of repeal or substitution of the original provision, was against the assessee. The Counsel, therefore, while pressing the contention, did not make any submissions. In view of the principle enunciated in the Atma Steels case, we see no merit in this contention.
19. The next contention taken on behalf of the assessee is that, for the purpose of computing the aggregate clearance limit of Rs. 20 lakhs for determining the eligibility of the assessee to duty exemption, the value of clearances of exempted goods should not be taken into account. In this connection, a few authorities to the effect that goods, exempted by a Rule 8(1) notification, ceased to be excisable goods, were cited. The Patna High Court judgment in Shree Madhav Mills Pvt. Ltd. v. Collector of Central Excise 1984 (17) ELT 310 was relied upon to support the contention that the expression “all excisable goods cleared” would mean those excisable goods on which excise duty is payable and has been paid. It was urged that since there was no contrary judgment, this judgment should be followed. However, as correctly pointed out by the Departmental Representative, the Patna High Court judgment and several other authorities have been referred to, and discussed, in the Tribunal’s decision in the case of Coaltar Chemicals Manufacturing Co. v. Collector of Central Excise, Baroda, 1987 (32) ELT 602 and the Tribunal has come to the conclusion that excisable goods do not cease to be excisable goods when exempted from duty by a Rule 8(1) notification and further that the value of clearances of such exempted excisable goods should be taken into account in computing the value of aggregate clearances for the purpose of determining the eligibility of a manufacturer to the small scale exemption. Therefore, this contention of the Counsel is also rejected.
20. Appeal No. 873/84-D & Cross Objection 41.1/84-D. The Collector contends that the Collector (Appeals) was not correct in setting aside the demand for the period beyond six months from the date of the show cause notice. It is contended that there was material suppression on the part of the assessee with a view to evade duty due.
21. In our opinion, the Collector’s order correctly sets out the reasons why the extended period of limitation of five years would not apply to the facts and circumstances of the present case. We are satisfied that his finding that the normal period of six months alone would apply in the present case is correct. We reject the Collector’s contention in this behalf.
22. The cross objection seeks the only relief that the Collector’s appeal be dismissed. We have dismissed the Collector’s appeal. The “cross objection” thus stands disposed of.
23. Appeal Nos. 980 to 986/84-D. These appeals are, as noted earlier, against the Superintendent’s orders of assessment on the RT 12 Returns themselves for 7 months. The Counsel submitted with reference to these appeals that no show cause notices had been issued under Section 11A of the Central Excises & Salt Act in respect of demands for duty covered by these appeals. All demands for duty must be preceded by the issue of a show cause notice followed by appropriate adjudication proceedings. It was further contended that there was no dispute in respect of these assessment Returns about the classification of T.R. Beltings. Classification List No. 1/RP/KPT/80, dated 20.6.80 showed the classification of T.R. Beltings as under Item 16A(4) CET. The Superintendent’s order on the RT 12 Returns was dated 31.8.1981. In any event, therefore, the said order resulting in creation of demand was time barred except with reference to the RT 12 Return for the month of March, 1981. Though, at some stage in the arguments, the Counsel stated that the clearances had been effected on payment of duty and with reference to the dates of payment of duty, the demands were barred by limitation, he admitted, on closer scrutiny of the RT 12 Returns, that the goods had been cleared without payment of duty on execution of a B-13 Bond. His contention was that, even so, a show-cause notice was required.
24. The Departmental Representative, replying to the above contentions, referred to the decision of this Tribunal in the case of Siemens (India) Ltd. v. Collector of Central Excise, Thane 1986 (25) ELT 821. In that case, the Tribunal held that there were two limitations – one commencing from the date of payment of duty by debit entry in the Personal Ledger Account by the assessce on self-assessment at the time of removal of the goods and the second limitation commencing from the date of adjustment (if any) of the Personal Ledger Account consequent on the receipt of a copy of the RT 12 Return with the assessement memorandum completed by the proper officer. The second limitation is strictly limited to the additional duty, if any, found as a result of the direction in the assessment memorandum.
25. The Departmental Representative then contended that Section 11A of the Act was not applicable to the present case. These matters would be covered by Rule 9B which enjoins upon the assessee to pay up the difference in duty following the final assessment. Rule 9B is a self-contained code and does not stipulate issuance of a show show cause notice for demanding duty consequent on finalisation of the provisional assessment. Section 11A notice requirement would come in from the date of final adjustment of duty if a cause for demanding further duty arises. The present case is one covered by Rule 173-1 because, at the material time, the classification was not in dispute and no appeal had been filed and the final adjustment of duty had not taken place.
26. Since we are remanding the main issue of classification to the Asstt. Collector, we would not like to express any opinion on the aforesaid contentions since they were apparently, not raised before the lower authorities. The Asstt. Collector will give an opportunity to both sides for putting forth their respective cases before arriving at his decision.
27. In the result, the appeals and cross objections stand disposed of in the above terms.
