REICHHOLD CHEMICALS LIMITED Vs. GOVERNMENT OF INDIA

JUDGEMENT

(1.) THE petitioner is a Company manufacturing various chemical products such as Super Beckamine, Beckamine etc. This is done after taking out a licence from the Central Excise department. During the earlier part of 1967, the petitioner was removing these products declaring them as 'Alkyed resins' and claiming exemption from duty in terms of Notification No. 156 of 1965, dated 23-9-1965. After consideration of the facts and circumstances of the case, including the chemical composition of the products, the third respondent (Assistant Collector of Central Excise) passed an order dated 16-8-1968, holding that the products manufactured by the petitioner are only

(2.) THE petitioner filed an appeal before the Appellate Collector of Central Excise, Madras, the second respondent herein. THE Appellate Collector by his order dated 10-9-1975 allowed the appeal on the ground that 'alkyed resins' included modified alkyed resins. In exercise of the powers conferred in them under Section 36(2) of the Central Excises And Salt Act, 1944 (hereinafter referred to as the 'Act') the Government of India issued a show cause notice dated 31-8-1976, to the petitioner proposing to review the decision of the Appellate Collector. THE petitioner sent a reply dated 29-9-1976. As desired by them, personal hearing was granted on 29-1-1977 at Madras. Having regard to all the submissions made by the petitioner the Government of India passed an order on 31-8-1976 setting aside the order-in- appeal passed by the Appellate Collector of Central Excise, Madras, on appeal and holding that the products of the petitioner were not eligible for the benefit of exemption envisaged by the Notification No. 156 of 1965, and that they are correctly assessable under Item No. 15A(i) of the Central Excise Tariff.

(3.) THE second argument, is that originally by order dated 16-12-1967, the petitioner was unable to clear the goods free of duty when it was held that the Notification No. 156 of 1965 would apply. However, on 5-4-1968, the very authority, namely, the Assistant Collector proposes to revise the same and raises a demand disregarding the exemption. THE Government of India when it says that the order of the Assistant Collector is restored, should have specifically stated as to from what date the liability of the petitioner to excise duty would arise. THErefore, in any event, between 16-12-1967 and 5-4-1968, there cannot be a demand of excise duty at all.