PRECISION RUBBER INDUSTRIES Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) The Petitioners are manufacturers of rubber products known as "aprons" and "cots", components of textile machinery. The Respondent No.2 and the Respondent No. 1 are, respectively, the Assistant Collector of Central Excise, Thane Division I, and the Collector of Central Excise, Bombay-III, who perform the duties under the Central Excises and Salt Act, 1944, and the Rules made thereunder. The Petitioners impugn the validity of two Orders :

(2.) The facts out of which this petition arises are briefly as under:

(3.) On 7th October 1985, the Respondent No.1 set aside the Order of the Respondent No.2 dated 21st May 1981 and held that aprons and cots manufactured by the Petitioners are liable to excise duty under the residual Tariff Item No.68 and were not exempt under Notification .197/67. This is the first Order impugned by the Petitioners. The Order of the Assistant Collector dated 21st May 1981 which was initially "stayed" by the notice dated 30th September 1981 was set aside by the Respondent No.1 on 7th October 1985. Therefore, the Superintendent of Central Excise, Thane, by his notice dated 20th February 1986 demanded from the Petitioners excise duty of Rs.42,88,131.20 for the period from April 1980 to October 1985. When the Petitioners pointed out to the Respondent No. 1 that no demand could be made without complying with Section 11A of the Act, the Respondent No.1 issued a show cause notice dated 4th July 1986. The procedure under Section 11A of the Act and Rule 9(2) of the Rules was followed. After hearing the petitioners, the Respondent No.1 made the Order of adjudication dated 28th September 1988 confirming the demand and imposing the penalty of ten lakh rupees. Against this Order, the petitioners filed an appeal before the Tribunal on 8th November, 1988. The Order dismissing the appeal is the second Order impugned by the Petitioners.