ORIENTAL METAL INDUSTRIES Vs. R B SAID

JUDGEMENT

(1.) The petitioners are a partnership firm and are manufacturing aluminium strips out of aluminium wire rods in coil purchased from the open market. The petitioners are required under Rule 173B of the Central Excise Rules, 1944 to submit their classification list from time to time. The classification lists were duly approved and the petitioners used to remove the goods under 'Self Removal Scheme'. The petitioners submitted monthly statements in Form RT-12 showing therein excisable goods manufactured and the said statements were duly scrutinised and accepted. On May 29, 1970, the Superintendent of Central Excise, Range No. III, Division V, Bombay, served show cause notice on the petitioners claiming that on verification of documents, it was found that the petitioners had cleared aluminium strips weighing 22,974.100 kg. from June 1, 1968 to December 31, 1969 and further quantities in subsequent period, on payment of duty at Rs. 500/- per metric tonne after setting off Rs. 950/- per metric tonne under Notification No. 140/68, dated July 6, 1968. The show cause notice claims that the petitioners are not entitled to the advantage of the Notification and the petitioners should appear before the Superintendent to show cause why proper duty should not be levied. The petitioners gave reply on June 8, 1970 and the petitioners were also heard by the Superintendent on August 10, 1970, but no order was passed by the Superintendent of Central Excise. On March 4, 1972, the corrigendum dated May 29, 1970 to the show cause notice was issued and the petitioners were called upon to show cause to the Assistant Collector, Central Excise, instead of Superintendent of Central Excise.

(2.) The petitioners appeared before the Assistant Collector and complained that the proceedings commenced by the Superintendent were over and the corrigendum cannot be issued fixing fresh hearing before the Assistant Collector. The petitioners also claimed that the goods were cleared on payment of proper duty. The petitioners further claimed that the show cause notice covering the period from June 1, 1968 to December 31, 1969 was invalid as levy of duty under Rule 10 read with Rule 173J of the Central Excise Rules cannot be for a period of more than one year prior to the date of the show cause notice. The Assistant Collector, by his order dated October 4, 1973 held that the product manufactured by the petitioners was aluminium strips and as it was not manufactured from aluminium in crude form, the petitioners were not entitled to the advantage of the exemption provided by the Notification dated July 6, 1968. The Assistant Collector did not accept the claim of the petitioners that the earlier notice stands exhausted and the corrigendum is invalid and held that the petitioners shall pay the amount of duty availed as set off, in respect of the clearances effected from May 1, 1969 to December 31, 1969 and further quantities in the subsequent period within ten days from the date of receipt of the modified demand. The petitioners carried appeal against this order before the Appellate Collector of Central Excise and the appeal was disposed of by order dated July 27, 1975. The Appellate Collector concurred with the conclusions reached by the Assistant Collector, but the order was modified only to the extent, that the demand was restricted for a period from May 28, 1969 onwards - instead of May 1, 1969 onwards. The modification was effected on the ground that the claim for a period of more than one year prior to the date of show cause notice was barred by limitation.

(3.) The petitioners feeling aggrieved by the Appellate Order, carried revision application before the Government of India, Ministry of Finance, but the revision was dismissed by an order dated July 1, 1978, except giving a direction to the Assistant Collector to recalculate the demand as the petitioners were claiming that certain quantity of aluminium strips was manufactured not from wire rods but from aluminium strips only, the certain other quantity was similarly converted on job work basis. The Assistant Collector was directed to recalculate after verifying and ascertaining the accuracy of the claim made by the petitioners. During the pendency of the revision application, the Government of India had also commenced suo moto proceedings under Sub-section (2) of Section 36 of the Central Excises and Salt Act, 1944, and on considering the reply of the petitioners, modified the order passed by the Appellate Collector to the extent that even the period from May 1, 1969 till May 28, 1969 was also held to be not hit by limitation, provided under Rule 10 read with Rule 173-J of the Excise Rules. The orders passed by the revisional authorities are under challenge in this petition filed under Article 226 of the Constitution of India.