RAINBOW INDUSTRIES Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THE short question of law that arises for consideration in this appeal directed against the judgment and order of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi, is whether the classification and the price list accepted by the Department and acted upon, found subsequently to be erroneous, is to be applied prospectively or retrospectively.

(2.) THE appellant, a manufacturer of dyestuff, filed a price list in Part IV pro forma as applicable for sales to related persons. The price list showed various includible and excludable expenses as well as assessable value as claimed by the appellant. This was approved by the Department on 6.12.1975 and the assessable value as declared was accepted. The approval was to be effective from 1.10.1975. After nearly a year the Assistant Collector issued a show -cause notice requiring the appellant to show cause as to why the net assessable value as per the method shown in the annexure should not be revised and differential duty recovered from the appellant. The reply of the appellant was not accepted either by the Assistant Collector or by the Appellate Collector or the Tribunal. In fact before the Tribunal it was conceded on behalf of the appellant that the method for determining the assessable value in the price list submitted by the appellant was not correct.

(3.) SINCE the appellant did not dispute that the method of calculation 0 l' the duty by the Department was correct, the submission of the learned counsel on lack of jurisdiction to initiate proceedings is not necessary to be decided as the power to issue show -cause notice even if the duty was short -levied as a result of erroneous application of law. However, once the Department accepted the price list, acted upon it and the goods were cleared with the knowledge of the Department, then in absence of any amendment in law or judicial pronouncement the reclassification should be effective from the date the Department issued the show -cause notice. The reason for it is clearance with the knowledge of the Department and no intention to evade payment of duty.