GARWARE NYLONS LTD Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) THE stay application has been filed for the waiver of the pre -deposit of an amount of Rs. 7,23,820/ - demanded from the applicants herein by the Assistant Collector of Central Excise, Pune II vide order dated 8 -3 -1989 as confirmed by the order of the Collector of Customs (Appeals), Bombay dated 4 -5 -1990. The facts, in brief, of the case are as follows:

(2.) THE appellant imported PTA which was warehoused in the private bonded warehouse located in their factory. The appellant effected certain clearances in the month of October and paid duty at the exempted rate which was prevalent upto 30 -9 -1985. However, on this date a Notification had been issued enhancing the rate of duty from 100% to 150%. Accordingly, the Inspector incharge of the factory wrote a letter to them on 27 -12 -1985 that they have to pay the differential duty in respect of clearance from 30 -9 -1985 onwards. In their reply to the Inspector, the appellant drew attention to the decision of the Madras High Court in the case of Asia Tobacco Co. Ltd. to the effect that the effective date for any change in customs duty is the date of publication of such notification in the official gazette and not the date appearing on the Notification. The appellant, further, informed that they had written a letter to the Controller of Publications on 8 -10 -1985 and the latter had informed them vide his letter dated 2 -1 -1986 that the date of publication of this Notification No. 304/85 dated 30 -9 -1985 was 1 -11 -1985. The appellant, therefore, informed that they are liable for payment of differential duty from 1 -11 -1985 onwards only and not prior to this date i.e. from 30 -9 -1985 to 31 -10 -1985. Subsequently, a show cause notice was issued on 16 -9 -1988 and which was adjudicated by the aforesaid order confirming the demand of duty.

(3.) THE appeal against the Assistant Collector's order was also rejected. The Collector (Appeals) observed after ascertaining the factual position from the jurisdictional Collectors that the decision of the Madras High Court in the case of M/s. Asia Tobacco Co. Ltd. relied upon by the appellant had been taken up by the Department in SLP before the Supreme Court and that the other judgment of the Bombay High Court [GTC Industries v. Union of India dt. 4 -11 -1987 - [1988 (33) E.L.T. 83 (Bom.) relied upon had been stayed by the Division Bench of the Bombay High Court vide their order dated 7 -3 -1988 in the Notice of Motion No. 44/88 in Appeal No. 302/1988 in W.P. No. 2413/1985. The Collector (Appeals) found that the letter of the Inspector dated 27 -12 -1985 had all the ingredients of a notice of demand. He observed further "In fact, the appellant was aware of his additional duty liability much earlier than the Inspector since as early as on 8 -10 -1985 i.e. within eight days of the issue of the Notification he got in touch with the Director of Publication for ascertaining the date of publication." The Collector (Appeals) rejected the contention that the Inspector of Central Excise is not competent to issue show cause notice demanding differential duty under Sec. 28 of the Customs Act, 1962 by pointing out that since in this case the bond officer is an Inspector, he is competent to demand duty and that he is only debarred from confirming these amounts or adjudicating the offence cases.