FENNER INDIA LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) In the instant appeal the appellants have challenged the Order -in -Appeal passed by the Commissioner (Appeals) whereunder the order passed by the Assistant Commissioner was confirmed. The Assistant Commissioner confirmed the demand of Rs. 62,61,218.76 and imposed a penalty of Rs. 1,00,000 referring to Order -in -Original No. 65/87 dated 21.9.87 of the Commissioner of Central Excise, Madurai read with Madurai II Division Assistant Commissioner's letter C No. V/59/3/36/87 -cell dated 25.11.87.

(2.) The Assistant Commissioner passed the order titled as "speaking order" confirming duty and imposing penalty consequent to the provisions contained in Section 110 of Finance Act, 2000. The said section validates the action taken during the period from 17.11.80 till the enactment of Finance Act, 2000 (12.5.2000). The said Section 110 of Finance Act, 2000 was introduced so as to enable the recovery of any duty short levied/non -levied etc. for the past period from the date of issue of show cause notice in accordance with limitations set out is Section 11A of the Act. This was done to overcome the rulings of the Supreme Court wherein it was held that the change in classification can be only prospective and cannot be applied for the past period (6 months or 5 years as the case may be in terms of provisions contended in Section 11A).

(3.) The main facts need to be recalled. The appellants claimed classification of "Carcass" under heading No. 54.08. The classification was held by the departmental authorities under heading No. 59.09. CEGAT vide their order dated 15.1.97 upheld the classification under heading No. 59.09, but confined the duty demand to the period of only 6 months backwards from the date of show cause notice and the demand beyond the period was set aside. The penalty was consequently reduced from Rs. 1,00,000 to Rs. 50,000. On appeal to the Supreme Court, the Hon'ble Supreme Court, following the judgment of the Constitution Bench in the Cotspun case -2000 (69) ECC 451 (SC) : 1999 (113) ELT 363 (SC) set aside the CEGAT order. The Supreme Court order on the subject has therefore become final. However, as mentioned earlier, the lower authorities have reopened the demand by seeking support from Section 110 of the Finance Act, 2000.