Indo Sohottle Auto Parts Pvt. Ltd. vs The Union Of India (Uoi) And The ...
2003 Latest Caselaw 126 Bom

JUDGMENT

J.P. Devadhar, J.

1. Heard Counsel on both sides. Rule, returnable forthwith. Respondents waive service. By consent, the petition is taken up for final hearing.

2. In this petition, the Petitioners have challenged the order of CEGAT dated 2.11.2002 (Exhibit A12 to the petition) in so far as it seeks to confirm its earlier order dated 6th March, 2000 and hold that the reclassification of the goods manufactured by the Petitioners under Chapter Heading 8409 of Central Excise Tariff would be applicable from the date of show cause notice dated 23.10.1990. In this petition, the Petitioners do not dispute that the goods manufactured by them are classifiable under Chapter sub heading 8409. But, the grievance is that after the issuance of the show cause notice dated 23.10.1990 the Respondents have approved the classification of the goods manufactured by the Petitioners under Chapter sub heading 7318.90 of the Central Excise Tariff and, therefore, during the validity of those approved classification lists, the Tribunal could not have held that the reclassification of the goods manufactured by the Petitioners under Chapter sub heading 8409 would be effective from 23.10.1990.

3. The facts having hearing on the subject matter of the present petition are as follows:-

The Petitioners manufacture products like half collects for engine valves, dies, punches, etc. It is the case of the Petitioners that during the period 1987-88 they were themselves classifying these goods under Chapter sub heading 8409 of the Central Excise Tariff. However, at the instance of the Excise Authorities the Petitioners started classifying these goods under Chapter sub heading 7318 of Central Excise Tariff.

4. By a show cause notice dated 23.10.1990, the Excise Authorities called upon the Petitioners to show cause as to why the said goods should not be classified under Chapter sub heading 8400 of the Central Excise Tariff. In reply, vide letter dated 13.11.1990, the Petitioners informed the Excise Authorities that initially the Petitioners themselves were classifying the goods under Chapter 8409 and it is only at the instance of the Excise Authorities, they have started classifying the goods under Chapter sub heading 7318 of the Central Excise Tariff.

5. However, on adjudication, by an order dated 22.7.1991 (page 22 of the petition), the Assistant Collector of Central Excise, Pune held that the goods manufactured by the Petitioners are classifiable under Chapter sub heading 7318.90 and not under Chapter sub heading 8409 of the Central Excise Tariff. Being aggrieved by the aforesaid order, the Excise Authorities filed an appeal and the Collector of Central Excise & Customs (Appeals), Pune by his order dated 24.12.1993 (page 26 of the petition) confirmed the order of the Assistant Collector and dismissed the appeal of the revenue. Being aggrieved by the aforesaid order, the Commissioner of Central Excise filed further appeal before the CEGAT, New Delhi and the CEGAT by its order dated 6.3.2000 (see Page 34 of the petition) held that the goods manufactured by the Petitioners are classifiable under Chapter heading 8409 of the Central Excise Tariff and further held that in the light of the Judgment of the Apex Court in the case of Collector of Central Excise, Baroda v. Cotspun Limited the reclassification under Chapter sub heading 8409.00 shall be effective from 23.10.1990.

6. The Petitioners thereupon filed a rectification Application before the CEGAT contending that there was a mistake in the order dated 6.3.2000. According to them, the excise authorities had approved classification of their goods under Chapter sub heading 7318 even after 23.10.1990 and, therefore, the reclassification of the goods under 8409 could not be made applicable for the period during which the classification under 7318 remains approved. In other words, the contention was that, in view of subsequent approval of classification under 8409, the reclassification under 7318 could not be made applicable with retrospective effect. However, the CEGAT by its order dated 12th September, 2000 (page 36 of the petition) rejected the application filed by the Petitioners inter alia on the ground that in the memo of appeal, the Petitioners had not taken out this plea of approving classification under Chapter heading 7318 of the Central Excise Tariff after issuance of show cause notice dated 23.10.1990. Being aggrieved by the aforesaid order, the Petitioners filed Writ Petition bearing No. 6334 of 2000 in this Court and by Judgment and order dated 16th January, 2001 this Court set aside the order of the Tribunal dated 12.9.2000 inter alia on the ground that the Tribunal was in error in holding that the point was not taken in the memo of appeal because, the appeal was filed by the excise authorities and not by the Petitioners and hence the Petitioners taking up the point in the memo of appeal did not arise at all. Accordingly, this Court resorted the rectification application filed by the Petitioners to the file of CEGAT and directed the CEGAT, to hear and dispose of the rectification application in accordance with law. By the impugned order dated 2nd November, 2001 (page 61/A of the petition), the Tribunal held that there was no error in the order of the Tribunal dated 6.3.2000 and in the light of the decision of the Apex Court in the case of Cotspun Limited (Supra), reclassification of the goods have been rightly held to be effective from 23.10.1990. Challenging the said order of the Tribunal, the Petitioners have approached this Court by the present petition.

7. Mr. Anturkar, learned Counsel appearing on behalf of the Petitioners did not dispute that as per the order of the Tribunal dated 6th March, 2000 the goods are classifiable under Chapter sub heading 8409 of the Tariff. His only grievance was regarding the effective date or reclassifying the goods under Chapter sub heading 8409 of the Tariff. Mr. Anturkar drew our attention to the classification list approved by the Excise Authorities on 11.12.1991 (page 96 of the petition) and several other classification lists, wherein the excise authorities themselves have approved the classification of the goods under Chapter sub heading 7318 of the Tariff. Mr. Anturkar submitted that the order of the Tribunal can be effective only for the period from 23.10.1990 to 10.12.1991 and not thereafter, because on 11.12.1991 the excise authorities themselves have approved classification of the goods under Chapter sub heading 7318 of the Tariff which approval still holds the field. In other words, the submission was that for the period during with the classification lists (under 7318) approved after the issuance of the show cause notice dated 23.10.1990 are subsisting the reclassification (under 8409) approved by the Tribunal cannot be given effect to. To put it more simply, the contention of Mr. Anturkar was that the order of the Tribunal reclassifying the goods under Chapter heading 8409 should be only for the period from 23.10.1990 to 10.12.1991 and for the subsequent period from 11.12.1991, in view of the approved classification list on 11.12.1991, the goods must be held to be classifiable under Chapter sub heading 7318 of the Tariff.

8. Mr. Jetly, learned Counsel appearing on behalf of the revenue, on the other hand, contended that the show cause notice dated 23.10.1990 the revenue wanted the goods to be classified under Chapter subheading 8409. However, by his order dated 22.7.1991, the Asst. Collector held that the goods are classifiable under Chapter sub heading 7318. The revenue had filed appeal against the said order dated 22.7.1991 and during the pendency of the appeal, the classification lists filed by the Petitioners had to be approved as per the order passed by the Asst. Collector of Central Excise on 22.7.1991. According to Mr. Jetly, all classification lists approved after the order dated 22.7.1991 had to be subject to the order that may be passed in appeal filed by the revenue against the order dated 22.7.1991. In the instant case, since the Tribunal has held that the goods are classifiable under Chapter sub heading 8409, the same has to be effective from the date of the show cause notice as held by the Apex Court in the case of Cotspun Ltd. (Supra).

9. Mr. Jetly brought to our notice that after approval of the classification list under 7318 as per adjudication order dated 22.07.1991, the excise authorities have issued several show cause notices to the Petitioners to classify the goods under Chapter sub heading 8409, which clearly shows that the approval under 7318 was subject to the pending appeal. According to him, the Petitioners were put to notice that the approval of the classification was subject to the Appellate order and, therefore, it is not open to the Petitioners to contend that the Appellate order of the Tribunal, classifying the goods under Chapter sub heading 8409 cannot be given effect to for the period after 11.12.1991.

10. Having heard the Counsel on both sides and after perusing the records placed before us, we are of the opinion that the classification approved by the Tribunal has been rightly held to be effective from the date of the show cause notice dated 23.10.1990. In this petition, the Petitioners do not dispute that as per the order of the Tribunal dated 6.3.2000, the goods are classifiable under Chapter sub heading 8409. Their only grievance is that the said classification should be restricted only for the period from 23.10.1990 till 10.10.1991 because on 11.12.1991 and thereafter, several classification lists filed by the Petitioners have been approved by the department under Chapter sub heading 7308. In other words, the submission of the Petitioners is that even though the Tribunal by its order dated 6.3.2000 has held that the goods manufactured by the Petitioners are liable to be classified under Chapter sub heading 8409, it should be given effect to only for the limited period from the date of the show cause notice dated 23.10.1990 till 10.12.1991. The basis for this submission is that on 11.12.1991 the classification list filed by the Petitioners after the issuance of the Show cause notice have been approved and accepted by the revenue, that the goods are classifiable under Chapter sub heading 7308. As rightly pointed out by the Counsel for the revenue, although by show cause notice dated 23.10.1990 the revenue wanted the goods to be classified under Chapter sub heading 8409, the Asstt. Collector of Central Excise had classified the goods under Chapter sub heading 7318, and therefore, till that order dated 22.7.1991 was set aside in appeal, the excise authorities were bound to classify the goods under Chapter sub heading 7318 as per the order dated 22.7.1991. The contention of the revenue is further fortified by the fact that even after approving the classification lists under Chapter sub heading 7318, the Respondents have issued several show cause notices calling upon the Petitioners to show cause as to why the goods should not be classified under Chapter sub heading 8409 of the Tariff. Therefore, we have no hesitation in holding that the approval of the classification lists on or after 11.12.1991 were subject to the appeal filed by the revenue against the order of the Assistant Collector dated 22.7.1991. Once the Tribunal, by its order dated 6.3.2000 set aside the order of the Asstt. Collector of Central Excise dated 22.7.1991 and upheld the contention of the revenue as contained in the show cause notice dated 23.10.1990, then the order of the Tribunal must be given effect to from the date of the show cause notice. In the instance case, the Tribunal has rightly held that the classification approved by it will be effective from the date of the show cause notice dated 23.10.1990. The contention of the Petitioners that the classification approved by the Tribunal should be affected only for the period from 23.10.1990 to 10.12.1991 cannot be accepted because, the classification approved on 11.12.1991 and thereafter, were subject to the pending appeal and once the appeal is decided in favour of the revenue, then, as held by the Apex Court in the case of Cotspun Ltd. (Supra), the classification becomes effective from the date of the show cause notice.

11. Thus, we see no merit in the contention raised on behalf of the assessee.

The petition is accordingly dismissed with no order as to costs.