Full Judgment
2. The matter was heard on 14.07.2000 when Shri Raj Kumar, C.A.appeared for the appellants. He submitted that the matter was covered by the Supreme Court's decision in the case of Collector of Central Excise, Baroda v. Cot Spun Ltd. -1999 (113) E.L.T. 353 (S.C.). In reply, Shri Sheo Narayan Singh, SDR referred to the amendments made in Section 11A of the Act in the Budget proposals for 2000 - 2001 Budget, and submitted that these amendments had been given retrospective effect by the Parliament, and in view of these amendments, the demands were valid and correct.
3. We have carefully considered the matter. The appellants had accepted the classification of the goods in question - Handle Lugs of base metal under sub-heading No. 8302.00 and had started paying central excise duty at the enhanced rate w.e.f. 01.04.1991. They have referred to the Central Board of Excise and Customs' Circular No. 5/91-CX.4 dated 27.02.1991 issued from File No. 164/1/91-CX. 4, but had pleaded that if a classification is revised on the Tariff Advice or Board's Circular, it should be effective only prospectively i.e. from 27.02.1991 and not retrospectively.
On classification, it is also seen that besides the Board's Circular dated 27.02.1991, referred to above, the matter is covered against the appellants by the Madurai Collectorate Trade Notice No. 39/91 dated 05.04.1991 appearing at page T-20 of 1991 (53) E.L.T.The plea of the appellants is that the demand for the earlier period from 01.04.1990 to 31.03.1991 was not proper. The Collector of Central Excise (Appeals), Allahabad had recorded in para 6 of the Order-in-Appeal as under:- "They have said that they had started paying duty after March, 1991 under Chapter sub-heading No. 8302.00 but they should not be forced to pay differential duty for the past period i.e. April, 1990 to March, 1991 to which the show cause-cum-demand notices relate. They have said that since the earlier approved classification lists of the appellants were not revised, the demand could not be issued for the past period under Section 11A of the Central Excises and Salt Act, 1944." 4. Thus, on classification there is no controversy, and we confirm the view taken by the ld. Collector of Central Excise (Appeals) in this regard. As regards the demand, from the order-in-original it is seen that three show cause notices had been issued on different dates and in each, the demand was for the normal period of limitation of six months.
According to the written submissions dated 14.07.2000, the show cause notice dated 29-10-1990 was % the period April, 1990 to September, 1990; show cause notice dated 07.04.1991 (as per Order-in-Original, dated 02.04.1991) was for the period October, 1990 to Feb. 1991; and show cause notice dated 19.07.1991 was for the period 01.03.1991 to 31.03.1991. The benefit of small scale exemption was continued to be extended to the appellants, and the demand was made only of the exempted/reduced rate as applicable to small-scale units.
5. The appellants had referred to the Supreme Court's decision in the case of Collector of Central Excise, Baroda v. Cotspun Ltd. - 1999 (113) E.L.T. 353 (S.C.). It is seen that as a part of 2000-2001 Budget proposals, by retrospective legislation, the effect of the above judgment had been over-ridden by making the following amendment in Sub-section (1) of Section 11A of the Act.
"(a) In the opening portion for the words 'erroneously refunded;, the words 'erroneously refund, whether or not such non-levy or non-payment, short levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the Rules made thereunder" shall be substituted and shall be deemed to have been substituted and on and from the 17th day of November, 1980." The show cause notices issued even after the approval of the classification or price lists, whether within the normal period or extended period, had been made valid for the past period. Action taken under Section 11A of the Act in this regard had been validated. Section 110 of the Finance Act, 2000 (Act No. 10 of 2000), enacted on 12.05.2000, is extracted below :- 110. Validation of action taken under Section 11A of Act 1 of 1944.
- (1) Any notice issued or served on any person under the provisions of Section 11A of the Central Excise Act during the period commencing on and from the 17th day of November, 1980 and ending on the date on which the Finance Act, 2000 receives the assent of the President (hereinafter referred to as the said period) demanding duty on account of non-payment, short payment, non-levy, short-levy or erroneous refund within a period of six months or five years, as the case may be, from the relevant date as defined in Clause (ii) of Sub-section (3) of that Section shall be deemed to be and to always have been, for all purposes, validly and effectively issued or served under that section, notwithstanding any approval, acceptance or assessment relating to the rate of duty on or value of, the excisable goods by any Central Excise Officer under any other provision of the Central Excise Act or the Rules made thereunder.
(2) Any action taken or anything done or purporting to have been taken or done under Section 11A of the Central Excise Act at any time during the said period shall be deemed to be and to have always been, for all purposes, as validly and effectively taken or done as if Sub-section (1) had been in force at all material times and, accordingly, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, - (a) all duties of excise levied, assessed or collected during the period specified in Sub-section (1) on any excisable goods under the Central Excise Act, shall be deemed to be and shall be deemed to always have been, as validly levied, assessed or collected as if Sub-section (1) had been in force at all material times; (b) no suit or other proceedings shall be maintained or continued in any court, tribunal or other authority for the refund of, and no enforcement shall be made by any court of any decree or order directing the refund of any such duties of excise which have been collected and which would have been validly collected if Sub-section (1) had been in force at all material times; (c) recovery shall be made of all such duties of excise which have not been collected or, as the case may be, which have been refunded but which would have been collected or, as the case may be, would not have been refunded, if Subsection (1) had been in force at all material times.
Explanation. - For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if this Section had not come into force.
6. Thus, the challenge with regard to the validity of the show cause notices issued within the normal period of limitation after the approval of the classification list, had no substance.
7. On careful consideration of the matter, we do not find any merit in this appeal and the same is rejected. Ordered accordingly.