Commissioner of Central Excise Vs. Hindustan Trust Ltd. - Court Judgment

Excerpt:
1. the present appeal has been filed by the revenue against the order of the principal collector of central excise, new delhi who has dropped the demand of differential duty raised on the respondents herein for the period 7-12-1986 to 30-6-1987 on a product known as "foot powder".2. the brief facts of the case are that the assessees/respondents herein manufacture 'foot powder'. they commenced manufacture on 7-12-1986. a classification list was filed by them on 26-11-1986 claiming classification under sub-heading 3003.19 of the schedule to the central excise tariff act which covers p or p medicines. a show cause notice was issued on 3-7-1987 proposing revision of the classification list by classification as 'beauty or make-up preparations' and 'preparations for the care of the skin' under heading 3304. no demand of duty was, however, raised in this notice which was adjudicated by the assistant collector's order and the order-in-original dated 19-11-1987 holding that the item is to be treated as a preparation for care of the skin under heading 3304. in january, 1988 the assessee filed an appeal against this order before the collector (appeals), new delhi. on 15-1-1988, a show cause notice proposing recovery of differential duty for the period 7-12-1986 to 30-6-1987 was issued, invoking the extended period of limitation under the provisions of the proviso to section 11a of the central excise act, 1944. the principal collector adjudicated this notice dropping the demand, both on merits and on time bar, in other words, the principal collector accepted the stand of the respondents that the item fell for classification under chapter 30 and he also held that extended period was not attracted in this case in view of the issue of the earlier show cause notice dated 3-7-1987 and the adjudication order of the assistant collector dated 19-11-1987. on 12-6-1990 the collector (appeals) passed order-in-appeal no. 227-ce/dlh/90 and set aside the assistant collector's order dated 19-11-1987, holding that the classification of 'foot powder' was under chapter 30. the present appeal arises out of the order dated 30-6-1989 passed by the principal collector, new delhi.3. we have heard shri h.k. jain, learned departmental representative and shri r. swaminathan, learned consultant.4. it is not disputed by the revenue that the order of the collector (appeals) dated 12-6-1990 has been accepted by the department and that the department has not filed any appeal in that case and the present case proceeds on the basis that since the jurisdictional assistant collector has already, vide his order dated 19-11-1987, approved the classification list under sub-heading 3304.00, principal collector has no jurisdiction to pass another order for the same period classifying the same goods under a different sub-heading. this ground is no longer available to the department since the assistant collector's order referred to herein above has been set aside by the collector (appeals) vide order dated 12-6-1990 which has not become final. therefore, the grounds relating to the jurisdiction of the collector are no longer available to the department and the appeal is to be treated as not maintainable in view of the fact there is a subsequent order of the collector (appeals), namely order dated 12-6-1990 confirming classification under chapter 30. the main plank of the revenue's appeal thus falls to the ground. further, we also note, that in addition to a decision on merits, the principal collector has also held that the demand is barred by limitation, in view of the fact that there was no suppression by the respondents, and that a earlier show cause notice had been issued and adjudicated upon. this part of the collector's order has not been challenged in the present appeal. there is no ground relating to the findings on time bar. in fact that appeal memorandum states that "the order in original of the principal collector is liable to be set aside on the basis of legal issue raised relating to the jurisdiction of the collector to change classification of product of the same period as decided by the assistant collector, and the respondents contention on time bar is not relevant." therefore, the collector's findings that demand is barred by limitation remains unchallenged and is required to be upheld.5. for the above reasons, we uphold the order passed by the principal collector and reject the appeal of the revenue.

Judgment:
1. The present appeal has been filed by the Revenue against the order of the Principal Collector of Central Excise, New Delhi who has dropped the demand of differential duty raised on the respondents herein for the period 7-12-1986 to 30-6-1987 on a product known as "Foot Powder".

2. The brief facts of the case are that the assessees/respondents herein manufacture 'Foot Powder'. They commenced manufacture on 7-12-1986. A classification list was filed by them on 26-11-1986 claiming classification under Sub-heading 3003.19 of the Schedule to the Central Excise Tariff Act which covers P or P medicines. A show cause notice was issued on 3-7-1987 proposing revision of the classification list by classification as 'Beauty or make-up preparations' and 'preparations for the care of the skin' under Heading 3304. No demand of duty was, however, raised in this notice which was adjudicated by the Assistant Collector's order and the order-in-original dated 19-11-1987 holding that the item is to be treated as a preparation for care of the skin under Heading 3304. In January, 1988 the assessee filed an appeal against this order before the Collector (Appeals), New Delhi. On 15-1-1988, a show cause notice proposing recovery of differential duty for the period 7-12-1986 to 30-6-1987 was issued, invoking the extended period of limitation under the provisions of the proviso to Section 11A of the Central Excise Act, 1944. The Principal Collector adjudicated this notice dropping the demand, both on merits and on time bar, in other words, the Principal Collector accepted the stand of the respondents that the item fell for classification under Chapter 30 and he also held that extended period was not attracted in this case in view of the issue of the earlier show cause notice dated 3-7-1987 and the adjudication order of the Assistant Collector dated 19-11-1987. On 12-6-1990 the Collector (Appeals) passed Order-in-Appeal No. 227-CE/DLH/90 and set aside the Assistant Collector's order dated 19-11-1987, holding that the classification of 'foot powder' was under Chapter 30. The present appeal arises out of the order dated 30-6-1989 passed by the Principal Collector, New Delhi.

3. We have heard Shri H.K. Jain, learned Departmental Representative and Shri R. Swaminathan, learned Consultant.

4. It is not disputed by the Revenue that the order of the Collector (Appeals) dated 12-6-1990 has been accepted by the department and that the department has not filed any appeal in that case and the present case proceeds on the basis that since the jurisdictional Assistant Collector has already, vide his order dated 19-11-1987, approved the classification list under Sub-heading 3304.00, Principal Collector has no jurisdiction to pass another order for the same period classifying the same goods under a different Sub-heading. This ground is no longer available to the department since the Assistant Collector's order referred to herein above has been set aside by the Collector (Appeals) vide Order dated 12-6-1990 which has not become final. Therefore, the grounds relating to the jurisdiction of the Collector are no longer available to the department and the appeal is to be treated as not maintainable in view of the fact there is a subsequent order of the Collector (Appeals), namely order dated 12-6-1990 confirming classification under Chapter 30. The main plank of the Revenue's appeal thus falls to the ground. Further, we also note, that in addition to a decision on merits, the Principal Collector has also held that the demand is barred by limitation, in view of the fact that there was no suppression by the respondents, and that a earlier show cause notice had been issued and adjudicated upon. This part of the Collector's order has not been challenged in the present appeal. There is no ground relating to the findings on time bar. In fact that appeal memorandum states that "the order in original of the Principal Collector is liable to be set aside on the basis of legal issue raised relating to the jurisdiction of the Collector to change classification of product of the same period as decided by the Assistant Collector, and the respondents contention on time bar is not relevant." Therefore, the Collector's findings that demand is barred by limitation remains unchallenged and is required to be upheld.5. For the above reasons, we uphold the order passed by the Principal Collector and reject the appeal of the Revenue.