Afco Indl. and Chemicals Ltd. Vs. Cce - Court Judgment

Excerpt:
1. when this application for stay of the impugned order was heard, it appeared that at this stage itself the main appeal could be taken up for disposal. both sides agreeing, this was done.2. the assessees manufactured inverters and converters falling under heading 8504.00. one of the inputs was uninsulated copper strips falling under subheading 7409.10. in certain instances pieces cut from the strip were supplied to the buyers of the inverters etc. for replacement. the gate passes issued under rule 52a described the goods as copper strip. in the commercial invoices however these goods were described as "bus bars". the duty was paid in terms of rule 57f(1)(ii) on the ground that the inputs were removed as such. on 30.6.1994 the jurisdictional assistant collector issued an order for classification of such goods. in this order he took cognizance of the fact that the assessees termed such goods removed in terms of rule 57f(1)(ii) as bus bars. he held that since these strips were not insulated they could not be classified under heading 8544.00 but that they would continue to be classified under sub-heading 7409.10 attracting duty at 15%. before this clarification was issued, a show cause notice dated 4.4.1994 was issued seeking levy of differential duty on the assumption that the cut pieces of copper strips were classifiable under heading 8544.00. in his order-in-original dated 11.10.1994, the assistant collector relied upon his order in finalisation of the classification list and dropped the demand. the jurisdictional commissioner then caused an application to be moved before the commissioner (appeals) in form ea2. a copy was served on the assessees. on receipt of the copy of the application the assessees wrote to the commissioner (appeals)'s office seeking a copy of the review order stating clearly that in the absence of the supply thereof, no reply could be made. this letter was dated 23.7.1998. on the papers being sent to them by the commissioner (appeals), the assessees once again wrote on 18.8.1998 to the jurisdictional assistant commissioner. in this communication the jurisdictional assistant commissioner has informed that even the commissioner (appeals) did not have the grounds on which the application was made. the request for supply thereof were reiterated. it seems that no reply was received. no grounds were given for that. the commissioner (appeals) passed the impugned order ex-parte on 20.11.1998. the appeal is against this order.3. i have heard shri e.n. ramachandran, taxation advisor, for the appellants and shri k.l. ramteke for the revenue.4. the commissioner (appeals) refers in paragraph 2 of his order to a reply filed by the assessees dated 5.5.1994. this reply was not obviously filed for the proceedings before him which were instituted only on 9.7.1998 by way of filing an application under section 35e(4).the commissioner (appeals)'s order does not state that he invited the appellants to appear before him or had allowed them to make their submissions. there is no mention of the assessees' letter dated 23.7.1998 addressed to him. his order is cryptic and does not show any grounds on which he finds fault with the logic of the assistant collector to the effect that the strips being uninsulated could not merit classification under heading 8544 at all.5. in view of the multiple errors committed by the learned commissioner (appeals) his order cannot survive. it has to be set aside and the proceedings have to be remanded back to the jurisdictional commissioner (appeals). in the de novo proceedings he shall first ensure that the grounds raised before him by the jurisdictional executive commissioner are supplied to the assessees. he will then permit the assessees to make written and oral submissions and thereafter make a well reasoned speaking order. ordered accordingly.

Judgment:
1. When this application for stay of the impugned order was heard, it appeared that at this stage itself the main appeal could be taken up for disposal. Both sides agreeing, this was done.

2. The assessees manufactured inverters and converters falling under heading 8504.00. One of the inputs was uninsulated copper strips falling under subheading 7409.10. In certain instances pieces cut from the strip were supplied to the buyers of the inverters etc. for replacement. The gate passes issued under Rule 52A described the goods as copper strip. In the commercial invoices however these goods were described as "bus bars". The duty was paid in terms of Rule 57F(1)(ii) on the ground that the inputs were removed as such. On 30.6.1994 the jurisdictional Assistant Collector issued an order for classification of such goods. In this order he took cognizance of the fact that the assessees termed such goods removed in terms of Rule 57F(1)(ii) as bus bars. He held that since these strips were not insulated they could not be classified under heading 8544.00 but that they would continue to be classified under sub-heading 7409.10 attracting duty at 15%. Before this clarification was issued, a show cause notice dated 4.4.1994 was issued seeking levy of differential duty on the assumption that the cut pieces of copper strips were classifiable under heading 8544.00. In his order-in-original dated 11.10.1994, the Assistant Collector relied upon his order in finalisation of the classification list and dropped the demand. The jurisdictional Commissioner then caused an application to be moved before the Commissioner (Appeals) in Form EA2. A copy was served on the assessees. On receipt of the copy of the application the assessees wrote to the Commissioner (Appeals)'s office seeking a copy of the review order stating clearly that in the absence of the supply thereof, no reply could be made. This letter was dated 23.7.1998. On the papers being sent to them by the Commissioner (Appeals), the assessees once again wrote on 18.8.1998 to the jurisdictional Assistant Commissioner. In this communication the jurisdictional Assistant Commissioner has informed that even the Commissioner (Appeals) did not have the grounds on which the application was made. The request for supply thereof were reiterated. It seems that no reply was received. No grounds were given for that. The Commissioner (Appeals) passed the impugned order ex-parte on 20.11.1998. The appeal is against this order.

3. I have heard Shri E.N. Ramachandran, Taxation Advisor, for the appellants and Shri K.L. Ramteke for the Revenue.

4. The Commissioner (Appeals) refers in paragraph 2 of his order to a reply filed by the assessees dated 5.5.1994. This reply was not obviously filed for the proceedings before him which were instituted only on 9.7.1998 by way of filing an application under Section 35E(4).

The Commissioner (Appeals)'s order does not state that he invited the appellants to appear before him or had allowed them to make their submissions. There is no mention of the assessees' letter dated 23.7.1998 addressed to him. His order is cryptic and does not show any grounds on which he finds fault with the logic of the Assistant Collector to the effect that the strips being uninsulated could not merit classification under heading 8544 at all.

5. In view of the multiple errors committed by the learned Commissioner (Appeals) his order cannot survive. It has to be set aside and the proceedings have to be remanded back to the jurisdictional Commissioner (Appeals). In the de novo proceedings he shall first ensure that the grounds raised before him by the jurisdictional Executive Commissioner are supplied to the assessees. He will then permit the assessees to make written and oral submissions and thereafter make a well reasoned speaking order. Ordered accordingly.