Madhumilan Syntex (P) Ltd. Vs. Union of India (Uoi) - Court Judgment

G.G. Sohani, J.

1. This is a petition under Articles 226 and 227 of the Constitution of India praying for the issuance of a writ of certiorari to quash the order dated 27-5-1985 passed by the Collector of Customs and Central Excise (Appeals) under Section 35A(3) of the Central Excises and Salt Act, 1944 (hereinafter referred to as 'the Act') in appeals No. 134-135-C.E./APPL. IND/84.

2. The material facts giving rise to this petition, briefly, are as follows :-

(a) Petitioner No. 1 is a company incorporated under the Companies Act, 1956. Petitioner No. 2 is the Managing Director of that company. The petitioner company carries on the business of manufacturing cellulosic spun yarn at its factory at Biora, District Rajgarh.

(b) The excise duty payable in respect of manufacture of cellulosic spun yarn is specified in Tariff Item No. 18(01) of the First Schedule to the Act. The relevant entry is as follows :

'18. III. Cellulosic spun yarn :

yarn, in which man-made fibre of cellulosic origin predominates in weight and, in or in relation to the manufacture of which, any process is ordinarily carried on with the aid of power -(i) not containing any man-made Six paise perfibres of non-cellulosic origin. count per Kilo-gram.(ii) containing man-made fibres Eighteen rupeesof non-cellulosic origin. per Kilogram.

There is thus a steep increase in excise duty if the cellulosic spun yarn contains any man-made fibres of non-cellulosic origin. At the material time, the effective rate under Tariff Item 18(III)(ii) was Rs. 9/- per Kilogram by virtue of a Notification No. 75/82-C.E., dated 28-2-1982, where-by excise duty in excess of Rs. 9/- per Kilogram was exempted.

(c) Under Rule 173B of the Central Excise Rules, 1944 (hereinafter referred to as 'the Rules'), every assesee is required to file with the proper officer for approval, a list in the prescribed form, showing the full description of excisable goods produced or manufactured by him, the item No. and sub-item, if any, of the First Schedule to the Act, under which such goods fall and the rate of duty leviable on such goods. The list submitted by a manufacturer-assessee under this rule is known as 'Classification List'.

(d) On 7-7-1983, the petitioner company filed a classification list. In Column No. 2 of that list, where the assessee-manufacturer is required to give full description of the goods produced or manufactured by him, the petitioner company described its product as follows :'Non-cellulosic synthetic waste and viscose in proportion of 15/85, 30/70, 40/60, 48/52 in counts 40c 2/40.'

In Column No. 3, where the assessee is required to specify the Tariff Item No. and sub-item, if any, of the First Schedule to the Act under which the goods fall, the petitioner company mentioned Item No. 18(III)(i). In view of the facts so represented by the petitioner company, the classification list submitted by the petitioner company was approved by the Excise officials and excise duty on the goods produced by the petitioner company was accordingly assessed.

(e) Rule 56 of the Rules enables Excise officers to take samples of any manufactured goods from the factory of the manufacturer. In exercise of powers conferred by this rule, two samples of the goods manufactured by the petitioner company were taken on 28-7-1983 by the Excise officers, from the factory of the petitioner company, vide Test Memo No. 1/83. A third sample was taken on 25-8-1983 vide Test Memo No. 2/83. These samples were sent to the Chemical Examiner, whose report was received by the Assistant Collector of Central Excise on 16-11-1983. The report Ex. R-2 disclosed that the samples taken from the factory of the petitioner company were of spun yarn containing man-made fibres of non-cellulosic origin.

(f) If the meantime, the petitioner company had submitted another classification list on 25-9-1983. In that list in Column No. 2, the petitioner company described the product manufactured by it as follows:'Cellulosic spun yarn containing non-cellulosic synthetic waste and viscose in proportion of 15/85, 30/70, 40/60, 48/52 in the count of 2/24s, 3/34s.'

The Excise officers took another sample on 22-10 1983, vide Test Memo No. 3/83 and sent it to the Chemical Examiner. His report Ex. R-4 disclosed that the sample was of spun yarn composed o1 man-made fibres of cellulosic and non-cellulosic origin. The results of the test conducted by the Chemical Examiner were communicated to the petitioner company.

(g) On 7-2-1984, respondent No. 5 the Superintendent of Central Excise, informed the petitioner company, vide letter Ex. R-6, dated 7-2-1984, that it was evident from the test result reports received from the Chemical Examiner that yarn containing man-made fibres was being manufactured by the petitioner company and hence, excise duty under Tariff Item No. Jg(III)(ii) and not under Item No. l8(III)(i) was payable by the petitioner company. The petitioner company was, therefore, directed not to clear such goods without payment of duty in accordance with Tariff Item No. l8(III)(ii). Regarding excise duty already paid on goods cleared, the petitioner company was directed to make good the deficiency in duty, forthwith. On the same day, respondent No. 5, the Superintendent, Central Excise, sent a notice Ex. R-7 to the petitioner company demanding a sum of Rs. 26,47,/49.39 P. on account of differential duty payable by the petitioner company.

(h) On 9-2-1984, the petitioners filed a writ petition before this Court, which was registered as Miscellaneous Petition No. 104 of 1984, praying that the demand of Rs. 26,47,749.30 made by respondent No. 5, be quashed. The petitioners also prayed for grant of an ad-interim writ. On the same day, a Division Bench of this Court consisting of Oza, C.J., as he then was, and Muley J. passed an exparte interim order directing that until further orders, the recovery of Rs. 26,47,749.39 in pursuance of demand notice Ex. R-7, would remain stayed and that excise duty would continue to be charged as was being charged till that date.

(i) According to respondents, before they came to know about the aforesaid interim order, respondent No. 4, the Assistant Collector, informed the petitioner company by notice Ex. R-9 dated 9-2-1984 that the classification list given by the petitioner company under Rule 173B of the Rules for approval, was proposed to be modified in the light of the report of the Chemical Examiner, which disclosed that the yarn produced by the petitioner company contained man-made fibres of non-cellulosic origin. The petitioner company was asked to show cause, if any, against the proposed modification. By another notice Ex. R-8 dated 9/10-2-1984 sent by respondent No. 5 under Section 11A of the Act, the petitioner company was called upon to show cause why the short levy amounting to Rs. 26,47,749.39 P for the period from 15-8-1983 to 6-2-1984 be not recovered from the petitioner company. The petitioner company was also informed that the demand notice dated 7-2-1984 Ex. R-7 be treated as modified by the notice Ex. R-8. This was done with a view to rectify the defect in the earlier demand vide Ex. R-7, which was not preceded by a show cause notice, as required by Section 11A(1) of the Act.

(j) In pursuance of the show cause notice Ex. R-8, issued under Section 11A(1) of the Act, the Assistant Collector passed an order Ex. R-10 on 5-3-1984, under Section 11A(2) of the Act, determining that a sum of Rs. 26,47,749.39 P was due from the petitioner company on account of short levy of excise duty payable by the petitioner company from 15-8-1983 to 6-2-1984. The Assistant Collector, however, directed that in view of the fact that a stay order dated 9-2-1984 was passed by the High Court in Miscellaneous Petition No. 104 of 1984, recovery to the aforesaid amount would not be enforced till the stay order was operative. The Assistant Collector also passed an order Ex. R-11 on the same day in pursuance of the notice Ex. R-9 sent to the petitioner company to show cause why the approval given to the classification list be not modified. By that order, the Assistant Collector modified the approval earlier accorded to the classification list submitted by the petitioner company, holding that excise duty on the goods produced by the petitioner company was liable to be paid under Tariff Item No. 18(III)(ii). The Assistant Collector, however, directed that in view of the interim order passed by the High Court in Miscellaneous Petition No. 104 of 1984, the petitioner company would continue to make payment of excise duty at the rate, at which it was making payment till then, so long as the interim order passed by the High Court was operative.

(k) Aggrieved by these two orders Ex. R-10 and R-11 passed by the Assistant Collector, the petitioner company preferred two appeals under Section 35 of the Act, before the Collector of Customs and Central Excise (Appeals), New Delhi. While these appeals were pending, Miscellaneous Petition No. 104 of 1984 came up for hearing before the Division Bench of Mulye J. and Gyani J. At the time of hearing, the petitioners were granted leave to amend the petition, as prayed for by them, and by the amendment so made, the petitioners sought further relief that the notices Ex. R-8 and R-9 and the orders Ex. R-10 and R-11 passed by the Assistant Collector, in pursuance of those notices Ex. R-8 and R-9, be quashed.

(l) On 24-11-1984, Miscellaneous Petition No. 104 of 1984 was disposed of by a Division Bench consisting of Mulye J. and Gyani J. The order of the Court was delivered by Mulye J. An explanatory note was appended by Gyani J. but he also signed the judgment of the Court delivered by Mulye J. The Division Bench held that the demand for Rs. 26,47,749.39 on account of short levies for the period from 15-8-1983 to 6-2-1984, made by respondent No. 5 by his notice Ex. R-7, was not preceded by a show cause notice and that there was no material on record to indicate that from 15-8-1983, the petitioner had been manufacturing yarn failing under Tariff Item 18(III)(ii). It was, therefore, held that the excess duty on that basis from 15-8-1983 to 6-2-1984 could not be demanded retrospectively, but at best it could be demanded prospectively from 7-2-1984, after giving proper opportunity of hearing to the petitioner company. The operative portion of the order passed by the High Court in Miscellaneous Petition No. 104 of 1984 is as follows :'In the result, this petition succeeds partly and is allowed to the extent that the demand for recovery of Rs. 26,47,749.39 for the period 15th August, 1983 to 6th February 1984, is quashed. However, the Collector of Central Excise, before whom the appeal is filed shall decide the appeal in accordance with law in the light of the observations made above.'

The directions with regard to the disposal of the appeal pending before the Collector, were contained in para 28 of the judgment and were as follows :

'As regards the disputed question of fact as to whether on the basis of the report of the Chemical Examiner, the product manufactured by the petitioner falls under Item 18(111)0) or (ii), now that the petitioners have already filed an appeal before the Collector of Central Excise, it will be open to the Collector, after considering the facts and circumstances of the case, to give adequate opportunity of hearing to the petitioners including an opportunity of adducing evidence and decide the appeal on merits.'

(m) After the aforesaid order was passed by the High Court, the Collector proceeded to hear the appeal and fixed the appeal for hearing on 7-2-1985. A notice Ex. R-13 dated 17-1-1985 was sent to the petitioner company informing it that the appeal would be heard on 7-2-1985, when the authorised representative of the company should appear together with all evidence, documentary or otherwise, in support of the case. A number of adjournments sought by the petitioners were granted. The petitioners were given opportunity of hearing and of adducing evidence. The petitioner company, however, did not adduce any evidence but contended that the appeal had become infructuous in view of the order passed by the High Court in Miscellaneous Petition No. 104 of 1984. Ultimately, the Collector by the order annexure 'I' dated 27-5-1985 disposed of the appeal filed by the petitioners. In that order, the Collector referred to the judgment of the High Court in Miscellaneous Petition No. 104 of 1984 and observed as follows :'The fact that there were two orders of the ACCE, Ujjain - one in respect of the classification of the product of the appellant and the other confirming the demand of duty of Rs. 26,47,749.39 in respect of the clearances of the said product during the period 15-8-1983 to 6-2-1984 - was fully in the knowledge of their Lordships. The order of the said ACCE confirming the demand for the past period was quashed by their Lordships and the other matter on the disputed question of fact was left to be decided in these appeal proceedings.'

The Collector then observed that one of the two orders passed by the Assistant Collector and assailed before him related to the demand of duty for the period from 15-8-1983 to 6-2-1984 and as the demand of that duty had been quashed by the High Court, the only appeal, which he was required to decide on merits, as directed by the High Court, was one preferred from the order Ex. R-11 passed by the Assistant Collector on 5-5-1984, modifying the approval of the classification list. The Collector, after appreciating the material on record including the result of the test carried out by the Chemical Examiner with regard to samples taken from the petitioner company, held, that the spun yarn produced by the petitioner company fell under Tariff Item No. 18(III)(ii) and not under Item IS(IH)(i) of the Schedule to the Act. The Collector, therefore, dismissed the appeal and affirmed the order passed by the Assistant Collector modifying the approval of the classification list. Aggrieved by that order passed by the Collector, the petitioners have filed this petition under Article 226/227 of the Constitution.

3. At the time of hearing, the petitioners sought leave to amend the petition. By the proposed amendment, the petitioners prayed that the notice dated 6-6-1985 sent by the Assistant Collector to the petitioners, demanding differential duty from March 1984 to April 1985, be quashed. The proposed amendment was allowed. Thus by this petition, as amended, the petitioners have sought two reliefs : (i) that the order annexure 'E' passed by the Collector (Appeals) affirming the modification made by the Assistant Collector in the approval of the classification list, be quashed and (ii) the notice dated 6-6-1985 calling upon the petitioner company to pay differential duty from March 1984 to April 1985, be quashed.

4. A preliminary objection was raised on behalf of the respondents to the maintainability of this petition under Article 226/227 of the Constitution on the ground of existence of an alternative remedy. It was urged that the remedy of an appeal to the Appellate Tribunal, under Section 35B of the Act, was available to the petitioners. In reply, it was contended that as the order passed by the Collector was in utter disregard of the directions of this Court and the statutory provisions, the appellate Tribunal was not the proper forum where the petitioners could assail the impugned order. Now, Section 35B of the Act no doubt provides for the remedy of an appeal from an order passed by the Collector under Section 35A of the Act and the normal statutory remedy should ordinarily be pursued unless it is likely to be too dilatory to give quick reasonable relief. However, in Miscellaneous Petition No. 104 of 1984, [1985 (19) ELT 329 (M.P.)], filed by the petitioners, they had obtained some relief though they had directly approached this Court. Hence, when the petitioners again directly approached this Court and their petition was entertained, at this stage when the period for filing an appeal has already expired, it would not be proper to dismiss the petition on the ground of existence of an alternative remedy. In the circumstances of this case, preliminary objection raised on behalf of the respondents, cannot, therefore, be upheld.

5. That takes us to the merits of the petition. The first contention advanced by Dr. Chitale, the learned counsel for the petitioners, was that the impugned order passed by the Collector, was vitiated for want of a show cause notice to the petitioners under Section 11A of the Act. It was urged that in the absence of a show cause notice prescribed by Section 11A of the Act, the entire proceedings before the Assistant Collector and the Collector were null and void and liable to be quashed.

6. To appreciate this contention advanced on behalf of the petitioners, it is necessary to turn to the relevant provisions of Section 11A of the Act, which are as under :

'Section 11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded -

(1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, a Central Excise Officer may, within six months from the relevant date, serve notice on the person chargeable with the duty, which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made requiring him to show cause why he should not pay the amount specified in the notice :

Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty by such person or his agent, the provisions of this sub-section shall have effect, as if for the words 'six months', the words 'five years' were substituted.'

Sub-section (2) of Section 11A of the Act provides that the Assistant Collector shall, after considering the representation, if any, made by the person, on whom the notice is served under Sub-section (1), determine the amount of excise duty due from such person. It is thus clear that a show cause notice under Section 11A of the Act is mandatory if it is proposed to recover from a person any excise duty, which has not been levied or paid or has been short-levied or short-paid or erroneously refunded. A demand to pay such duty can be made only when a show cause notice, as prescribed by Section 11A(1) of the Act is given and the representation, if any, made by such person is considered. Now, the question as to whether any show cause notice, as prescribed by Section 11A of the Act, has or has not been given, will arise only in a case, where a demand for excise duty not levied or not paid or short-levied or short-paid or erroneously refunded is being made by the Excise authorities. Let us, therefore, first examine what has been determined by the Collector by his impugned order. There were two appeals pending before him, arising out of two distinct orders passed by the Assistant Collector Ex. R-10 and Ex. R-11. By order Ex. R-10, the Assistant Collector had determined excise duty short levied for the period from 15-8-1983 to 6-2-1984. By the other order Ex. R-11, the Assistant Collector modified the approval of the classification list submitted by the petitioner company under Rule 173B of the Rules. As regards the appeal from the order Ex. R-10 passed by the Assistant Collector determining excise duty from the petitioner company from 15-8-1983 to 6-2-1984, the demand in that behalf having been quashed by the High Court in Miscellaneous Petition No. 104 of 1984, the appeal before the Collector from that demand, had become infructuous and the Collector, therefore, did not at all deal with the question as to whether the order Ex. R-10 passed by the Assistant Collector was or was not justified. The only appeal which survived and was, therefore, decided by the Collector by his impugned order, was the appeal from the order Ex. R-11 passed by the Assistant Collector, modifying approval of the classification list. In deciding that appeal, the only question, which the Collector was called upon to decide, was whether the order Ex. R-11 passed by the Assistant Collector, revising the approval of the classification list was or was not justified. The jurisdiction of the Assistant Collector to revise the approval of the classification list on the ground that once the classification list was approved, the Assistant Collector had no power to modify the approval, was neither challenged before the Collector nor before us. It was, however, urged that without complying with the provisions of Section 11A(1) of the Act, the approval of the classification list could not be modified and the Collector failed to appreciate that for want of a notice as prescribed by Section 11A(1) of the Act, the order Ex. R-11 passed by the Assistant Collector deserved to be quashed.

7. In our opinion, in deciding the question as to whether the classification list submitted by an assessee should or should not be approved or whether the approval once given should or should not be modified, the provision of Section 11A of the Act are not attracted. If as a result of modification in the approval of the classification list, any demand for excise duty short levied or short paid is made, then there can be no manner of doubt that such demand can be made only after a show cause notice, as required by Section 11A of the Act is made and the amount is determined after taking into consideration the representation, if any, made in that behalf. But the validity of the order Ex. R-11 passed by the Assistant Collector merely modifying the approval of the classification list, cannot be judged by the requirements prescribed by Section 11A of the Act. No provision of the Act or the Rules was brought to our notice, which prescribed a particular procedure for modifying the approval of the classification list submitted by an assessee. Therefore, the order passed by the Collector affirming the order Ex. R-11 passed by the Assistant Collector cannot be struck down on the ground that the Assistant Collector or the Collector had failed to comply with the provisions of Section 11A of the Act before modifying the approval of the classification list.

8. The next question that arises for consideration is whether before modifying an approval of the classification list, the Assistant Collector is required to give notice to the person concerned to show cause against the action proposed by him in conformity with the principles of natural justice. In our opinion, though giving of a notice is not prescribed by any provision of the Act or the Rules, the principles of natural justice require that the person to be affected by any action of a statutory authority, should have opportunity to represent his case before such action is taken. That opportunity was undoubtedly afforded in the instant case because before passing the order Ex. R-11, the Assistant Collector had sent a notice Ex. R-9 to the petitioner company to show cause why the approval should not be modified. The petitioners did not avail of that opportunity. The Collector had also given to the petitioners the opportunity of hearing and adducing evidence before he affirmed the order Ex. R-11 passed by the Assistant Collector but the petitioners did not adduce any evidence. It is thus clear that in passing the order Ex. R-11 as well as the impugned order, the principles of natural justice were not violated.

9. It was not urged before us that the Collector should have allowed the appeal preferred by the petitioner from the order Ex. R-11 passed by the Assistant Collector, because the Assistant Collector had no power to modify the approval already given to the classification list submitted by the petitioner company. It is, therefore, not necessary to examine that question. It was, however, strenuously contended on behalf of the petitioners that before deciding the appeal, the Collector should have given notice under Section 11A(1) of the Act in view of the provision: of Sub-section (3) of Section 35A of the Act. It is, therefore, necessary to refer to that provision, which is as follows :

'35A. Procedure in appeal :

x x x x x(3) The Collector (Appeals) may, after making such further inquiry as may be necessary, pass such order as he thinks fit con firming, modifying or annulling the decision or order appealed against or may refer the case back to the adjudicating authority with sue! directions as he may think fit for a fresh adjudication or decision as the case may be, after taking additional evidence, if necessary :

Provided that an order enhancing any penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order :

Provided further that where the Collector (Appeals) is of opinion that any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, no order requiring the appellant to pay any duty not levied or paid, short-levied or short-paid or erroneously refunded shall be passed unless the appellant is given notice within the time-limit specified in Section 11A to show cause against the proposed order..'

The aforesaid provision cannot be construed to mean that before deciding any appeal from any order passed by an Excise Officer, a duty is cast on the Collector to give notice, as required by Section 11A of the Act. The proviso to Sub-section (3) of Section 35A of the Act only lays down that in deciding any appeal, if the Collector finds that any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, no order requiring the appellant to pay such duty shall be passed unless the appellant is given notice, within the time-limit specified in Section 11A, to show cause against the proposed order. In the instant case, the impugned order passed by the Collector does not require the petitioners to pay any duty not levied or paid, short-levied or short-paid or erroneously refunded. The Collector has, by the impugned order, merely affirmed the order passed by the Assistant Collector modifying his approval of the classification list. In these circumstances, the contention that before deciding the appeal, the Collector was bound to give a notice under Section 11A of the Act to the petitioners, cannot be upheld.

10. Reliance was placed by the learned counsel for the petitioners on a number of decisions, which are distinguishable on facts. We asked the learned counsel whether there was any authority for the proposition that before modification of the approval of the classification list, the excise authorities were required to give notice within the time limit specified in Section 11A of the Act, specifying the amount of duty which a person was required to pay. The learned counsel for the petitioners referred to the decision in Shyam Sunder U. Nichani v. Assistant Collector of Central Excise and Anr. - 1985 (22) ELT 751. In that case, an assessee was called upon to pay excise duty on the ground that the approval of the classification list was being withdrawn. It was contended on behalf of the assessee in that case that Section 11A of the Act was merely a recovery provision and that it did not enable the original authority under the Act to reopen and reassess. That contention was negatived by the Karnataka High Court and it was held that reassessment was permissible under Section 11A of the Act. That decision is not an authority for the proposition that before modifying approval of the classification list, a notice under Section 11A of the Act is obligatory. There can be no doubt that if it is proposed not merely to revise the classification list, but also to determine and recover the amount payable by a person on account of short levy, a notice as required by Section 11A of the Act, within the time stipulated therefore has to be given. But when it is proposed to merely modify the approval of the classification list, all that is necessary is that the person affected should be given a notice to show cause why action as proposed be not taken. Such notice Ex. R-9 was given by the Assistant Collector before passing order Ex. R-11, which was the subject matter of appeal before the Collector. Therefore, it was not obligatory on the part of the Collector to give notice, as required by Section 11A of the Act, before proceeding to dispose of the appeal.

11. It was then contended that the order passed by the Collector was in violation of the directions given by the High Court in Miscellaneous Petition No. 104 of 1984. It was urged that to comply with the directions given by the High Court* the Collector should have given a show cause notice, as is required by Section 11A(1) of the Act, before proceeding to decide the appeal and that by his failure to do so, the impugned order was vitiated.

12. To appreciate the contention advanced on behalf of the petitioners, it is necessary to briefly refer to the decision given by the High Court in Miscellaneous Petition No. 104 of 1984. In that petition as amended, the High Court was required to deal with two prayers made on behalf of the petitioners : (1) that the demand, for a sum of Rs. 26,47,749.39 P made by the Excise authorities on account of short levy for the period 15-8-1983 to 6-2-1984 be quashed and (2) that the modification made by the Assistant Collector, vide his order Ex. R-11, in the approval of the classification list submitted by the petitioners under Rule 173B, be quashed. Now, with regard to the first prayer, the High Court held that the demand of Rs. 26,47,749.39 P. could not be sustained in law. It was, therefore, observed in para 27 :

'In our opinion, to that extent only, this petition deserves to be allowed.'

The fact that the petitioners were granted relief to the extent of quashing the demand for Rs. 26,47,74'9.39 P only, is made, clear in the operative portion of the order passed by the High Court, where it has been observed as follows :

'In the result, this petition succeeds partly and is allowed to the extent that the demand for recovery of Rs. 26,47,749.39 P for the period 15th August, 1983 to 6th February, 1984, is quashed.'

The High Court, therefore, did not grant the other relief prayed for by the petitioners that the modification in the classification list made by the Assistant Collector on 5-3-1984, vide his order Ex. R-11, be quashed. The High Court noted that an appeal from that order was pending before the Collector (Appeals). The High Court rejected the contention advanced on behalf of the petitioners that the classification list once approved, could not be revised by the Assistant Collector. The High Court then observed as follows :

'As regards the disputed question of fact as to whether on the basis of the report of the Chemical Examiner, the product manufactured by the petitioners falls under Item 18(III)(i) or (ii), now that the petitioners have already filed an appeal before the Collector of Central Excise, it will be open to the Collector, after considering the facts and circumstances of the case, to give adequate opportunity of hearing to the petitioners including an opportunity of adducing evidence, and decide the appeal on merits.'

The High Court then observed in the operative portion of the order, as follows :

'The Collector of Central Excise, before whom the appeal is filed, shall decide the appeal in accordance with the law in the light of the observations made above.'

13. From the aforesaid observations made in the order passed by this Court in Miscellaneous Petition No. 104 of 1984, it is difficult to spell out a direction to the Collector to give a show cause notice in terms of Section 11A(1) of the Act, before proceeding to decide the appeal. The only direction given to the Collector was that he should give an opportunity of hearing to the petitioners and should also give opportunity to the petitioners t> adduce evidence, if they so desired. That such an opportunity was afforded to the petitioners by the Collector, has already been found by us. Under the circumstances, the contention that the Collector had violated the directions given to him by the High Court in Miscellaneous Petition No. 104 of 1984, cannot be upheld.

14. On behalf of the petitioners, it was also contended that the High Court had quashed the order Ex. R-11 passed by the Assistant Collector along with the notice Ex. R-9 preceding that order, given by the Assistant Collector to the petitioners, to show cause why the approval of the classification list be not modified. It was, therefore, urged that the appeal before the Collector had become infructuous and that proceedings for modification of the approval of the classification list should have been commenced by the Excise authorities, de novo, by giving a show cause notice afresh. It is difficult to accept this contention. It cannot be lost sight of that in spite of the fact that a prayer to quash Ex. R-9 and R-11 was made by the petitioners, the High Court did not grant that relief but on the contrary, directed the Collector to dispose of the appeal pending before him from the order Ex. R-11 passed by the Assistant Collector, on merits. Had the High Court quashed the order of the Assistant Collector Ex. R-11 along with the notice, Ex. R-9, then there would have been no occasion to direct the Collector to decide the appeal preferred before him, on merits.

15. It was then contended that if the main judgment of the Court was silent with regard to the validity of the order Ex. R-11 passed by the Assistant Collector, the explanatory note appended by Gyani 3. made it clear that the order Ex. R-11 was quashed and the Collector should have, therefore, refrained from deciding the appeal on merits, as the order, from which the appeal was preferred, was quashed and hence, could not be affirmed in appeal.

16. To appreciate this contention, it is necessary to refer to few facts from the record of Miscellaneous Petition No. 104 of 1984, which was sent for, at the request of the petitioners. We found that the draft of the judgment to be delivered by the Court consisting of Mulye J. and Gyani J. was prepared by Mulye J. on 8-11-1984 and sent to Gyani J. On 24-11-1984-, Gyani J. returned the draft with the note 'order appended and agreed'. Thereafter, the judgment was delivered on 24-11-1984. It was prefaced as follows :

'The following order of the Court was delivered by P.O. Mulye J.'

Then followed the judgment signed by both the Judges and delivered on 24-11-1984. On the same day, along with the judgment, a note appended to the judgment was signed by Gyani J. alone. The note ends with the following observations :

'With this explanatory note, I concur with the order of my learned brother Mulye J., of which I had the advantage of going through.'

As we have already observed, the judgment of the Court was delivered by Mulye J. and signed by both the Judges. This is, therefore, not a case where each Judge of a Division Bench delivers a separate judgment agreeing with the conclusion of each ether for reasons recorded by each Judge separately. The main judgment of the Court has been signed by both the Judges and as we have already observed, by that judgment, the only relief granted to the petitioners was that the demand of the sum of Rs. 26,47,749.39 P on account of short levy of duty from 15-8-1983 to 6-2-1984 was quashed. The other relief prayed for by the petitioners that the order Ex. R-11 passed by the Assistant Collector modifying the approval of the classification list be quashed, was not only not granted but it was also expressly directed that the matter i.e. the validity of the order Ex. R-11 should be decided on merits by the Collector, before whom the appeal preferred by the petitioners from the order Ex. R-11 was pending. In the explanatory note, however, the order Ex. R-11 passed by the Assistant Collector modifying the approval of the classification list is quashed, with the following observations in para 8 of that note :

'The orders Annexures R-10 and R-11 are quashed, so also the demand dated 7-2-1984 (Annexure 'A'). The classification lists filed by the petitioners and the approvals granted thereon shall remain intact so long as a proper opportunity of showing cause is not afforded to the petitioners and the same is not cancelled in accordance with law.'

17. Now if the approval of the classification list was to remain intact and the order Ex. R-11 modifying that approval was quashed, then the appeal from the order Ex. R-11 preferred by the petitioners before the Collector had become infructuous and could not be decided on merits, as directed by the Division Bench by its order already referred to, and with which Gyani J. had expressed his concurrence. There is thus conflict between the orders, one signed by both the Judges and styled as 'the order of the Court' and the other signed by one Judge alone and styled as 'explanatory note'. By the order of the Court, the petitioners are not granted the relief of quashing of the order Ex. R-11 passed by the Assistant Collector while that relief is granted by the explanatory note. The Judgment delivered by the Court enjoins the Collector to decide the appeal from the order Ex. R-11 on merits, while the explanatory note renders that appeal infructuous because the order Ex. R-11, from which the appeal was preferred was being quashed. Normally, in case of such conflict in the two judgments, the matter would have been referred to a third Judges insofar as there was disagreement between the two Judges. In the instant case, however, the occasion for making a reference to the third Judge did not arise because Gyani J., in his explanatory note, observed that he was agreeing with the order proposed by Mulye J., which contained the direction to the Collector to decide the appeal from the order Ex. R-11 on merits. The order proposed by Mulye J. was, therefore, also signed by Gyani J. as he concurred with that order. In these circumstances, therefore, in case of a conflict between the judgment signed by both the Judges and the explanatory note signed by one Judge, the judgment signed by both the Judges shall prevail because that alone expresses the opinion of the Court. The learned counsel for the petitioners referred to certain decisions and contended that when the Judges of a Division Bench gave separate but concurring judgments, reasons given by each Judge for coming to the same conclusion are binding as precedents. This principle, however, is not attracted in the instant case. The finding that the order Ex. R-11 passed by the Assistant Collector is invalid and hence quashed, as held in the explanatory note by Gyani J., cannot be a reason for the direction to the Collector given by the order of the Court, pronounced and signed by both the Judges, to decide the appeal from the order Ex. R-11, on merits. The quashing of the order Ex. R-11 and the direction to the Collector to decide appeal therefrom on merits, cannot stand together and in that case, the explanatory note signed by one Judge must yield to the order of the Court pronounced and signed by both the Judges, whereby the order Ex. R-11 passed by the Assistant Collector was not only not set aside, but the Collector was also directed to decide the appeal on merits. Therefore, the contention that the impugned order passed by the Collector deserved to be quashed as it affirmed the order Ex. R-11, which was alreadys quashed by Gyani J., cannot be upheld.

18. No other ground was urged to assail the order annexure 'A' passed by the Collector. In our opinion, therefore, no case has been made out for quashing the impugned order.

19. The next question that arises for consideration is whether the notice dated 6-6-1985 sent by the respondents calling upon the petitioner Company to pay differential duty from March 1984 to April 1985, deserves to be quashed. That demand is admittedly not preceded by any notice, as required by Sub-section (1) of Section 11A of the Act. On behalf of the respondents, it was contended that in view of the interim order passed in this petition staying the operation of the order passed by the Collector in appeal, notice under Section 11A of the Act could not be served. It is true that by an interim order passed in this petition, the operation of the order passed by the Collector was stayed. But the fact remains that the demand made by the notice dated 6-6-1985 for the amount of differential duty from March 198^ to April 1985 does not comply with the requirement of Section 11A of the Act. The said demand, therefore, cannot be sustained in law. It will, however, be open to the respondents to make a fresh demand from the petitioner company for payment of any duty, which has not been levied or short-levied from March 1984, in accordance with law, after complying with the requirements of Section 11A of the Act.

20. For all these reasons, this petition is partly allowed. The notice dated 6-6-1985 sent by the respondents to the petitioners demanding payment of duty from March 1984 to April 1985, is quashed. It will be open to the respondents to make a fresh demand for payment of any duty, which has not been levied or short-levied from March 1984, in accordance with law, after complying with the provisions of Section 11A of the Act. The petitioners are, however, not entitled to the other relief sought by the petitioners that the order Annexure '' passed by the Collector (Appeals) be quashed. The petition is dismissed to that extent and the interim order passed on 6-6-1985 and confirmed on 3-8-1985 is vacated. In the circumstances of the case, parties shall bear their own cost of this petition. Security amount, if any, be refunded to the petitioners.