K. Sankararaman, Member (T) -
(1.) M/s. Indian Explosives Ltd. (as they were known at the time they filed this appeal) have challenged herein the order-in-appeal dated 21-9-1984 passed by the Collector of Central Excise (Appeals), Calcutta dismissing their appeal before him as a nullity since that appeal was against a letter dated 7-7-1984 of the Superintendent of Central Excise, P.O., I.E. Gomia, directing them to deposit duty amount of Rs. 19,93,599.21 and Rs. 1,86,511.72 demanded earlier under two DD2s dated 20-1-1983. The Collector had observed in his order that the letter dated 7-7-1984 of the Superintendent cannot be treated as an order (original) passed under any provision of the Central Excises and Salt Act, 1944 or Central Excise Rules, 1944; the said letter being an executive action for realisation of outstanding arrears of revenue already raised. No appeal lies against the said letter. The Collector relied upon the decision of CEGAT, Special Bench-D, New Delhi in Brooke Bond India Ltd. v. Collector of Central Excise, Ahmedabad. The present appeal before us is against the said order of the Collector (Appeals).
(2.) When the appeal was posted for hearing Shri Samir Chakraborty, learned Counsel for the appellants, referred to the correspondence exchanged by them with the Department in regard to the availment of proforma Credit of the excise duty paid on cardboard boxes used for packing their products viz. explosives. He handed over a list of dates showing different communications. He indicated that they were permitted, at one stage, to avail the said benefit but subsequently asked to pay the duty to the extent of credit so availed. The learned Counsel stated that the Department had issued a show cause notice in this regard to which they had sent their reply contesting the demand and pointed out that this notice still remains to be disposed of. During the pendency thereof, the Superintendent of Central Excise had directed them for deposit of the amount demanded. Against this, they filed an appeal to the Collector (Appeals). He rejected the appeal as a nullity without grant of personal hearing. Shri Chakraborty, learned Counsel urged that this question apart, they have a strong case on merits and proforma credit was lawfully due to them which is supported by a number of judicial decisions including the Supreme Court judgment in Collector of Central Excise v. East End Paper Industries. On the question of maintainability of the appeal against a decision communicated by a letter he cited the Tribunal decision in Wimco Ltd. v. Collector, Central Excise, Shillong and Brakes India Limited v. C.C.E., Madras reported in 1986 (26) ELT 877 and 1987 (31) ELT 1030 respectively. Shri M.N. Biswas, learned Senior Departmental Representative, supported the impugned order and urged that it was legally in order. No appeal would lie against the Superintendent's letter which was merely a direction to them to pay the dues demanded. It was not an appealable order and no appeal lay against the same as has been correctly held by the Collector (Appeals) in his impugned order. Since this letter merely referred to the dues from them arising from a previous decisions of the Assistant Collector, the appeal, if at all, should have been filed by them against the said earlier decision of the Assistant Collector. Having failed to do so, it was not open to them to file an appeal against the subsequent letter of the Superintendent which was merely a letter requesting them to pay the dues with reference to the earlier letter of the Assistant Collector. The present appeal may be dismissed as the Collector (Appeals) had rightly dismissed the appeal before him as a nullity.
We have considered the submissions made by both the sides and also perused the record. The Collector (Appeals) had dismissed the appeal as a nullity while the apparently innocuous letter dated 2-7-1984 of the Superintendent directing them to deposit the arrears of duty demanded under two DD2 dated 20-1 -1983 which was not considered to be appealable had, nevertheless, impelled them to file a Writ Petition in the Calcutta High Court and obtain a Stay of the demand raised subject to their furnishing a bank guarantee to the extent of Rs. 15 lakhs. It has been reported by the appellants that the said Bank Guarantee is currently in force. The Writ Petition is to be disposed of. Shri Chakraborty, learned Counsel for the appellants, stated, however, that the pendency of their Writ Petition is no bar to the disposal of their appeal by this Bench. Accordingly, we proceed to dispose of the appeal.
(3.) WHILE the impugned order-in-appeal has disposed of the appeal of the appellants on a limited question that no appeal lies against the letter dated 7-7-1984 under Section 35, the case needs a close look in view of the stalemate reached in the matter and the fact submitted before us by the learned Counsel for the appellants that the show cause notice issued on 20-1-1.983 and replied to them vide their letter dated 23-2-1983 still remains pending. If such be the case, the letter of the Superintendent asking them to pay the arrears of duty as per the DD2 demands was premature. However, on a perusal of the said letter of the Superintendent which is dated 7-7-1984, we find that it mentions that as per the order of the Appellate Collector dated 11-6-1982, the original order dated 18-8-1981 of Assistant Collector very much stands and as such they were directed that they should deposit duty of Rs. 19,93,599.21 and Rs. 1,86,511.72. This letter dated 18-8-1981 of the Assistant Collector is a very brief one, the operative part of which was as follows :
"There is audit objection on your proforma credit in the cardboard boxes. The matter has been referred to the higher authority for settlement of audit objection. As such your request for provisional permission to avail concession cannot be accorded till the audit objection is settled."
This letter of the Assistant Collector was in reply to their letter dated 15th July, 1981 addressed to him wherein they had referred to their previous letter and their discussions with him regarding their request for allowing them to utilise proforma credit against receipt of cardboard cartons for packing of explosives and the submissions of .the relevant extract of the Schedule 2 framed under Rule 8 of Explosives Manual dealing with packing of explosives. He was requested to allow them provisionally to continue availment of proforma credit under Rule 56A and also issue to them a speaking order to enable them to take further action in the matter. The show cause notice dated 20-1-1983 is a bland notice alleging contravention of Rule 56A as they had taken incorrect proforma credit towards packing materials since November, 1978. The amount of credit so taken is stated to be Rs. 19,13,599.21. Their reply to this notice is dated 23-2-1983. This letter is addressed to the Assistant Collector. It was submitted by Shri Chakraborty, learned Counsel for the appellants, that the notice and their reply remain undisposed of even now. If as held by the Collector (Appeals) in his impugned order, their appeal to him was a nullity, the letter of the Superintendent directing them to deposit the amount demanded was no less a nullity as no formal adjudication of the demands had taken place in spite of their request for a speaking order made in their letter dated 15-7-1981. The Collector (Appeals) relied upon the decision of the Tribunal in Brooke Bond India Ltd. v. Collector of Central Excise, Ahmedabad reported in 1983 (13) ELT 1169 for his stand that against the letter in question no appeal could lie. The learned Counsel for the appellants had cited two decisions of the Tribunal in Brakes India Ltd. and Wimco Ltd. reported in 1987 (31) ELT 1030 and 1986 (26) ELT 877 respectively as support for his stand that they were justified in filing the appeal. The apparent contradiction in these Tribunal decisions about the maintainability of appeals against letters conveying a decision would be resolved if it is appreciated that an appeal can be filed under Section 35 of the Central Excises and Salt Act, 1944 against any decision or order passed under the said Act. Thus appeal can lie to the Collector (Appeals) against any decision or order under the Act. The Brooke Bond decision relied upon by the Collector (Appeals) would, however, justify the non-filing of an appeal against a letter even if conveying a decision if it is not a speaking appealable order and if the assessee keeps the matter alive and presses for an appealable order. In the present case since an appeal had in fact been filed by the appellants before the Collector (Appeals) against the letter of the Superintendent referring to the earlier DD2 demands and directing them to deposit the amounts so demanded, the Collector (Appeals) should have considered the appeal on merits. No hearing appears to have been granted by him before dismissing the appeal as a nullity. The appellants also appear not to have helped matters while pursuing their earlier appeal before the Appellate Collector which culminated in the issue of the order-in-appeal dated 11-6-1982. They had stated before him during the hearing granted in that matter that the Assistant Collector, Dhanbad and the Collector, Patna had allowed them credit in respect of cardboard boxes which had been disallowed with effect from March, 1981 and they had no grievance. It was on this basis that the Appellate Collector dismissed the appeal and vacated the Stay Order granted by him earlier. The Superintendent has referred to this order-in-appeal in his letter dated 7-7-1984 and stated that this order has been passed in favour of the department and the result of this order is that the original order of the Assistant Collector dated 18-8-1981 which has been referred to and extracted earlier stands. This is no adjudication order. In the circumstances, we allow the appeal and remand the matter to the Adjudicating Authority for deciding the notice dated 20-1-1983 issued to the appellants in accordance with law after granting them a hearing. It will be open to them to make additional submissions in the matter. Since the notice itself is pending since January, 1983 and as Bank Guarantee has been executed by them in January, 1985 as per the order of the Hon'ble High Court of Calcutta, we direct that the matter should be disposed of within three months of receipt of this order. Even though the Bank Guarantee has been furnished by the appellants as per the order of the Hon'ble High Court, since there is no confirmed demand for duty, the enforcement of the Guarantee or renewal thereof, will depend upon the decision to be taken in the adjudication of the demand matter. The appellants may make suitable submission before the Hon'ble High Court with regard to the pending Writ Petition and obtain suitable orders so that the adjudication of the case could be proceeded with.;