SABYASACHI MUKHARJI - (1.) THE Judgment of the court was delivered by -
(2.) THE Collector of central Excise, Kanpur, is the appellant in this appeal under S. 35-L(b) of the 152 central Excises and Salt Act, 1944 (hereinafter called 'the Act'). THE period involved in this appeal is the assessment period from 25/03/197 9/09/1979, a period of about six months. THE respondent M/s Krishna Carbon Paper Company was engaged in the manufacture of carbon papers. During the period from 25/03/197 9/09/1979 the respondent manufactured and cleared from its factory a quantity of 5601 boxes, 20,288 reams and 45 packets of carbon papers for a total value of Rs. 7,67,49 8.40 without payment of any duty under the Act. THE Superintendent of central Excise Lakhimpur Kheri, issued notice to the respondent demanding central excise duty on carbon paper cleared during the aforesaid period under S. 11-A of the Act. THE respondent submitted a written reply staling that the notice was without jurisdiction because the respondent had taken out the central excise licence immediately on the direction of the department and it was only after 28/02/1982 that the product was subjected to duty under subitem (3 of Item 17 by the central Excise Budget of 1982. In support of this contention, the respondent relied on Notifications Nos. 107/82 and 69/82, both dated 28/02/1982. It was contended that the carbon paper was a new item which was specified under subitem (3 of Item 17 of CET. According to the revenue, however, the recasting of tariff Item 17 in 1976 was irrelevant and that the carbon being akin to coated paper (one side or both sides) was covered under sub-item (2 of Item 17 of the CET since 1976. THE submission of the respondent was that sub-item (3 of Item 17 of the CET covering the carbon paper including copy paper was inserted by the central Excise Budget, 1982, but it does not make any retrospective change. It was, according to the appellant, an introduction of specific name or variety of paper for being subjected to a different rate of duty. THE carbon paper remained a coated paper already covered under sub-item (2 of Item 17 of CET. THE Assistant Collector of central Excise, Sitapur, by his order dated April 27/30, 1983, confirmed the demand for basic excise duty amounting to Rs. 1,15,124.76 and special excise duty of Rs. 5,756.23 on carbon paper cleared during the period from 25/03/197 9/09/1979. THE Appellate Collector, however, set aside the order of the Assistant Collector and was of the view that the carbon paper could not be classified under tariff Item 17(2 of the Act, as it was before 1982. THE Collector (Appeals) accepted the respondentS contention that the carbon paper was brought under the purview of tariff Item 17 for the first time in 1982 when it was introduced as sub-item (3 of Item 17 of the First Schedule to the Act with effect from 1/03/1982. Being aggrieved thereby the appellant preferred an appeal before the Appellate tribunal. THE Appellate Tribunal dismissed the appeal. Hence, this appeal. 153 The question for decision in this appeal is: whether carbon paper before the introduction of central Excise Budget in 1982 and consequential amendment in tariff, fell under Item 68 of the First Schedule to the Act, as held by -the tribunal or under item 17(2 of the tariff item, which was claimed by the Collector of central Excise. Following its previous decision in the case of Sai Giridhara Supply Co. v. Collector of central Excise, Bombay the tribunal upheld the contention of the respondent and held that for the period before the amendment of central Excise Budget, in 1982, carbon paper fell under tariff Item 68 and not under tariff Item 17(2, as it then was. The tribunal did not go into the question of the limitation, namely, whether the claim was barred in any event by the lapse of time in view of S. 11-A of the Act. The tribunal came to the finding that the carbon paper in question fell under tariff Item 68 of the central Excise Tariff. Shri Kapil on behalf of the respondent submitted before us that the claim, in any event, was barred by lapse of time in view of S. 11-A of the Act. In view of the fact that the tribunal did not decide this question if we are persuaded to reject (sic) the revenueS contention in this appeal, the matter has to be remanded back to the tribunal to decide this question as to limitation, as there is no decision of the tribunal on this aspect of the matter. Before the contentions are appreciated, it will be appropriate to refer to the position of tariff Item 17 at three different phases, namely, in 1975, after the amendment in 1976 and after the further amendment to Item 17 by the Finance Act of 1982. Item 17 was amended with effect from 27/02/1982 and two specific entries were added. These were (3 and (4. It is necessary to set out the position at different points of time. It was as follows : Tariff Item 17 Position in 1975 JUDGEMENT_150_1_1989Html1.htm 154 There was further amendment to Item 17 by the Finance Act of 1982. Item 17 was amended with effect from 27/02/1982, and two specific entries were added. They are (3 and (4 which are reproduced below: JUDGEMENT_150_1_1989Html2.htm
(3.) THE short question with which we are concerned is, whether during the relevant period, namely, 25/03/197 9/09/1979 when the position mentioned above was prevailing, whether carbon papers could be included in "all kinds of paper including the paper which have been subjected to coating", would come within subitem (2 of Item 17 as mentioned hereinbefore or under residuary Item 68 of the central Excise Tariff. The tribunal followed a previous decision in Sai Giridhara Supply Co. v. Collector of central Excise, Bombay. There, the tribunal had discussed the various aspects of the matter and felt itself 155 bound by the decision of the Karnataka High court to which reference will be made later. The tribunal has referred to the observations of Buckley, L.J. where the Lord Justice observed that once a precedent was held to be a binding one, then no deviation therefrom was permissible within the judicial polity except in the well accepted categories of cases enumerated in the judgment. Those contingencies, the tribunal found, were not applicable to the facts of this case.;