CHJAY INDUSTRIES PVT LTD BOMBAY AND ANR Vs. UNION OF INDIA AND ORS
HIGH COURT OF GUJARAT
Chjay Industries Pvt Ltd Bombay And Anr
Union of India And Ors
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(1.)Petitioner No. 1 is a Private Limited Company; and Petitioner No. 2 is its Director. Since 1971, the petitioner-company manufactures certain items and roughly shaped pieces by forging of iron and steel. The petitioners challenge in this petition, the order passed by the Assistant Collector on the Classification List dated 9th March, 1987 and have prayed for other consequential reliefs.
(2.)With respect to the items manufactured by them, the Petitioners have been filing classification lists from time to time; and the Assistant Collector of Customs and Central Excise and the Superintendent of Central Excise, respondent Nos. 3 and 4 respectively and their predecessors-in-office have been approving the same. Certain items manufactured by them are subject to payment of Central Excise duty and certain from the payment of such duty. Steel forgings manufactured by the petitioners are as per customer's forging drawing and proof machined when so desired. They are forged as per customer's demands so that the same can be used by the customers as raw material for the manufacture of machined components such as crank shafts, axle, tubes, axle shafts, welding bulbs etc., prior to March 1, 1986, the items which the petitioners are describing as pieces roughly shaped by forging were covered by Item No. 26AA were exempted from payment of duty. Because of this Notification, the petitioners were not liable to payment of duty on the said products manufactured by them. In August, 1983, the Tariff relating to iron and steel and articles or iron and steel was rationalised and new Tariff Item 25 was intruded and substituted for the then existing Tariff Items No. 25 and 26AA. Forgings manufactured by the petitioners used to be classified under sub-item (8) of Item 25. The exemption granted by the aforesaid notification continued. On the basis of the harmonised coding systems, popularly known as H.S.N., several items mentioned in the Schedule were rearranged and re-organised under minute headings. Chapter 72 deals with iron and steel. The case of the petitioners is that the forgings manufactured by them clearly fall under Tariff Item No. 7208.00. It is also their case that the exemption granted earlier continues as a result of appropriate modifications made in Notification No. 208/83, dated 1-8-1983k. It is also the case of the petitioners that their classification list wherein they have described their steel foreign as falling under Item No.7208.00 was verified and approved by the Superintendent. In view of the new Budget of 1987, the petitioners were advised to file a fresh classification list; and, therefore, on 9-3-1987 they filed two classification lists for approval of the excise authorities. One was in respect of forgings proof machined and the other for forgings not proof machined. They were approved by the Inspector of Central Excise and also by the Superintendent of Central Excise; and, thereafter they were forwarded to the Assistant Collector for his approval. Thereafter some correspondence ensued. On 9-6-1987, the Superintendent of central Excise called upon the petitioners to file a revised classification list hoping forging manufactured by the, which were till then classified as falling under Tariff Item No. 7208.00 as falling under Tariff Item NO. 7308.90. Similar direction was also given by the Superintendent again on 16060\-1987. Both the said communications of the Superintendent are at Annexures 'D' and 'G' to the petition. The petitioners protested and maintained that the classification list submitted by them is proper. The Superintendent thereafter with his letter dated 2-7-1987 (Annexure 'J') returned the classification list dated 9-3-1987 containing the order dated 30-6-1987 passed by the Assistant Collector, changing classification of the petitioners' products described as roughly shaped pieces of forgings from Tariff Item No. 7208.00 to Tariff Item No. 7308.90 with effect from 1-3-1986.
(3.)The case of the petitioner is that the directions which were given by the Superintendent by his letters at Annexures D and G and the order passed by the Assistant Collector dated 30 - 6 - 1987 were in pursuance of the directions contained in the Telex issued by the Central Board of Excise and Customs dated 4/5 - 6 - 1987 Annexure K to the petition; and thus, the decisions taken by the Superintendent and the Assistant Collector are based on extraneous considerations, and not because of any change in the nature of the forgings manufactured by the petitioners or change in law. It is also their case that the Assistant Collector could not have changed the classification without following the procedure predictions. The Petitioners also contend that the orders passed by the Assistant Collector deserve to be quashed as they have been passed without affording any opportunity of hearing to the petitioners that the forgings manufactured by them which are roughly shaped pieces of forgings are really classifiable under Tariff Item No. 7208.00 and not under Tariff Item No. 7308.90. The Petitioners, therefore, want this Court to quash the directions contained in the telex of the Board at (Annexure - K to the petition) and also the directions contained in the letters dated 9 - 6 - 1987 and 16 - 6 - 1987 at (Annexures D and G to the petition) and the orders dated 30 - 6 - 1987 passed by the Assistant Collector, at (Annexure - J to the petition), they also want a declaration from this Court that the classification list dated 1 - 3 - 1986 filed by them is still operative and the steel forgings described by them as pieces roughly shaped by rolling or forging of iron or steel are classifiable under Tariff Item No. 7208.00 and not Tariff Item No. 7308.90.
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