B.P.Jeevan Reddy, C.J. - (1.) This writ petition calls in question the validity of an order passed by the Government of India on 5-7-1980 on a Revision petition filed under Section 36 of the Central Excise Act. Under the said order, the Central Government dismissed the revision filed by the petitioners against the judgment and order of the Appellate Collector, Central Excise, dated 25-9-1979.
(2.) Petitioner No. 1 is a partnership firm. It is engaged in manufacturing electrolytic grade aluminium conductors and wires. According to the petitioners, products manufactured by them are of 7 and 8 SWG. They obtained the necessary licence from the Central Excise authorities and, as required by Rule 173-B of the Central Excise Rules, they submitted a classification list, which was checked and approved with a certificate that the said products/ goods are non-excisable and no duty is payable on their manufacture. It was counter-signed by the Assistant Collector, Central Excise, Meerut, on 6th February, 1973. The petitioners say further that in accordance with the said approval, they were clearing the goods without paying duty and have been regularly submitting returns in forms RT 5 and RT12 in accordance with Rules 55 and 173. It is also submitted that Central Excise Officers were visiting the petitioner's factory from time to time and were satisfied about the correct and proper working of the petitioner-concern. While so, the petitioners complain, they received a notice dated 7th April, 1975, issued by the Superintendent, Central Excise, calling upon the petitioners to show cause why penalty should not be imposed on them under Rule 173Q for the reason that the petitioners have sold 45019 Kgs. of electrolytic grade aluminium wire without payment of duty. The petitioners submitted a reply thereto and were also heard by the Assistant Collector. Thereafter, the show cause notice was amended by way of a corrigendum, whereunder action proposed was related to Rule 9(2) instead of Rule 173Q. The petitioners again represented that they have not violated any of the provisions of the Central Excise Rules, but yet the Assistant Collector decided, vide his order dated 29th April, 1977, that the petitioners ought to pay a sum of Rs. 21,755.85p as excise duty under Rule 173Q. Against the said order, the petitioner filed an appeal before the Appellate Collector, who disposed of the appeal on 25th September 1979. The Appellate Collector agreed with the petitioners that they were not guilty of making a false declaration in respect of Aluminium wires upto 10 SWG manufactured by them out of electrolytic grade aluminium. He found that the petitioners did not make any attempt to mis-declare or suppress material facts. He also noted that Central Excise Officers had been visiting the petitioners' factory from time to time, but did not point out any violation. Indeed, he was of the opinion that it was the responsibility of the Assistant Collector, before granting approval of the classification list, to have satisfied himself about the description of the goods and if he entertained any doubt in this behalf, he could have ordered drawal of samples for necessary checking, which was not done in this case. This omission has resulted in clearance of dutiable goods without payment of duty. It has happened due to error of inadvertence on the part of the departmental officers. Having said so, the Appellate Collector observed : "I do not find any justification for the adjudicating officer to have revoked the classification list with retrospective effect and demanded duty under Rule 9(2) of the Central Excise Rules, 1944. However, the fact remains that excisable goods have been cleared by the licensee without payment of duty and hence the duty is rightly recoverable under Rule 10 of the Central Excise Rules, 1944. Since the show cause notice has been issued on 7-4-1975, for clearances effected during the period from 20-2-1974 to 18-10-1974, the demand for the period prior to 8-4-1974 is time-barred under Rule 10 of the Central Excise Rules. The demand in respect of the remaining period is maintainable and is hereby confirmed. The Adjudicating Officer has quoted a wrong rule for recovery of the amount of duty due from the appellants but merely mentioning of a wrong rule in the Adjudication order does not vitiate the demand. Since there has not been any deliberate attempt on the part of the appellants to evade duty, I do not see any justification in imposing penalty on them. Order of penalty imposed on the appellants is, therefore, vacated. Except for the above modification the order passed by the Assistant Collector, Central Excise, Meerut, is upheld and the appeal is otherwise rejected." Against this order, the petitioner preferred a revision to the Government, which was dismissed with an observation that the Government are unable to see any substance in the two contentions urged by the petitioners, namely, (1) that the Assistant [Appellate?] Collector was not justified in sustaining the levy under Rule 10, having found that Rule 9(2) was not applicable and (2) that the Assistant Collector was not competent to correct the error committed by his predecessor in approving the classification list (holding the goods non-dutiable).
(3.) In this writ petition, it is contended by Sri Bharat Ji Agarwal, learned Counsel for the petitioners, firstly that it was not open to the Appellate Collector to have sustained the levy of duty under Rule 10, which was never invoked by the Assistant Collector (Adjudicating Officer). He submitted that Rule 9(2) and Rule 10, as they stood at the relevant time, are qualitatively different and, it is not merely a case of citing a wrong provision. There is substantive difference between the procedures under the two Rules and, therefore, it was not permissible for the Appellate Collector to have invoked Rule 10. Alternately, he contended that even if Rule 10 can be held to have been rightly invoked, even so levy of duty is bad since it is barred by limitation prescribed under Rule 10.;