Murari Mohan Dutt, J. - (1.) These two appeals arise from the judgment of Chittatosh Mookerjee J., One appeal has been preferred by the Customs authorities and the other by Khemchand Raj Kumar, a partnership firm, hereinafter referred to as the firm, under the circumstances stated hereafter.
(2.) The firm imported uncoated cold rolled sheets between 1964 and 1965. It is not disputed that all such imports were made before February 28, 1965. The firm manufactured tinned sheets from the uncoated sheets imported by it. The firm had to pay countervailing customs duty at the rate of Rs. 110 per metric tonne which was then in force. By a notification No. 50/65 dated March 6, 1965, of the Ministry of Finance, the import duty on cold rolled sheets were enhanced to Rs. 225 per metric tonne. Under item No. 26AA of the First Schedule to the Central Excises and Salt Act, 1944, tinned sheets are liable to pay excise duty By a notification No. 24/65 dated February 28, 1965, issued under Rule 8(1) of the Central Excise Rules, 1944, the Central Government fixed the excise duty on tinned sheets or the equivalent customs duty under Section 2A of the Indian Tariff Act, 1934, at Rs. 225 per metric tonne. This notification was subsequently amended by the notification No. 72/65 dated May 1, 1965, which granted certain concession in the payment of excise duty, i.e., at the rate of Rs. 150 per metric tonne, if the duty of excise leviable under item No. 26AA of the First Schedule to the Central Excises and Sale Act, 1944, read with the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 32/65, Central Excise, dated February 28,1965, or the countervailing duty of customs leviable under Section 2A of the India Tariff Act, 1934, on the uncoated cold rolled sheets used in the manufacture of the tinned Sheets, has already been paid. The said notification No. 72/65 was given retrospective operation with effect from March 6, 1965.
(3.) On October 13, 1965, the Inspector, Central Excise, issued; a notice under Section 10 of the Central Excise Rules, 1944, to the firm, demanding payment of Rs. 2,93,773-49 which was subsequently reduced to Rs. 2,93,234-26 towards Central Excise Duty. It was stated in the said notice that as the firm did not fulfil the conditions of the notification No. 24/65 dated February 28, 1965, as amended by the notification No. 72/65 dated May 1, 1965, it was to pay excise duty at the tariff rate on the tinned sheets manufactured and removed by it. By another notice dated November 27, 1965, issued by the Assistant Collector of Central Excise, the firm was called upon to show cause why differential duty between the tariff rate of Rs. 375 per metric tonne and the duty already paid on tinned sheets, should not be recovered. It was alleged that the firm had cleared tinned sheets on payment of duty at the rate of Rs. 225 per metric tonne during the month of March 8, 1965, to April 28,1965 and at the rate of Rs. 150 per metric tonne from May, 4, 1965, to July 10, 1965, after availing of the exemption under the notification No. 24/65 dated February 28,1965, as amended by the notification No. 72/65, dated May 1, 1965, without fulfilling the conditions laid down in the said notification. The differential duty that was demanded from the firm was to the tune of Rs. 8,54,445-93.;