SAURASHTRA CEMENT AND CHEMICALS INDUSTRIES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) . The petitioner-Saurashtra Cement and Chemical Industries Limited is engaged in the business of manufacturing Portland Cement which was a controlled commodity at the relevant point of time. The dispute in the present petition is for the period from 1/10/1975 to 22/12/1975 with regard to Excise duty on packing material, that is, gunny bags. It has challenged the order dated 18/10/1978 passed by the Assistant Collector, Central Excise Department, Bhavnagar, under Rule 10 of the Central Excise Rules, 1944 (hereinafter referred to as 'the Rules') confirming the demand for recovering differential duty amounting to Rs. 15,02,721.90 ps. from the petitioner. It is also prayed that the decision of the Assistant Collector and/ or the Superintendent of Central Excise and Customs, by which packing charges on cement have been included in the assessable value be set aside. Packing charges on cement have been included in the assessable value for the purpose of Excise duty on the basis of Sec. 4(4)(d)(i) of the Central Excises and Salt-Act, 1944 (hereinafter referred to as 'the Act').

(2.) . At the time of filing the petition, the only question which was raised was whether packing charges were required to be included in the assessable value for the purpose of Excise duty. On merits, the Division Bench rejected the contention that under Sec. 4(4)(d)(i) of the Act for determining assessable value of the excisable goods the value of the gunny bags which are used as packing material was required to be excluded for various reasons. However, at the time of hearing of the petition, the learned Advocate for the petitioner filed Civil Application No. 1883 of 1990 for amending the petition by adding a ground that Rule 10 of the Rules was substituted with effect from 6/08/1977 and as there is no saving clause the proceedings initiated under the substituted Rule 10 would come to an end. In support of this contention, he relied upon the decisions of this Court in the case of Amit Processors Pvt. Ltd. v. Union of India and Ors., 1985 (21) ELT 24 and in the case of Mahendra Mills Ltd v. Union of India, 1988 (36) ELT 565. The Division Bench granted the amendment but has referred the matter to the larger Bench.

(3.) . In the case of Amit Processors Pvt. Ltd. (supra), show causenotice dated 1/08/1978 was issued under Rule 10 of the Rules and no action as per the said notice was taken upto the month of June 1984. The Assistant Collector of Central Excise had passedan order on 29/07/1984 holding that the petitioners were liable to, pay additional excise duty and confirmed the notice issued under Rule 10. That order was challenged before this Court. The Court held that the action was initiated by issuing a notice under Rule 10(1) when the Rule was in force, but that action was not concluded as per Rule 10(2) before the Rule was omitted. There is no saving clause in the notification by which Rule 10 was omitted. Relying upon the decision of the Supreme Court in the case of M/ s. Rayala Corporation (P) Ltd. v. The Director of Enforcement, AIR 1970 SC 494, the Court negatived the contention that the provisions of Sec. 6 of the General Clauses Act will save the action of the Assistant Collector in spite of the omission of Rule 10.