1. The revision application filed before the Government which on transfer is being treated as an appeal.
The appellants inter alia manufacture copper and copper alloy castings and aluminium castings. Prior to 30-7-1976 the appellants had been filing classification lists from time to time classifying the items under tariff item 26A(ia) and 27-a(ii) respectively. The residuary Tariff Item 68 came into effect from 1-3-1975. The appellants continued to file the classification lists under Tariff Item 26A(ia) and 27-a(ii) respectively. The appellants also state that their products were entitled to exemption under notifications 119/76 and 77/72. The classification lists filed by the appellants have been approving and their products were declared subject to "Nil Duty". During the last week of July, 1976 the appellants received a letter from the Superintendent Central Excise Range-Ill, Division-IV, Bombay calling upon by them to file classification list under Tariff Item 68. The Assistant Collector passed an order on 2-8-1976 confirming the letter of the Superintendent. The appellant preferred an appeal. While the same was pending on 28-10-1976 a show cause notice was sent to the appellants demanding a sum of Rs. 85,539.09 being excise duty payable for the period 1-3-1975 to 31-7-1976. On 4-12-1976 the Appellate Collector passed an order setting aside the order of the Assistant Collector dated 2-8-1976. The appellants wrote to the Assistant Collector on 11-12-1976 intimating the result of the appeal. The Assistant Collector ignored the submissions and confirmed the demand on 21-7-1977. Even though the appellants referred to the orders of the Appellate Collector, Assistant Collector did not advert to the circumstances and passed orders. There was an appeal to the Appellate Collector who by his order dated 25-7-1977 passed the impugned order.
The appellants have preferred this revision petition against the Appellate Collector's decision. It is pointed out that the Assistant Collector had no jurisdiction to ignore the orders of the Appellate Collector dated 4-12-1976.
2. S.N. Parikh the learned counsel for the appellants argued that the Assistant Collector and Appellate Collector have failed to take into consideration the earlier order which was relevant and rendered the subsequent order void ab-initio. He also pointed out that the appellants were not carrying on any manufacturing activity. The castings came out after moulding. The appellants were only machining and rough polishing the items. The manufacture was not complete. The semi-finished castings were sold for further processing. He also relied on the ruling reported in 1983 E.L.T. page 17 (Tata Yodogwa Ltd., assistant Collector Excise, Jamshedpur) 1983 E.L.T. 1113 (Tata Iron and Steel Co. Ltd., Jamshedpur v. Collector of Customs)E.L.T.-1122 (Tata Engine and Locomotive Co. Ltd., Bombay v. Assistant Collector of Customs, Bombay).
3. Shri S.N. Khanna, J.D.R. appearing for the department pointed out that there was no illegality because the earlier order of the Assistant Collector did not contain any demand. He argued that the demand raised cannot be impeached. He also argued that the appellants were engaged in a manufacturing activity.
4. We are of the view that the impugned order has to be set aside. From the narration of the facts, it is manifest that the classification lists filed by the appellants have been approved and only in July, 1976 the Department called upon the appellants to file the classification list under T.I. 68. It is also significant to note that the order of the Assistant Collector confirming the directions of the Superintendent was taken up on appeal to the Appellate Collector who by his order dated 4-12-1976 set aside the directions and held that the two products were correctly classified under Tariff Item 26 A(ia) and 27-a(ii).
Thus, there was a valid order in force. The subsequent demand cannot stand by itself. It is pertinently pointed out by the learned counsel for appellants that the demand was for the period 1-3-1975 to 31-7-1976. When the basis of the classification has been set aside, the consequential demand raised cannot be sustained. It is also important to note that the classification lists for the period 1-3-1975 to 31-7-1976 were accepted by the department. The order of the Assistant Collector dated 4-12-1976 is therefore not valid. The Appellate Collector cannot sit in judgment or revise the orders of another Appellate Collector regarding the same matter in issue. In view of this finding the impugned order is liable to be set aside. We are not giving any finding as to the nature of the activity carried on by the appellants, as it is not necessary for the purpose of this appeal to canvas the merits of such a contention. In view of our finding as to the sustain-ability of the impugned order, we allow the appeal and set aside the orders of the authorities below.