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Collector of Central Excise Vs. Guest Keen Williams Ltd. - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1985)(21)ELT182Tri(Chennai)
AppellantCollector of Central Excise
RespondentGuest Keen Williams Ltd.
Excerpt:
.....every year, so as to facilitate review, if need be. basing on this appellants filed a consolidated refund claim dated 27-3-1981 for the period january, 1976 to september, 1980. the assistant collector without going into the quantum of refund claim once again examined the merits and concluded that the packing charges are includible in the assessable value, and as such rejected the refund claim as in-admissible." it is to be noted that the respondent had been protesting against inclusion of packing charges in the assessable value of the goods since 17-6-1975. we note that by his letter no. accts. 1100/75, dated 17-6-1975, the respondent has dwelt at length on the illegality of inclusion of packing charges and stated inter alia, "in view of our note in all the price lists that packing.....
Judgment:
1. This appeal has been filed by the Collector of Central Excise, Bangalore against the order of the Collector (Appeals), referred to supra, by which the Collector (Appeals) has set aside the order C. No.V/28A/18/37/81, dated 27-9-1982 passed by the Assistant Collector of Central Excise, Bangalore I Division rejecting a claim dated 27-3-1981 for refund for Rs. 1,39,095.60 filed by M/s. Guest Keen Williams Ltd., the respondent herein. In the appeal it is contended that the earlier order No. V/28A/17/3/75-Vol.-II, dated 26-9-1980 passed by the then Assistant Collector of Central Excise, Bangalore I Division was neither a speaking order nor any points of law were discussed and as such did not merit consideration and it did not preclude the adjudicating authority to reopen the case at the time of refund and clarify the stand of the department with regard to the assessability of duty on packing charges.

2. The S.D.R. submitted that by these two so-called orders dated 23-2-1980 and 26-9-1980 the then Assistant Collector of Central Excise, Bangalore Division had not taken into account the provisions of amended Section 4 of the Act which had come into force from 10-10-1975 and had gone by a Trade Notice issued in April 1970 in terms of unamended section. In processing the claim of the respondent, the successor A.C.took note of the amended provisions of law and found that the refund is not maintainable in terms of law. The A.C. of Central Excise has to be satisfied before accepting a claim for refund in terms of Section 11B(2) of the Act. Such a satisfaction is not obviously possible in the light of the appellate order as in terms of the provisions of the Act and law. Therefore, he urged that the present order of the Assistant Collector dated 26-9-1980 is a proper order. He also submitted that the earlier letter No. V/28A/17/3/75 Vol. If, dated 26-9-1980 is not one of reasoning. It was, therefore, open to the second Assistant Collector to have examined the claim on merits. He also referred to the decision of the Delhi High Court in the case of Bawa Potteries v. Union of India-1981 E.L.T. 114 (Del.)-wherein the Court has held that in cases of assessment there is limited power of review.

3. On behalf of the respondent it was submitted that the question of assessment had been concluded by the order of the A.C. dated 26-9-1980; the merits of classification cannot, therefore, be reopened; the passing of a voucher for refund is a consequence to an earlier order of the A.C. It is not open to the second A.C. to review the order passed by the first A.C.4. To appreciate the legal points involved in this case, it is useful to set out the facts relating to issue of more than one order in the present case as set out in the order of the Collector (Appeals) : "Appellants manufacture 'Electrical Stampings and Laminations falling under T.I. No. 28A. These excisable goods are assessable on ad valorem basis and hence, appellants filed price lists wherein ex-factory prices and packing charges were shown separately. In this order-in-original C. No. V/ 28A/17/3/75, dated 17-2-1976, Assistant Collector held that the excisable goods in question are normally delivered only after packing and such packing is included in the price; and as such the packing charges are includible in the assessable value. When the matter was taken up in appeal, Appellate Collector, Central Excise, Madras, in his order No. 321/79 from file A. No. 68/76/C. No. V/28A/4/76, dated 28-2-1979 set aside the order inasmuch as it was submitted that normally the impugned excisable goods were delivered in naked condition (as seen from the 1975 figures, wherein cut of 6000 tonnes only about 2000 tonnes (33.3%) were despatched in packed condition). However, under this order Assistant Collector was permitted to decide the issue afresh, after examining the facts, Assistant Collector after re-comideration by his order C. No. V/28A/17/3/75 Vol. II, dated 23-2-1980 held that there were substantial sales in loose condition and as such dropped further proceedings for inclusion of packing charges in assessable value. By order C. No. V/28A/17/3/75 Vol. II, dated 26-9-1980 Assistant Collector informed the appellants that exclusion of packing charges from the assessable value had been permitted only when substantial sales of the impugned excisable goods were effected in unpacked condition. Appellants were, therefore, directed to furnish a statement showing the total quantity of electrical stampings and laminations cleared in packed as well as in loose condition every year, so as to facilitate review, if need be. Basing on this appellants filed a consolidated refund claim dated 27-3-1981 for the period January, 1976 to September, 1980. The Assistant Collector without going into the quantum of refund claim once again examined the merits and concluded that the packing charges are includible in the assessable value, and as such rejected the refund claim as in-admissible." It is to be noted that the respondent had been protesting against inclusion of packing charges in the assessable value of the goods since 17-6-1975. We note that by his letter No. Accts. 1100/75, dated 17-6-1975, the respondent has dwelt at length on the illegality of inclusion of packing charges and stated inter alia, "in view of our note in all the price lists that packing charges is not excisable and that we are paying the same under 'protest', we should be grateful if this letter is treated as our claim for refund of excise duty paid on packing charges.

We shall also be grateful if you would kindly treat all excise duty paid on packing charges in future as well as payment 'UNDER PROTESTS In the order dated 17-2-1976 the then A.C. held that packing charges were to be included in the assessable value. By his order dated 28-2-1979 the Appellate Collector noted that, "the products in question are also delivered in naked condition without packing... It would, therefore, appear that the products are normally delivered in naked condition. This stand is contrary to the finding of the Assistant Collector. It is, therefore, not clear what the facts are. I, therefore, set aside the order of the Assistant Collector without prejudice to his re-adjudicating the case after going into the facts and meeting the ends of natural justice." The order dated 23-2-1980 of the A.C. is in pursuance of this order of the Appellate Collector. In that order the Assistant Collector, "concede(s) that no duty on packing charges should be collected from the respondent...as there was substantial sale of their products in loose condition." He, therefore, dropped further proceedings. By a further order dated 26-9-1980 the Assistant Collector stated, "I accede to the request of M/s. Guest Keen Williams, Bangalore and allow exemption from payment of duty on packing charges in terms of Collector's Trade Notice No. 58/70 dated 17-4-1970. However, this order will automatically cease, when substantial sales of such goods are made in packed condition or any further amendments are made in this regard." It is unfortunate that in the order dated 23-2-1980 the then A.C. noted that he was dropping further proceedings in this regard. What he had before him was a protest from the respondent about inclusion of packing charges. He should have, therefore, directed his office to finalise the assessments. This was, however, not done. But referring to the order dated 26-9-1980 the respondent filed a claim for refund which is the subject matter of the present proceedings before us. In the grounds of refund it is specifically stated that the A. C. having decided that no duty is payable on packing charges, claim for refund for the period January, 1976 to 30th September, 1980 is being made. While considering this application the second A.C. rejected it by his order dated 27-9-1982.

5. From the above it is clear that the protest of the respondent against inclusion of packing charges had been decided in his favour to some extent by the Appellate Collector and finally by the A.C. in February/September, 1980. It was not really necessary for the respondent to file a separate claim for refund in pursuance of this decision. However, their having filed one should not prejudice his position as the claim is really in continuation of the protest filed in 1975. We would, therefore, consider that the merits of the case had been concluded at the latest by September, 1980; it would not be open to another A.C. of the same geographical jursidiction to take note of the fact that the earlier order was issued without reference to the amended provisions of law (which existed even when the first order was issued) and reject a claim for refund on the plea that the order of the first A.C. is wrong. In fact, the order of the A.C. happened to be a bland one because of the background which is contained in the earlier letter of protest of the party and the finding in his favour by the Appellate Collector in a half hearted way and a clear finding in his favour by the first A.C. We, therefore, agree with the Collector of Central Excise (Appeals) that the second order of the A.C. dated 27-9-1982 is really a review of an order of his predecessor which he is not competent to do so.

6. The reference to the decision of the Delhi High Court in the Bawa Potteries case is of no assistance wherein the High Court was interpretting the powers for issue of a less charge demand after an assessment has been completed by the proper officer. In that context the Court had noted that a limited power of review is built into the Act because of the provisions of Section 11 A. This does not mean that where a matter has been concluded by a formal and definitive order of an A.C., it could be reviewed by his successor because the former did not interpret the provisions of law correctly.

7. In the result the appeal is dismissed. The department is directed to grant consequential relief as contained in the order of the Collector (Appeals), within three months from the date of receipt of this order.


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