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CamlIn Private Ltd. Vs. Union of India and Another - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtMumbai High Court
Decided On
Case NumberMiscellaneous Petition No. 1184 of 1978
Judge
Reported in1982(10)ELT1(Bom)
ActsCentral Excise Act, 1944 - Sections 4 and 36
AppellantCamlIn Private Ltd.
RespondentUnion of India and Another
Excerpt:
- section 3: [s.b. mhase, d.s. bhosale & a.s. oka, jj] offences of atrocities - complaint under held, merely because the caste of the accused is not mentioned in the fir stating whether he belongs to scheduled caste or scheduled tribe, it cannot be a ground for quashing the complaint. after ascertaining the facts during he course of investigation it is always open to the investigating officer to record tht the accused either belongs to or does not belongs to schedule caste or scheduled tribe. after final opinion is formed, it is open to the court to either accept the same or take cognizance. even if the charge sheet is filed at the time of consideration of the charge, it si open to the accused to bring to the notice of the court that the materials do not show that the accused does not.....1. by this petition filed under article 226 of the constitution of india, the petitioners, who are manufacturing water proof drawing inks, have challenged the order passed by the assistant collector of central excise, respondent no. 2, holding that water proof drawing inks manufactured and cleared by the petitioners are correctly classifiable under the tariff item 14-i(5) of the central excise tariff and excise duty has been correctly paid by the petitioners under the said tariff item. the petitioners have further challenged the latter part of the order passed by respondent no. 2 rejecting their refund claim of rs. 77,434.43 p. filed by the petitioners in respect of the duty paid by them on their drawing inks under tariff item 14-i(5) for the period from 11-2-1966 to 2-2-1974.2. in order.....
Judgment:

1. By this petition filed under Article 226 of the Constitution of India, the petitioners, who are manufacturing water proof drawing inks, have challenged the order passed by the Assistant Collector of Central Excise, respondent No. 2, holding that water proof drawing inks manufactured and cleared by the petitioners are correctly classifiable under the Tariff Item 14-I(5) of the Central Excise Tariff and excise duty has been correctly paid by the petitioners under the said Tariff item. The petitioners have further challenged the latter part of the order passed by respondent No. 2 rejecting their refund claim of Rs. 77,434.43 P. filed by the petitioners in respect of the duty paid by them on their drawing inks under Tariff Item 14-I(5) for the period from 11-2-1966 to 2-2-1974.

2. In order to appreciate the contentions raised by the learned counsel Shri R.J. Joshi on behalf of the petitioners in this petition, few facts which lie within a narrow compass need to be referred to. The petitioners are a company incorporated under the provisions of the Companies Act 1 of 1956 and carrying on business inter alia of manufacturing water proof drawing inks. These inks are admittedly used for drawing black or colour drawings. On March 26th 1965 the Inspector of Central Excise in charge of Borosil Glass Works Ltd., Mondivita, Andheri, Bombay-59 drew samples of fountain pen ink, writing ink, rubber stamp pad ink and water proof drawing ink etc. at the petitioners' factory and sent them to the Chemical Examiner, New Customs House, Bombay for testing. According to the petitioners, after taking these samples, there was no further intimation from the Inspector. However, all of a sudden by a letter dated 5th February, 1966 the petitioners were informed that the Central Board of Excise and Customs had decided that water proof drawing ink is chargeable to duty under Item 14-I(5) of the Central Excise Tariff. The petitioners were requested to declare the stock of water proof drawing ink lying with them and the petitioners were further intimated that clearance of the said ink would be allowed only on payment of duty. It was further intimated to the petitioners that the petitioners should declare the figures of the said ink cleared by them on and after 15th January, 1966 for the purpose of recovery of duty from the said date, i.e. the date on which the Central Board of Excise and Customs passed the order, i.e. 15th January, 1966.

[Para Nos. are as given in the judgment] 5. By their letter dated 7th February, 1966 the petitioners informed the Inspector that the said decision of the Central Board of Excise and Customs was not acceptable to them and requested him to communicate to them the test report on the samples of water proof drawing ink drawn by him from their factory on 26th March, 1965. The petitioners also communicated to the Inspector that they would clear the water proof drawing ink from their factory on payment of duty under protest. It was further stated in the said letter that the petitioners had cleared 226.00 litres of the water proof drawing ink only from 15-1-1966 onwards.

6. On 11th February, 1966 a notice of demand under Rule 10-A of the Central Excise Rules, 1944 for payment of duty amounting to Rs. 178.75 P. on water proof drawing ink cleared by the petitioners was issued to the petitioners under Item 14-I(5) of the Central Excise Tariff. The petitioners continued to pay the duty under protest on water proof drawing ink cleared by them from their factory and protested again stating that water proof drawing ink was not chargeable to Central Excise duty. According to the petitioners, the components of the black drawing ink were carbon black, natural resins, preservatives (carbolic acid, phynol, thymol which are chemicals) and plasticisers. Carbon black is mixed in a solution of natural resins and/or plasticiser and preservatives are then added to the solution which is then thoroughly mixed while the components of coloured drawing inks are synthetic water soluble dyes, natural resins and preservatives. The synthetic water soluble dyes are mixed in a solution of natural resins and preservatives are then added to the solution which is thoroughly mixed.

7. The main contention of the petitioners is that water proof drawing ink is used by architects, engineers, artists etc. and is largely used by students and is of great demand in the various educational institutions. The said water proof drawing ink can by no stretch of imagination be considered as a pigment, colour or paint. The said water proof drawing ink cannot be and has not been popularly understood as pigment, colour or paint falling in the category under Item 14-I(5) of the Central Excise Tariff. The petitioners, therefore, made a representation on 25th July, 1966 to the Assistant Collector of Central Excise and Customs. The said representation contained full facts relating to water proof drawing ink and it was pointed out in the said representation that by no stretch of imagination can it ever be considered that water proof drawing ink is a pigment, colour or paint falling under Item 14-I(5) of the Central Excise Tariff.

8. The Assistant Collector of Central Excise and Customs by his order dated 8th September, 1970 stated that since black drawing ink and coloured drawing ink contained natural resins which act as binders, the product in question fell under Tariff Item 14-I(5) and the demand for Rs. 178.75 P. being not time barred under Rule 10-A of the Central Excise Rules, 1944, is correct and therefore, confirmed the same. Being aggrieved by the said order passed by the Assistant Collector of Central Excise, Bombay Division V, the petitioners preferred an appeal before the Collector of Central Excise, Bombay, on 14th November, 1970. In the appeal, the petitioners pointed out as to how their product could not come within the Tariff Item 14-I(5), i.e. pigment, colour or paint. The petitioners, therefore, prayed in their appeal that the order passed by the Assistant Collector of Central Excise and Customs be quashed and set aside and the consequential refund of the duty involved be given to them. The petitioners also prayed for a personal hearing before their appeal is disposed of. The Appellate Collector granted personal hearing to the petitioners and after hearing the petitioners fully, the appeal was allowed. The order of the Assistant Collector of Customs and Central Excise dated September 8, 1970 was set aside and it was further ordered that the petitioners shall be granted consequential relief. The Appellate Collector's order is to the following effect :-

'Order : Having regard to the facts and circumstances of the case, I set aside the order of the Assistant Collector of Central Excise, Bombay Division V and order the consequential order that the appellants shall be granted consequential relief.

Sd/-

(B.N. Rangwani)

Appellate Collector,

Central Excise, Bombay.'

9. On the basis of the Appellate Collector's order, the petitioners received directions from the Superintendent of Central Excise, Range No. 5, Division V, Bombay, on 7th September, 1974, requiring the petitioners to file separate classification list in respect of water proof drawing ink. Accordingly, on 8th October, 1974, the Assistant Collector enclosed classification/price list dated 20th September, 1974, duly approved as per the Memorandum appended to the same. This classification list was approved on the basis of the Appellate order dated 6th February, 1974, passed by the Appellate Collector and the said water proof drawing ink was accepted as being non-excisable. The petitioners, therefore, made an application for refund of the sum of Rs. 77,434.43 P. being the duty recovered and paid under protest for the period from 11-2-1966 to 2-2-1974. This application was dated 31st January, 1975.

11. The petitioners further contended in their petition that instead of receiving the refund as directed by the Appellate authority, the petitioners received a show cause notice dated 24th December, 1977, issued by the Assistant Collector of Central Excise calling upon the petitioners to show cause why the application for refund of duty ought not to be rejected. Among the requests made by the petitioners, that of personal hearing was granted to the petitioners on 14th March, 1978, at which the petitioners filed their written submissions. After hearing the petitioners, the Assistant Collector of Customs and Central Excise, Bombay Division K passed an order on 5th May, 1978 and held that water proof drawing ink were correctly classifiable under Tariff Item 14-I(5). He further held that the duty has been correctly paid by the petitioners under the said Tariff Item and rejected the refund claim of the petitioners for Rs. 77,434.43 P. filed by the petitioners in respect of the duty paid by them on the water proof drawing ink under Tariff Item 14-I(5) during the period from 11-2-1966 to 2-2-1974. He further held that the trade was also informed about the correct classification by issuing the necessary trade notice, viz. Collector Trade Notice No. 13(MP)/Paints & Varnish (3)/1966 dated 7th February, 1966 under which the trade was informed about the correct classification of water proof drawing inks under Tariff Item 14-I(5). On the interpretation made by the Assistant Collector, Central Excise, Bombay Division K, Bombay, the order passed by the Appellate Collector on 6th February, 1974 was over-ruled. This order passed by the Assistant Collector of Central Excise, Bombay Division K, Bombay, on 5th May, 1978 is challenged in this petition under Article 226 of the Constitution of India.

12. The learned counsel appearing for the petitioners Shri R.J. Joshi has made three or four submissions. According to him, the order passed by the Appellate authority on 6th February, 1974, was clear enough and was without any doubt whatsoever. The petitioners' appeal was allowed and the order of the Assistant Collector of Central Excise, Bombay Division V, Bombay, dated 8th September, 1970 holding that water proof black drawing ink as also coloured inks were chargeable under Tariff Item 14-I(5) was quashed and set aside and further granted consequential relief to the petitioners. The impugned order was entirely beyond the jurisdiction of respondent No. 2 in refusing to refund the amount of duty so paid and the respondent No. 2 has not only erred but has acted contrary to the directions issued by the Appellate authority. The learned counsel further urged that once the Appellate Collector had decided the classification that the petitioners' product in question is non-excisable, it was wholly erroneous on the part of the Assistant Collector to sit in appeal and over-rule the said decision of the Appellate Collector. According to the learned counsel, in the matter of classification, it is not the period which is relevant but what is relevant is the basic decision on the classification. The learned counsel further urged that there is no material change in the facts. No new facts have been brought to the notice of the Assistant Collector regarding the composition and the manufacturing process of the product in question nor has there been any change in the legislative policy so as to bring this product under any of the other Tariff items. Therefore, the decision given by the Appellate authority was not only binding on the Assistant Collector of Central Excise, Bombay Division K, Bombay, and ought to have been followed and even by way of consequential relief, the Assistant Collector ought to have granted the entire refund prayed for the petitioners.

13. In support of his contentions, the learned counsel relied upon an order passed by the Appellate Collector of Central Excise and Customs, Bombay, on 16th October, 1979 in respect of a subsequent demand notice issued by the excise authority for Rs. 34,000/-. The decision will be adverted to a little later.

14. The learned counsel further relied on a decision of a Division Bench of the Delhi High Court in J.K. Synthetics Ltd. and another v. Union of India reported in 1981 E.L.T. 328 (Del.) in support of his proposition that an order passed by the Appellate authority is final and conclusive and it was not open to the Central Excise authority to change their stand and put the assessee to avoidable inconvenience and harassment, if the position is exactly the same legally and factually as it was on an earlier occasion. The submission of the learned counsel was that if the drawing ink was held to be non-excisable for the period between 15-1-1966 to 1-2-1966, it cannot be said that in subsequent years when the petitioners have been paying the excise duty under protest, there was factually or legally any change in the circumstances so as to warrant the interpretation made by the learned Assistant Collector of Central Excise, Bombay Division K, Bombay, by his order dated 5th May, 1978. As against this, Mr. Chinoy who appears on behalf of the respondents supports the order of the learned Assistant Collector of Central Excise, Bombay Division K, Bombay, and vehemently argued that the Appellate order should be interpreted to be confined only to the period from 15th January, 1966 to 2nd February, 1966. According to him, the trade notice dated 7th February, 1966 under which the trade was informed about the correct classification of water proof drawing ink under Tariff Item 14-I(5) still held good. If at all, according to him, the petitioners were entitled to a refund, the petitioners were entitled to a refund of Rs. 178.75 P. but not for the refund of Rs. 77,434.43 P. which is the duty paid by the petitioners under protest for the period 11th February, 1976 to 2nd February, 1978.

15. It must be stated that all the contentions raised by the learned counsel for the petitioners have considerable force. That the Assistant Collector of Central Excise, Bombay Division K, Bombay, could not have set in appeal to overrule the decision of the Appellate Authority is now confirmed by the Appellate Court in a subsequent decision of the Appellate Collector, Central Excise and Customs, Bombay, on 16th October, 1979.

16. The Superintendent of Customs and Central Excise, Range V, Division V, Bombay, by his show cause notice dated 7th September, 1974 addressed to the petitioners had called upon them to pay the excise levy of Rs. 34,761.45 P. for 49,486 litres of drawing ink cleared during the period from February 1974 to December 1976. When the matter was carried to the Appellate Court, Central Excise, it was contended before the said Authority that since the issue of the Appellate order dated 7th February, 1974 there was no change in the Tariff Item under consideration and the description in Tariff Item 14-I(5) remains the same as when the Appellate Collector had passed the earlier order. It was further contended that admittedly this order regarding the classification of the petitioners' product in question was not challenged under Section 36 of the Central Excises and Salt Act, 1944 and it was, therefore, submitted that in the matter of classification, the order of the Competent Authority passed in appeal in revision cannot be interfered with by the departmental officers unless there is a statutory change by the Legislature which would justify this interference.

17. Accepting this submission as valid, the Appellate Collector has observed as follows in Para 3 of his order dated 16th October, 1979 :-

'I have gone through the appeal petition and the case records. Since the Appellants have taken up the question of applicability of the Appellate Collector's orders, in absence of any change either in their product or in the Tariff item, I do not propose to go into the merits of their classification once again. The Appellate Collector's order, which has decided the classification of their product, cannot be overruled by the Assistant Collector even if the order related to a particular period. In matters of classification, it is not the period which is relevant but the basic decision of classification. The Appellate Collector has already passed an order classifying the product of the appellants and I have no jurisdiction to interfere with that order. The Appellate Collector's order should have been sought to be reviewed under Section 36 if the Department did not agree with the findings of the Appellate Collector. This has obviously not been done, and the Appellate Collector's order in regard to the classification of the product, in view of there being no change either in the Tariff item or in the product, still holds good. The appeal is allowed.'

18. If there was any doubt of the interpretation placed on the earlier order of the Appellate Collector, this order of the Appellate Collector will set the doubt at rest. Mr. Chinoy's contention, that the earlier order should be read so as to confine it to the period in question, that is, between 15th January, 1966 to 1st February, 1966, cannot be obviously accepted in view of this stand adopted by the Appellate Collector of Central Excise and Customs.

19. There is no dispute and none has been raised on behalf of the Department in this hearing that the petitioners have changed the nature of their product in question or the components of their product water proof drawing ink so as to be liable to the levy of excise duty under Tariff Item 14-I(5). No fresh facts have been brought on record on behalf of the respondents. In fact, no affidavit on behalf of the respondent has been filed in this case. Secondly, on the question of classification, whether the product of the petitioners is liable to excise duty, no legislative change or amendment to Item No. 14-I(5) has been made so as to bring within its fold the said product of the petitioners has been brought to the notice of this Court.

20. Mr. Joshi, the learned counsel for the petitioners, has drawn my attention to section 36 of the Central Excises and Salt Act, 1944. The order passed in appeal under this section is subject to revision further under section 36 of the Act. Admittedly, the order passed by the Appellate authority on 7th February, 1974, has not been challenged in revision and, therefore, it has become final. This position is also not disputed by the learned counsel appearing for the respondents.

21. However, this is not all. What Mr. Chinoy contended is that the Appellate order dated 7th February, 1974 should be interpreted to be confined to duty paid by the petitioners only for the period between 15th January, 1966 to 1st February, 1966. According to the learned counsel, this decision of the Appellate Authority had no application to the subsequent duty paid even under protest by the petitioners for the period from 11th February, 1966 to 2nd February, 1974. The learned counsel for the respondents cannot be said to be correct in view of what I have observed earlier. As stated earlier, the respondents have not challenged that the product manufactured by the petitioners on which duty has been paid for the period between 11th February, 1966 and 2nd February, 1974 is different then the one on which duty was paid for the period from 15th January, 1966 to 1st February, 1966. The respondents have also not disputed that there has been any change in the legislative policy so as to make the said product of the petitioners liable to levy of Central excise for the period in question. The learned counsel, Mr. Joshi, for the petitioners is on much stronger ground when he placed reliance on the following observation of the Division Bench of the Delhi High Court in J.K. Synthetics Ltd. and another v. Union of India and others (supra) :-

'An authority can depart from his earlier stand only for cogent reasons, such as fresh facts are brought on record or the process of manufacture has changed or the relevant Tariff entry has undergone modification or subsequent to the earlier decision, there has been a pronouncement of a High Court or the Supreme Court which necessitates the reconsideration of the issue.'

He has also further relied on the observation of the same Division Bench which is to the following effect :-

'An order passed by a Court of law or revisionary authority is final and conclusive qua the parties. Therefore, it is not open for the Central Excise Authorities to change their stand capriciously and put the assessee to avoidable inconvenience and harassment, if the position is exactly the same legally and factually as it was on an earlier occasion.'

22. The question that fell for consideration before the Division Bench of the Delhi High Court was posed by Their Lordships as follows :-

'Whether in the case of crimped yarn the duty is payable at the stage when the single ply yarn was produced or whether it is payable at the stage when the crimped yarn is removed from the factory ?'

This question was considered by the Central Government in its revisionary order passed on 26th May, 1972 and it was held by the Central Government as follows :-

'Regarding the main issue that the duty is leviable at the single yarn stage and it is only deferred to the time of clearance the Government of India observe that it is a well-established principle that while legally the goods become liable to duty on production, the rules provided that the date of determination of duty is the date of removal of goods from the factory. This is evident not only from Section 4 of the Act which requires the assessable value to be determined as at the time of removal of goods, but also from Rules 9 & 9A which deal with the clearance of goods from the place of production and the determination of the rate of duty and valuation..........

Crimped yarn being yarn falls under Item 18 itself, and is therefore, assessable in the same manner as the single straight yarn, at the time of clearance from the factory on the basis of the denier of the yarn in the form it is presented for clearance. And the denierage of such year has to be determined according to the standard methods available. There is no stipulation in these methods that in the case of crimped yarn, either single or plied yarn, this denierage would be the denier age of the single yarn.'

On the basis of this decision of the Central Government in its revisionary order, the petitioners were entitled to refund of a huge amount of Rupees Two Crores and odd in respect of excess excise duty collected from the petitioners for different periods from May 1964 to June 1972. One of the principle grievance of the petitioners in their petition was the levying of such a huge amount of excise duty claimed by the petitioners. The Assistant Collector of Customs & Central Excise by his letter dated 3rd March, 1973 informed the petitioners as follows :-

'It has been decided that the assessment of crimped yarn would not be on the basis of the resultant denier of crimped yarn but on the basis of the denier of the single basic yarn used for crimping. You are, therefore, directed that assessment be made accordingly with immediate effect.'

The contention raised by the petitioners, therefore, was that in spite of the Government of India's revisional order by which the Government of India accepted the case of the petitioners, the Assistant Collector of Central Excise demanded practically on the same basis and on the basis of the earlier order the excise duty which has been set aside by the Revisional Authority. After receipt of the said letter of the Assistant Collector dated 3rd March, 1973, the petitioners lodged a protest to the Assistant Collector of Central Excise. This order of the Assistant Collector of Central Excise was confirmed by the Collector of Central Excise on 9th March, 1973. Being aggrieved by the said orders passed by the Assistant Collector and Collector of Central Excise, the petitioners approached the Delhi High Court under Article 227(1) of the Constitution of India. It was contended on behalf of the petitioners that the petitioners were not only entitled to refund of excise duty collected and directed to be refunded but also to an order restraining the respondents from enforcing a different basis of levy for the subsequent periods.

23. In paragraphs 13 to 18, the Division Bench of the Delhi High Court has exhaustively dealt with important issues which are of far reaching consequences. Though it was held by the Division Bench of the Delhi High Court after a survey of English and Indian decisions that the doctrine of res judicata or estoppel will not apply in matters of this kind, meaning thereby levy of Central Excise the view taken by the authorities such as the assessing or appellate or revisional authority or even the High Court in respect of any one assessment year period will not be final and conclusive for subsequent periods but such earlier decision will be a cogent factor in the determination of the same point in the following year. According to the Division Bench of the Delhi High Court, this rule has been approved in a number of decisions of the Supreme Court, mainly while dealing with an argument that decisions on questions of fact concluded by a decision for an earlier assessment year could not be reopened in a subsequent year. The Division Bench of the Delhi High Court quoted number of the Supreme Court decisions to the effect that the doctrine of res judicata or estoppel would not apply and the finding of facts in one year would not be good and cogent evidence in subsequent years, after referring to a decision of Chandrachud J. (as His Lordship then was) in Karsendas Ranchoddas, : [1972]83ITR256(Bom) , wherein His Lordship observed that the Tribunal 'in failing to consider the orders of assessment relating to subsequent years had ignored good and cogent evidence' and so its finding could not be accepted. In other words, these decisions import into the rule of non-applicability of the principles of res judicata and estoppel a limitation that while the earlier decision is not conclusive or immutable, it can be ignored or brushed aside or departed from only for good and cogent reasons.

24. In paragraph 15 of the said judgment of the Division Bench of the Delhi High Court dwelt on the limitation and non-applicability of the principles of res judicata and estoppel and quoted :-

'For example if the facts are different or if further and fresh facts are brought on record or if the process of manufacture has changed or if the relevant entries in the tariff have undergone a modification or if, subsequent to the earlier decision there has been the pronouncement of a High Court or the Supreme Court which necessitates reconsideration of the issue, it can hardly be doubted that the department can take a different view and have the matter agitated right upto the Supreme Court, if necessary. But when there is no change at all and when the position is exactly the same, legally and factually, as it was on the earlier occasion then we think that the department should be restrained from capriciously changing its stand and inflicting unnecessary proceedings and hardship upon assessees.'

The Division Bench of the Delhi High Court drew considerable support for their decision from a ruling of this Court in H.A. Shah and Co. v. CIT, : [1956]30ITR618(Bom) . In that decision the learned late Chagla, C.J. had pointed out that the principle of res judicata applied in courts in order to give finality to litigation and to confer the characteristic of conclusiveness to the decision of a court but observed, referring to the observation in Commissioner of Inland Revenue v. Sneath, 193 17 Tax Case 149, that the above principle would not apply to income-tax assessments where each year the authorities were considering an entirely new case. After referring to the Madras Full Bench and other decisions of the Madras, Patna, Nagpur and Allahabad High Courts and outlining the circumstances in which income-tax authorities could reopen and depart from their earlier decisions, the learned Chief Justice remarked that it was not strictly necessary for the case before them to consider what the position of a High Court decision was in regard to res judicata, for that principle would not be applicable to the decisions of the Income-tax Appellate Tribunal and other income-tax authorities. After referring to these authorities, the learned late Chagla, C.J., posed the following question :-

'Can it be said that because the principle of res judicata does not apply, an Income-tax Authority is entitled to go back upon a finding given in an earlier decision without any limitation whatsoever ?'

25. The learned late Chagla, C.J., further observed,

'.......Even though he principle of res judicata may not apply, even though there may be no estoppel by record, it is very desirable that there should be finality and certainty in all litigations including litigations arising out of Income-tax Act. It is not a very satisfactory thing that an assessee should feel a grievance that one Tribunal came to one conclusion and another Tribunal came to a different conclusion and the two conclusions are entirely inconsistent with one another. Therefore, the second Tribunal must be satisfied that the circumstances are such as to justify it in departing from the ordinary principles which apply to all Tribunals to try and give as far as possible a finality and a conclusiveness to the decision arrived at..........

The effect of revising this decision should not lead to injustice and the court must always be anxious to avoid injustice being done to the assessee.'

In view of these findings, the Division Bench of the Delhi High Court allowed the writ petition filed by the petitioners and directed the respondents to refund the balance amount in full.

26. At the cost of repetition, I may observe that this decision of the Division Bench of the Delhi High Court applies to this case on all fours in the context of fact of the present case. The learned counsel appearing for the respondents has not drawn my attention to any change of facts in the present case nor has he justified the fact that the earlier decision of the Assistant Collector, dated 6-2-1974 was valid. The Assistant Collector has only observed in his judgment and order that the earlier decision of the Assistant Collector, dated 6th February, 1974 pertained to the demand notice issued for the period 15th January, 1966 to 1st February, 1966 and has no bearing on this matter. The Assistant Collector has given no other reasons in his order except that the earlier Appellate order applied only to the demand notice issued for the period from 15th January, 1966 to 1st February, 1966. The petitioners' counsel has further contended that even after 6th February, 1974 the respondents themselves have approved the classification on the basis of the Appellate Collector's order on the understanding that water proof drawing ink was non-excisable and even though respondent No. 2 issued a show cause notice to the petitioners for the subsequent period, the same has been set aside by the Appellate Collector by his order dated 16th October, 1979.

27. For the reasons stated above, the order issued by the Assistant Collector of Central Excise, Bombay Division K, Bombay, on dated 5th May, 1978 is hereby quashed and set aside. It is held that the petitioners are entitled to the refund claim for an amount of Rs. 77,434.43 P. filed by the petitioners in respect of the excise duty paid by them on their water proof drawing ink under Tariff Item 14-I(5), for the period from 11th February, 1966 to 2nd February, 1974. The respondents are directed to refund the amount of Rs. 77,434.43 P. within a period of six weeks from today to the petitioners. The petition is, therefore, allowed and rule is made absolute with costs.


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