1. The appellants are aggrieved against the impugned order in which the Collector, on review of the Asstt. Collector's order, has held that tinned trimmings were classifiable as cuttings under item 28 of the Central Excise Tarriff and confirmed the demand for duty on 29.32 M.T.of tinned trimmings cleared by the appellants during 1-4-79 to 31-3-80.
For ease of reference, the said tariff item is reproduced below :- "28. Tin plate and tinned, lacquered or varnished sheets including tin taggers and cuttings of such plates, sheets or taggers- (1) Tin plate and tinned sheets including tin taggers and cuttings of such plates, sheets or taggers (2) Lacquered sheets, varnished sheets, including cuttings of lacquered sheets and varnished sheets." 2. During the hearing before us today, the appellant's pleas were fourfold :- (1) The goods were trimmings which arose during the process of dressing of tinned sheets. They were not cuttings within the meaning of the tariff item. They were cleared in press-baled condition and were meant first for detinning and thereafter for use as melting scrap. On our query, the appellants stated that there were no standard sizes for cuttings and that no definition of "cuttings" was available from trade parlance or in I.S.I. publications. We were also informed that trimmings were sold for a price of about Rs. 3,800/- per M.T. as against the price of Rs. 8,000/- to 9,000/- per M.T. for tinned sheets and that from a tonne of trimmings about 14 to 15 kgs. of tin was recovered which was a highly valuable metal.
(2) The Central Board of Excise and Customs had, in their letter dated 29-8-60, instructed all Collectors that trimmings (narrow width cuttings of tinned sheets having a width of less than 5 cms.) cleared in press-baled condition were not excisable under item 28 and should not be charged to duty. The past assessment practice was based on this letter of the Board. As late as on 31-1-81, the Asstt.
Collector held the trimmings as falling under item 28 and not under item 68 and being free of duty under the former. Accordingly, the Asstt. Collector dropped the demand for the period 1-4.79 to 31-3-80. Still later, on 22-9-81, the Appellate Collector, while deciding the appellants' appeal in respect of another demand for the earlier period 1-3-75 to 31-3-79, held that press-baled trimmings were melting scrap (falling under item 26 of the tariff) and not tinned cuttings falling under item 28.
(3) The Collector was not empowered to change an established classification without cogent reasons [1981 E.L.T. 328 (Delhi)].
(4) The show cause notice dated 22-6-81 issued for reviewing the Asstt. Collector's order was bad in law as it did not specify the amount of the demand for duty [1980 E.L.T. 121 (Bombay)]. Further, the impugned order quantified the amount at Rs. 24,103.80 but the Collector increased it arbitrarily to Rs. 84,761.60 basic+Rs. 4,238.08 special excise by issue of a corrigendum dated 6-10-82.
3. The Department's representative stated that the so called trimmings were nothing but cuttings which were specifically included in item 28, that there was no notification which gave full exemption to such trimmings, that the Board's letter dated 29-8-60 had no statutory force and it was formally withdrawn in 1982, that non-indication of the amount of duty did not make the show cause notice invalid [1981 E.L.T.642 (Delhi)] and that the corrigendum did nothing more than correcting an earlier calculation mistake.
4. We have given an earnest consideration to the matter. The trimmings are narrow width cuttings which arise when edges of tinned sheets are cut in order to obtain required size sheets. Tariff item 28 specifically covers cuttings. The appellants have informed us that there are no standard sizes for cuttings nor is there any definition available in I.S.I. books or in commercial parlance. In such a situation, the expression "cuttings" must be given its natural meaning as commonly understood, that is, smaller pieces cut from larger pieces.
The appellants would like us to believe that cuttings from middle portions of sheets are "cuttings" but edge-cuttings are not "cuttings" and are trimmings. We find no support or authority for such a distinction. We agree with the Collector that the so called trimmings or edge-cuttings are "cuttings" within the meaning of tariff item No.28. According to the price data given to us, these edge-cuttings command a substantial value and are regularly bought and sold. They cannot, therefore, be regarded as a waste or rubbish. Further, the tinned trimmings or cuttings cannot be straightaway used as melting scrap. They must be detinned first. For that reason, their classification as melting scrap is not correct. Item 28 which specifically covers cuttings of tinned sheets is the natural and correct classification for them.
5. As regards the Board's letter dated 29-8-60, it was an internal communication of the Department addressed to all Collectors. It was not meant for the public. No trade notice or public notice has been brought to our notice which could be cited as having given an assurance or promise of allowing tinned trimmings a duty free clearance under item 28. There was no statutory notification giving any such exemption. The Board's letter could not take the place of a statutory notification and it could not override the statutory tariff. Being an inter-departmental communication, it could be withdrawn at any time and it was in fact withdrawn in 1982. We agree with the Collector that the appellants are not entitled to rely on such a communication against the statutory tariff.
6. We find no force in the legal objection of the appellants that the Collector could not change an established assessment practice. No assessment practice can claim an eternal sanctity. The Collector was the rightful authority under Section 35A of the Central Excises and Salt Act, 1944 for reviewing the orders of his subordinate functionaries. In the same judgment as relied on by the appellants, the Delhi High Court has held as under (vide the head notes) :- The principle of res judicata or estoppel is not applicable to tax matters, thus the view taken by the assessee or appellate, revisional authority or even the High Court in respect of any one assessment period will not be final and conclusive for subsequent assessment period but such earlier decisions should be a cogent factor in the determination of the same point in subsequent assessment period." "Natural justice-Guidelines for revising the earlier decisions by Appellate and revisionary authorities-Sections 35, 35A & 36-The rule of natural justice does not allow the same authority or one subordinate to him to revise his earlier views arbitrarily. If the original decision taken by an assessing authority is wrong, it is open to the higher authorities to revise or review such decision under the Act and to set out the correct position. But, if this has not been done, or if the revisional authority has taken a view in favour of the assessee for an earlier period fresh proceedings cannot be launched against the assessee merely because the Deptt.
later thinks that the previous decision was untenable or a fresh decision should be obtained. In such cases, the Deptt. would still have the remedy of enunciating its views in another cases where its hands are not so tied, and eventually the High Court or the Supreme Court approves its views that would enable the Deptt. to apply those views even in cases where a different view was taken earlier. This will neither prejudice the interests of the Department nor the assessee but would be a harmonious reconciliation between the two well established positions." The Collector substantially complied with the above guidelines. He initiated review proceedings for a different period (1-4-79 to 31-3-80). No authority of equal or higher status had earlier passed an order for that period in respect of the appellants. He issued a show cause notice and heard the appellants and then passed the impugned order giving cogent reasons, namely, that the goods were specifically mentioned in item 28, that there was no notification fully exempting the goods and that the Board's letter was not statutorily binding and it could not over-ride the tariff. We can hardly find fault with his reasoning.
7. As regards the controversy regarding the amount of the demand, we agree with the Department's representative that in view of the later Delhi High Court judgment (1981 E.L.T. 642), mere non-indication of the amount could not invalidate the show cause notice. Further, in this case, the show cause notice clearly mentioned the three material factors-the period of the demand (1-4-79 to 31-3-80), the quantity of the goods involved (96.32 M.T.) and the rate of duty applicable (as under item 28 of the tariff). With this information specified, calculation of the demand amount was just a matter of simple arithmatical calculation. As such, the appellants can hardly claim with fairness that they were left in uncertainty in regard to the size of their liability. As regards increase in the amount of the demand through a corrigendum, when the calculation mistake involved in the earlier amount was explained to the appellants, they did not seriously press for this objection.
8. Accordingly, we hold that the subject edge-cuttings or trimmings of tinned sheets were correctly assessed by the Collector under the specific tariff item No. 28. We, therefore, reject this appeal.
However, we direct that set off of duty paid on uncoated steel sheets in terms of exemption notification No. 48/70-CE, dated 1-3-70, unless already granted to the appellants in some form or the other, should be given to them.