1. Appellants, M/s. Chokshi Tube Ltd., have filed this appeal to the Tribunal against Order-in-Appeal No. A-713/BD-198/83, dated 30-3-1983, passed by Shri B.K. Agarwal, Collector of Central Excise (Appeals), Bombay. By the said order, Asstt. Collector of Central Excise, Ahmedabad's order dated 14-9-1981 demanding Rs. 2,59,571.00 as duty from the appellants was upheld.2. For proper appreciation, history of the case is necessary. The appellants at their factory at Vatva Industrial Area, Ahmedabad had been manufacturing 'Stainless Steel Pipes & Tubes' since 1972 from "Stainless Steel Strips, Plates, Sheets etc. imported from abroad". On these imports, Customs and countervailing duty, as prescribed from time to time had already paid. The appellants claim that under bonafide impression that no excise duty was payable on pipes and tubes maunfactured from the imported stainless steel strips, plates and sheets on which countervailing duty had already been paid, they did not pay duty till March, 1975. After introduction of Tariff Item 68 in Central Excise Tariff from 1st March, 1975 covering all goods not elsewhere specified, the appellants felt that pipes and tubes manufactured by them would be liable to duty under Item 68 and approached the Central Excise authorities to issue a licence under Section 6 of the Central Excises and Salt Act, 1944 (hereinafter called the Act). The Superintendent of Central Excise by letter dated 3-6-1975 informed the appellants that stainless steel pipes and tubes fall under Item 26AA of the Central Excise Tariff, the appellants should clear the goods only on payment of duty as prescribed under that item and after complying with the rules and regulations. The Superintendent, Central Excise stopped the clearance of appellants' pipes and tubes, as he did not accept the appellants' plea that their manufactured product was eligible for exemption from Central Excise duty by virtue of Notification No. 69/73-C.E., dated 1-3-1973. Appellants approached the Appellate Collector of Central Excise, who by his order dated 26-3-1976 held that Superintendent, Central Excise's letter dated 3-6-1975 was neither an order nor a decision nor had the appellants submitted a classification list. The appellants should file classification list and file an appeal if the Asstt. Collector passes an appealable order.
3. In the meanwhile, the Asstt. Collector, Central Excise issued a Show Cause Notice dated 22-12-1975 alleging that the appellants had manufactured and cleared 2,51,571 metric tonnes of stainless steel tubes out of imported stainless steel strips, plates etc. during the period 1-3-1973 to 31-3-1975 without obtaining necessary licence under the Act and without payment of duty. The appellants were inter alia called upon to show cause to the Collector of Central Excise, Baroda why Central Excise duty due on the said goods at appropriate rates should not be recovered from the appellants. The appellants filed reply explaining that pipes and tubes maunfactured by them during the period were not liable to excise duty in view of certain exemption notifications. The Collector of Central Excise, Baroda (Shri K.S.Dilipsinhji) by his order-in-original dated 21-12-1978 negativated appellants' pleas and imposed penalty of Rs. 52,000/-, ordered confiscation of plant, machinery and building on a redemption fine of Rs. 50,000/- and about duty of excise he observed, "I do not pass any order with regard to payment of duty of excise on the stainless steel tubes removed by the company without payment of duty as I find that this matter is being handled by the concerned Assistant Collector, who should finalise it early." 4. The appellants filed an appeal against this order to the Central Board of Excise & Customs, who by its order passed on 6-12-1979 [Shri J. Datta, Member (J), C.B.E. & C.], reduced the penalty from Rs 52.000/- to Rs. 1,000/- and set aside the order of confiscation of plant, machinery and building. In the last sentence of the order, the Member directed the appellants to pay duty as may be assessed by the competent authority. The appellants did not file revision against this order to Central Government or challenge the order in any other manner.
The appellants by their representatives appeared before the Asstt.
Collector alongwith records a number of times, the appellants took-up various pleas before the Asstt. Collector denying their liability to pay duty. The Asst. Collector negativated all the pleas raised by the appellants and by order dated 14-9-1981 vide order-in-original No.45/MP/81, ordered the appellants to pay Rs. 2,59,571.00 as Central Excise duty for clearance of stainless steel pipes and tubes for the period 1-10-1972 to 31-5-1975. The order was upheld in appeal by Shri B. K. Agarwal, Collector, Central Excise (Appeals), Bombay by his order dated 30-3-1983 and hence this appeal to the Tribunal.
5. At the hearing, Shri R.K. Habbu, learned Counsel for the appellants made the following contentions: (i) no notice of demand under Rule 10 or Rule 10A was served on the appellants, the demand was, therefore, illegal ; (ii) Rule 10A under which, there was no time-limit was applicable only when Rule 10 was not applicable, in the appellants' case Rule 10 was applicable under which the time-limit was 3 months. The demand made from the appellants was patently hit by time bar ; (iii) notice dated 22-12-1975 was only a show cause notice calling upon the appellants to show cause why penalty should not be imposed for not taking out a licence. It could not under any circumstances by treated as a show cause notice under Rule 10 ; (iv) appellants' participation in proceedings before the Asstt.
Collector did not dispense with the requirements of show cause notice under Rule 10 which is mandatory. For non-compliance with this provision, the demand made from the appellants is without authority of law and in contravention of Article 265 of the Constitution of India ; (v) Additional duty (countervailing duty) under Section 2A of Indian Tariff Act, 1934, is nothing but Excise duty, the appellants should have been granted the benefit of notification No. 69/73-C.E., dated 1-3-1973, because on the raw material additional duty had been paid.
In any case, Notification No. 16/76-C.E., dated 7-2-1976 was clarificatory in nature and its benefit should have been given to the appellants regarding their manufacture. In the alternative, he submitted that the appellants ought to have been given the benefit of set off duty vide notification No. 75/67 ; (vi) even if show cause notice dated 22-12-1975 be treated as a notice of demand it was illegal because it did not specify the amount demanded and left it to be a matter of calculation.
In support of his arguments, Shri Habbu, learned Counsel for the appellants relied on N.B. Sanjana, Asstt. Collector of Central Excise, Bombay and Ors. v. the Elphinstone Spinning and Weaving Mills Co. Ltd., 1978 ELT (J 399) and J.B.A. Printing Inks Ltd. v. Union of India and Ors., 1980 ELT 121 (Bombay).
6. On behalf of the respondent, Shri A.K. Jain, Senior Departmental Representative submitted that on the facts and circumstances of the case, no further show cause notice to the appellants was necessary. He also submitted that countervailing duty and Excise duty are two different levies and the appellants could not at the material time claim benefit of exemption notification on the ground that c.v.d. for imported stainless steel strips, plates, sheets had been paid. He submitted that the demand made from the appellants was legal and justified. He also submitted that it was not necessary that show cause notice should contain/mention specific amount of duty demanded, If the basis on which calculation of demand could be made was there in the notice, it was sufficient compliance with the rules. In support of his contentions, he relied on : (i) N.S. Model Industries v. Union of India, reported in Tax Law Report 1977 NOC 31 ;Goodwil Rubber Works v. Collector of Central Excise, Cochin 1983 ECR 504 (D) (CEGAT) ; (iii) Hindustan Aluminium Corporation Ltd. v. Superintendent of Central Excise, Mirzapur and Ors.-1981 ELT 642 (D.) ; andJ.K. Steel Ltd. v. Union of India and Ors.,-197S E.L.T. (J 355).
7. We have carefully considered the arguments advanced by the parties.
The appellants' contention that no notice to show cause for the demand was served on the appellants cannot be accepted because it is admitted position that Assistant Collector of Central Excise, Ahmedabad had served notice dated 22-12-1975 on the appellants to show cause as to why for the period 31-3-1973 to 31-5-1975, Central Excise duty due on the goods at appropriate rate should not be recovered from the appellants. Shri Habbu's contention that this notice cannot be treated as a legal notice of demand cannot be accepted in view of pronouncement of the Supreme Court in J.K. Steel Ltd. v. Union of India and Ors., 1978 E.L.T. (J 355), wherein it has been held as follow : "But the contention of the assessee is that the demand having been made under Rule 9(2) and there being no indication in that demand that it was made under Rule 10, the Revenue cannot now change its position and justify the demand under Rule 10 at any rate by the time the Government amended the demand, the duty claimed became barred even under Rule 10. We are unable to accept this contention as correct. There is no dispute that the officer who made the demand was competent to make demands both under Rule 9(2) as well as under Rule 10." In view of the above, the mere fact that notice did not specify the correct rule would not make it illegal, if it is otherwise found to be in order. Besides, as would be shown later, it is not open to the appellants to raise this contention now. As to Sh. Habbu's contention that notice did not specify the specific amount and was, therefore, illegal and his reliance on a Single Judge judgment in Mis. J.B.A.Printing Inks Ltd. v. Union of India and Ors., 1980 ELT 121 (Bombay), it is sufficient to say that there is a Division Bench judgment of Delhi High Court in Hindustan Aluminium Corporation Ltd. v.Superintendent of Central Excise, Mirzapur and Ors., 1981 ELT 642 (Del), which after noticing and distinguishing the case relied on by Shri Habbu holds that notice on this account would not become illegal.
The requirements of specifying the amount is statutory one and must in all cases be followed but the absence of it would not make the notice bad. The two contentions advanced by Shri Habbu thus fail. Shri Habbu's contention that additional duty (Countervailing duty) and Excise duty are synonymous cannot be accepted. Merely because additional duty (c.v.d.) is quantified on the basis of excise duty would not make it excise duty. It still remains a duty of Customs. Shri Habbu's contention therefore that the appellants were eligible for exemption under notification No. 69/73-C.E., dated 1-3-1973 cannot be accepted.
There is another strong reason why contentions of Shri Habbu cannot be accepted. All the grounds challenged now urged by Shri Habbu were open to the appellants when Collector of Central Excise, Baroda (Shri K S.Dilipsinhji) passed his order dated 22-12-1978. A perusal of the order passed by the learned Collector shows that some of the grounds now urged were in fact urged before him and negatived. The findings of the Collector were upheld by the Board in its order dated 6-12-1979.
It is true that so far as the claim of duty is concerned, the Collector of Central Excise (Sh. K.S. Dilipsinhji) in his order dated 22-12-1978 did not pass any order with regard to payment of duty and said that the matter was being handled by the concerned Asstt. Collector, who was to finalise it early. If the Collector of Central Excise passed an order confirming the duty liability of the appellants for specified period and at the appropriate rate, in view of the Delhi High Court judgment referred to above, the amount of duty was only a matter of calculation.
The Central Board of Excise & Customs by its order dated 6-12-1979 had already directed the appellants to pay duty as might be assessed by the competent authority. It must be emphasised that all these orders were consequent to notice to show cause dated 22-12-1975 served on the appellants which we have found to be legal and in order.
The appellants did not challenge order of the Board though a revision before the Govt. of India or in any other manner. The order, therefore, became final. It is not open to the appellants to urge grounds piecemeal which could have been urged earlier and to challenge the findings contained in the order of the Collector of Central Excise (Shri K.S. Dilipsinhji) and that of the Member, C.B.E. & C. These findings have become past and closed. In view of this, we do not accepted the contention of the appellants that further show cause notice specifying the amount should have been served on the appellants and in absence of the same the demand is illegal. We do not also accept the appellants' contention that the demand is barred by limitation or that it offends Article 265 of the Constitution.
8. It is, however, noticed that notice to show cause dated 22-12-1975 calling upon the appellants to pay duty at appropriate rates was for goods removed between the period 31-3-1973 to 31-5-1975 but the order in original dated 14-9-1981 passed by the Asstt. Collector of Central Excise shows that duty demanded from the appellant is for the period 1-10-1972 to 31-5-1975. The demand of duty for the period 1-10-1972 to 30-3-1973 which was not mentioned in the notice to show cause dated 22-12-1975 would have to be excluded in computing the demand and demand from the appellants to that extent should be correspondingly reduced.
The demand from the appellants would be confined only to the period mentioned in the show cause notice i.e. 31-3-1973 to 31-5-1975. The appeal to this extent (1-10-1972 to 31-3-1973) and for this period would have to be allowed.
9. As a result of aforesaid discussion the demand of duty from the appellants for the period 1-10-1972 to 30-3-1973 is set aside and the demand for the period 3L-3-1975 to 31-5-1975 is upheld. The appellants shall pay the duty demanded for the period 31-3-1973 to 31-5-1975. With this modification the appeal is dismissed.