Full Judgment Text
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PETITIONER:
ARVINDER SUBGH BAGGA
Vs.
RESPONDENT:
STATE OF U.P.
DATE OF JUDGMENT04/10/1994
BENCH:
MOHAN, S. (J)
BENCH:
MOHAN, S. (J)
MAJMUDAR S.B. (J)
CITATION:
1995 AIR 117 1994 SCC (6) 565
JT 1994 (6) 478 1994 SCALE (4)466
ACT:
HEADNOTE:
JUDGMENT:
The Judgement of the Court was delivered by
R.M. SAHAI, J.- The short question of law that arises for
consideration in this appeal directed against the judgment
and order of the Customs, Excise & Gold (Control) Appellate
Tribunal, New Delhi, is whether the classification and the
price list accepted by the Department and acted upon, found
subsequently to be erroneous, is to be applied prospectively
or retrospectively.
2. The appellant, a manufacturer of dyestuff, filed a price
list in Part IV pro forma as applicable for sales to related
persons. The price list showed various includible and
excludable expenses as well as assessable value as claimed
by the appellant. This was approved by the Department on 6-
12-1975 and the assessable value as declared was accepted.
The approval was to be effective from 1-10-1975. After
nearly a year the Assistant Collector issued a show-cause
notice requiring the appellant to show cause as to why the
net assessable value as per the method shown in the annexure
should not be revised and differential duty recovered from
the appellant. The reply of the appellant was not accepted
either by the Assistant Collector or by the Appellate
Collector or the Tribunal. In fact before the Tribunal it
was conceded on behalf of the appellant that the method for
determining the assessable value in the price list Submitted
by the appellant was not correct.
3. The order of the Tribunal was challenged and it was urged
that the classification and the price list submitted by the
appellant having been accepted and acted upon under Rule
173-C(2) of the Central Excise Rules, 1944 the Department
precluded the appellant from challenging it and,
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therefore, it is estopped from claiming that the appellant
was guilty of suppression of facts. The learned counsel
urged that the classification and the price list having been
accepted and acted upon, the Department was not justified in
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taking proceedings under Section 11-A of the Central Excises
& Salt Act, 1944. It was also urged that the Department
could not have changed its opinion and the law does not
contemplate issuing of any notice only because the
Department felt that a particular item was dutiable in
another entry. In the alternative the learned counsel
submitted that where the Department has been acting upon the
price list submitted by the appellant worked out in one
manner but the Department claims that it should be
calculated in a different manner then even if the
calculation resorted to by the Department is held to be
correct it should apply from the date of issue of notice and
not from the date when the price list was submitted.
Reliance for it was placed on the order passed by this Court
in the case of Collector of Central Excise v. Indian Oxygen
Ltd., Khardah
4. Since the appellant did not dispute that the method of
calculation of the duty by the Department was correct, the
submission of the learned counsel on lack of jurisdiction to
initiate proceedings is not necessary to be decided as the
power to issue show-cause notice vests even if the duty was
short-levied as a result of erroneous application of law.
However, once the Department accepted the price list, acted
upon it and the goods were cleared with the knowledge of the
Department, then in absence of any amendment in law or
judicial pronouncement the reclassification should be
effective from the date the Department issued the show-cause
notice. The reason for it is clearance with the knowledge
of the Department and no intention to evade payment of duty.
5. In the result, this appeal succeeds and is allowed in
part. The appellant is held liable to pay duty on the
dyestuffs manufactured by it in the manner calculated by the
Department from 16-10-1976, the date the show-cause notice
was issued to the appellant.
6. Parties shall bear their own costs.
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