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of <h1>Court quashes order, orders refund, awards counsel fees.</h1> The court allowed the writ petition, quashing the impugned order and directing the refund of amounts paid by the Company in liquidation to the Official ... Classification list - Samples - Demand Issues Involved:1. Validity of reopening assessments and issuing show cause notices.2. Legality of the show cause notice and resultant order.3. Validity of Section 33 of the Central Excises and Salt Act, 1944.4. Compliance with Rule 173B and Rule 9B of the Central Excise Rules, 1944.5. Legitimacy of the sample testing and the role of the Textile Commissioner.6. Violation of natural justice principles.7. Power to recall or review an approval under Rule 173B.8. Limitation and the survival of earlier show cause notices.Issue-wise Detailed Analysis:1. Validity of reopening assessments and issuing show cause notices:The petitioner was assessed to excise duty at a concessional rate under Notifications Nos. 226/77 and 301/79. These assessments were later reopened by show cause notices issued between 9-11-1977 and 24-2-1981, alleging that the drill manufactured did not conform to the specified notifications. The appeals against these orders were allowed, and the matter was remanded for fresh proceedings to determine eligibility for the concessional rate.2. Legality of the show cause notice and resultant order:The petitioner challenged the show cause notice dated 4-1-1982 and the resultant order as illegal. The court noted that the show cause notice was based on the Textile Commissioner's report, which was not legally permissible as the Textile Commissioner was not a designated excise officer under Rule 56 of the Central Excise Rules, 1944.3. Validity of Section 33 of the Central Excises and Salt Act, 1944:The petitioner initially sought to strike down Section 33 of the Act as unguided and arbitrary. However, this prayer was not pressed during the hearing, as the court had upheld the validity of Section 33 in an earlier writ petition (W.P.No. 5892/1986 dated 30th August, 1990).4. Compliance with Rule 173B and Rule 9B of the Central Excise Rules, 1944:Rule 173B requires the assessee to file a list of goods for approval by the proper officer. The court noted that once the list is approved, it cannot be recalled. Rule 9B allows for provisional assessment if the proper officer deems it necessary. The court found that the approval of the list under Rule 173B must be deemed final, and there was no provision to recall such approval.5. Legitimacy of the sample testing and the role of the Textile Commissioner:The court found that the Textile Commissioner was not a proper officer to conduct tests on samples as per Rule 56 and Section 12A of the Act. The sample tested by the Textile Commissioner in February 1980 could not form the basis for the show cause notice, making the resultant order invalid.6. Violation of natural justice principles:The court held that the petitioner was not given adequate opportunity to meet the case, as the basis for the show cause notice was a report from an unauthorized officer. This violated the principles of natural justice, rendering the show cause notice and the resultant order without jurisdiction.7. Power to recall or review an approval under Rule 173B:The court emphasized that the power to recall or review must be expressly conferred. Since Rule 173B did not provide for recalling an approval, the department lacked the authority to do so. The court cited the Supreme Court decision in Elson Machines Pvt. Ltd. v. Collector of Central Excise, which stated that there could be no estoppel against the law but did not imply a power to review an approval.8. Limitation and the survival of earlier show cause notices:The court did not delve deeply into the question of limitation but noted that the impugned order was based on a composite show cause notice issued in January 1981. Earlier show cause notices could not be relied upon after the orders based on them were set aside by the Appellate Authority.Conclusion:The writ petition was allowed, and the impugned order was quashed. The court directed that all amounts paid by the Company in liquidation be refunded to the Official Liquidator. The petitioner's counsel was awarded fees of Rs. 1000/-. The rule was made absolute with costs.
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