Retrospective excise amendment did not displace Cotspun rule on approved classification lists; issue sent to larger bench.

The amendment to Section 11A of the Central Excise Act, 1944 was considered against the earlier Constitution Bench rule in Cotspun that duty levied on an approved classification list was not a short levy and differential duty could not be recovered under Rule 10. The Court noted the retrospective amendment by the Finance Act, 2000 but held that it did not alter the basis of the earlier Constitution Bench decision. It was unable to accept the later two-Judge view in Easland Combines on the scope and effect of the amendment, and the matter was referred to a three-Judge Bench for authoritative consideration.

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Issues: Whether the amendment to Section 11A of the Central Excise Act, 1944 altered the basis of the earlier rule that duty levied on the basis of an approved classification list could not be treated as a short levy, and whether the later two-Judge view in Easland Combines should be accepted.

Analysis: The order notes that the earlier Constitution Bench view in Cotspun treated duty levied on an approved classification list as not constituting a short levy and held that differential duty could not be recovered under Rule 10. It then records that Section 11A was amended retrospectively by the Finance Act, 2000 to change that basis. After considering the later two-Judge decision, the Court found itself unable to agree with its view on the scope and effect of the amendment, and held that the amendment did not alter the basis of the earlier Constitution Bench decision.

Outcome: The appeal was referred to a bench of three Judges for authoritative consideration.

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