1987 (8) TMI 249 - AT - Central Excise

Appellants granted appeal rights, Collector's order overturned under Rule 56B.

The Tribunal found that the appellants had locus standi to appeal the Collector's order as it impacted their business operations. The Collector's letter ... Semi-finished goods Issues Involved:1. Locus standi of the appellants.2. Nature of the Collector's order.3. Timeliness of the appeal.4. Merits of the case regarding Rule 56B applicability.5. Change in the Tariff Item No. 144 and its implications.Issue-wise Detailed Analysis:1. Locus Standi of the Appellants:The respondent argued that the appellants had no locus standi as the Collector's order was addressed to Messrs Coromandel Fertilizers. However, the Tribunal found that the appellants had an interest in the matter, as evidenced by the correspondence and the recovery of duty from them. The Tribunal concluded that the appellants had locus standi to appeal since the denial of the facility would impact their business operations.2. Nature of the Collector's Order:The respondent contended that the Collector's letter was not an order or decision by an adjudicating authority and thus not appealable. The Tribunal disagreed, noting that the letter contained a decision to withdraw the permission granted under Rule 56B, which affected the appellants' operations. Therefore, it was considered an appealable decision.3. Timeliness of the Appeal:The respondent argued that the appeal was time-barred. The appellants countered that the delay should be condoned based on a High Court order allowing them to file an appeal within four weeks. The Tribunal found that the appellants acted reasonably by filing a Writ Petition immediately after the Collector's order and subsequently filing the appeal within the stipulated time. The delay was thus condoned under Section 35B(5) of the Central Excises and Salt Act.4. Merits of the Case Regarding Rule 56B Applicability:The appellants argued that the procedure under Rule 56B was 'thrust' upon them and Coromandel Fertilizers to continue their operations. They cited several cases to support their contention that the withdrawal of the facility without a show cause notice violated natural justice principles. The respondent maintained that the facility was withdrawn because the impure carbon dioxide was sold to the appellants, which did not meet Rule 56B conditions.The Tribunal analyzed Rule 56B and found that it allowed for the removal of semi-finished goods to another assessee's premises, with the goods being removed on payment of duty. The Rule did not preclude the sale of goods between manufacturers. Therefore, the Collector's order withdrawing the facility was deemed incorrect and unsustainable.5. Change in the Tariff Item No. 144 and Its Implications:The Tribunal noted a significant change in the wording of Tariff Item No. 144, effective from 18-6-1977, which expanded the scope to include all gases, not just compressed ones. This change was relevant to determining whether the impure carbon dioxide was excisable under the amended Tariff.The Tribunal observed that prior to the amendment, the impure carbon dioxide could be considered 'semi-finished goods' and eligible for Rule 56B benefits. However, post-amendment, the classification of impure carbon dioxide under Item 14H needed re-evaluation to determine its eligibility for Rule 56B.Conclusion:The Tribunal set aside the Collector's order dated 19-12-1981 and remanded the issue to the present Collector for fresh consideration. The Collector was directed to re-examine the applicability of Rule 56B, particularly in light of the amended Tariff description and the sale of goods. The appeal was disposed of accordingly.