TaxTMI 
TaxTMI 
1981 (11) TMI 59
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....learned Counsel Shri. R.J. Joshi on behalf of the petitioners in this petition, few facts which lie within a narrow compass need to be referred to. The petitioners are a company incorporated under the provisions of the Companies Act 1 of 1956 and carrying on business inter alia of manufacturing water proof drawing inks. These inks are admittedly used for drawing black or colour drawings. On March 26th, 1965 the Inspector of Central Excise in/charge of Borosil Glass Works Ltd., Mondivita, Andheri, Bombay-59 drew samples of fountain pen ink, writing ink, rubber stamp pad ink and water proof drawing ink etc. at the petitioners' factory and sent them to the Chemical Examiner, New Customs House, Bombay for testing. According to the petitioners, after taking these samples, there was no further intimation from the Inspector. However, all of a sudden by a letter dated 5th February, 1966 the petitioners were informed that the Central Board of Excise and Customs had decided that water proof drawing ink is chargeable to duty under Item 14-I(5) of the Central Excise Tariff. The petitioners were requested to declare the stock of water proof drawing ink lying with them and the petitioners were f....
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....y no stretch of imagination be considered as a pigment, colour or paint. The said water proof drawing ink cannot be and has not been popularly understood as pigment, colour or paint falling in the category under Item 14-/(5) of the Central Excise Tariff. The petitioners, therefore, made a representation on 25th July, 1966 to the Assistant Collector of Central Excise and Customs. The said representation contained full facts relating to water proof drawing ink and it was pointed out in the said representation that by no stretch of imagination can it ever be considered that water proof drawing ink is a pigment, colour or paint falling under Item 14-/(5) of the Central Excise Tariff. 8. The Assistant Collector of Central Excise and Customs by his order dated 8th September, 1970 stated that since black drawing ink and coloured drawing ink contained natural resins which act as binders, the product in question fell under Tariff Item 14-/(5) and the demand for Rs. 178.75 P. being not time barred under Rule 10-A of the Central Excise Rules, 1944, is correct and therefore, confirmed the same. Being aggrieved by the said order passed by the Assistant Collector of Central Excise, Bombay Div....
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.... issued by the Assistant Collector of Central Excise calling upon the petitioners to show cause why the application for refund of duty ought not to be rejected. Among the requests made by the petitioners, that of personal hearing was granted to the petitioners on 14th March, 1978, at which the petitioners filed their written submissions. After hearing the petitioners, the Assistant Collector of Customs and Central Excise, Bombay Division K passed an order on 5th May, 1978 and held that water proof drawing ink were correctly classifiable under Tariff Item 14-I(5). He further held that the duty has been correctly paid by the petitioners under the said Tariff Item and rejected the refund claim of the petitioners for Rs. 77,434.43 P. filed by the petitioners in respect of the duty paid by them on the water proof drawing ink under Tariff Item 14-I(5) during the period from 11-2-1966 to 2-2-1974. He further held that the trade was also informed about the correct classification by issuing the necessary trade notice, viz. Collector Trade Notice No. 13(MP)/Paints & Varnish (3)/1966 dated 7th February, 1966 under which the trade was informed about the correct classification of water proof dr....
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....support of his contentions, the learned Counsel relied upon an order passed by the Appellate Collector of Central Excise and Customs, Bombay, on 16th October, 1979 in respect of a subsequent demand notice issued by the excise authority for Rs. 34,000/-. This decision will be adverted to a little later. 14. The learned Counsel further relied on a decision of a Division Bench of the Delhi High Court in J.K. Synthetics Ltd. and Another v. Union of India reported in 1981/E.L.T. 378 (Del.) in support of his proposition that an order passed by the Appellate authority is final and conclusive and it was not open to the Central Excise authority to change their stand and put the assessee to avoidable inconvenience and harassment, if the position is exactly the same legally and factually as it was on an earlier occasion. The submission of the learned Counsel was that if the drawing ink was held to be non-excisable for the period between 15-1-1966 to 1-2-1966, it cannot be said that in subsequent years when the petitioners have been paying the excise duty under protest, there was factually or legally any change in the circumstances so as to warrant the interpretation made by the learned Ass....
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....ental officers unless there is a statutory change by the Legislature which would justify this interference. 17. Accepting this submission as valid, the Appellate Collector has observed as follows in Para 3 of his order dated 16th October, 1979 : "I have gone through the appeal petition and the case records. Since the Appellants have taken up the question of applicability of the Appellate Collector's orders, in absence of any change either in their product or in the Tariff item, I do not propose to go into the merits of their classification once again. The Appellate Collectors order, which has decided the classification of their product, cannot be overruled by the Assistant Collector even if the order related to a particular period. In matters of classification, it is not the period which is relevant but the basic decision of classification. The Appellate Collector has already passed an order classifying the product of the appellants and I have no jurisdiction to interfere with that order. The Appellate Collector's order should have been sought to be reviewed under Section 36 if the Department did not agree with the findings of the Appellate Collector. This has obviously not b....
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....for the respondents cannot be said to be correct in view of what I have observed earlier. As stated earlier, the respondents have not challenged that the product manufactured by the petitioners on which duty has been paid for the period between 11th February, 1966 and 2nd February, 1974 is different then the one on which duty was paid for the period from 15th January, 1966 to 1st February, 1966. The respondents have also not disputed that there has been any change in the legislative policy so as to make the said product of the petitioners liable to levy of Central excise for the period in question. The learned Counsel, Mr. Joshi, for the petitioners is on much stronger ground when he placed reliance on the following observation of the Division Bench of the Delhi High Court in J.K. Synthetics Ltd. and Another v. Union of India and Others (supra) :- "An authority can depart from his earlier stand only for cogent reasons, such as fresh facts are brought on record or the process of manufacture has changed or the relevant Tariff entry has undergone modification or subsequent to the earlier decision, there has been a pronouncement of a High Court or the Supreme Court which necessitate....
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....se duty collected from the petitioners for different periods from May 1964 to June 1972. One of the principle grievance of the petitioners in their petition was the levying of such a huge amount of excise duty claimed by the petitioners. The Assistant Collector of Customs & Central Excise by his letter dated 3rd March, 1973 informed the petitioners as follows :- "It has been decided that the assessment of crimped yarn would not be on the basis of the resultant denier of crimped yarn but on the basis of the denier of the single basic yarn used for crimping. You are, therefore, directed that assessment be made accordingly with immediate effect." The contention raised by the petitioners, therefore, was that in spite of the Government of India's revisional order by which the Government of India accepted the case of the petitioners, the Assistant Collector of Central Excise demanded practically on the same basis and on the basis of the earlier order the excise duty which has been set aside by the Revisional Authority. After receipt of the said letter of the Assistant Collector dated 3rd March, 1973, the petitioners lodged a protest to the Assistant Collector of Central Excise. Thi....
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....r immutable, it can be ignored or brushed aside or departed from only for good and cogent reasons. 24. In paragraph 15 of the said judgment of the Division Bench of the Delhi High Court dwelt on the limitation and non-applicability of the principles of res judicata and estoppel and quoted :- "For example if the facts are different or if further and fresh facts are brought on record or if the process of manufacture has changed or if the relevant entries in the tariff have undergone a modification or if, subsequent to the earlier decision there has been the pronouncement of a High Court or the Supreme Court which necessitates reconsideration of the issue, it can hardly be doubted that the department can take a different view and have the matter agitated right up to the Supreme Court, if necessary. But when there is no change at all and when the position is exactly the same, legally and factually, as it was on the earlier occasion then we think that the Department should be restrained from capriciously changing its stand and inflicting unnecessary proceedings and hardship upon assessees." The Division Bench of the Delhi High Court drew considerable support for their decision ....