Arvinder
Subgh Bagga Vs. State of U.P [1994] INSC 509 (4 October 1994)
Mohan,
S. (J) Mohan, S. (J) Majmudar S.B. (J)
CITATION:
1995 AIR 117 1994 SCC (6) 565 JT 1994 (6) 478 1994 SCALE (4)466
ACT:
HEAD NOTE:
The
Judgment 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, 565 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 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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