ITW SIGNODE INDIA LTD. versus COLLECTOR OF CENTRAL EXCISE

Citation: [2003] SUPP. 5 S.C.R. 751 · Decided: 19-11-2003 · Supreme Court of India · Bench: V.N. KHARE · Disposal: Case Partly allowed

Judgment (excerpt)

A 
ITW SIGNODE INDIA LTD. 
v. 
COLLECTOR OF CENTRAL EXCISE 
NOVEMBER 19,2003 
B 
[V.N. KHARE, CJ., S.B. SINHA AND DR. AR. LAKSHMANAN, JJ.] 
Central Excises and Salt Act, 1944; S.JJ-A and amendments made 
thereunder/Central Excise Tari.ff Act, 1985; Tari.ff Items 26AA(iiij, 68, 72II.31, C 
7308.90/Central Excise Rules, 1944; Rules 9(2) and Amendments made 
thereunder and 1738: 
Manufacture of box strappings from duty paid cold rolled steel strips 
as input-Resultant product-Classification of-Assistant Collector held that 
since resultant product is being manufactured by doing painting/waxing on D 
input material, description of final product does not change-No further duty 
liability arises-Amendment in Section I IA of the Act-Affirmed by the 
Appellate Authority-Reversed by the Tribunal-On appeal, Held: Amended 
provisions of Law facilitate Revenue authorities to determine correctness of 
classification of the product by re-opening of approved classification list- E 
A legal fiction created for recovery of short levy/non-levy-Hence, amended 
provision of Law, a valid piece of legislation. 
Extended period of /imitation for short levy-Invoking of-Held, It 
could be invoked only on discovery of positive acts of fraud on the part of 
assessee-Limitation involves question of jurisdiction-To be determined F 
having regard to both facts and law-In absence of any act of fraud, extended 
period of limitation could not have been invoked-Even if short levy, assessee 
could adjust the same from MODVATcredit on duty paid on input material-
Matter remitted to Tribunal for consideration afresh in accordance with 
law-Limitation Act, 1963-/nterpretation of Statutes. 
Curative and Validating Statutes-Operation of-Held: Retrospect:ve 
effect could be given-However, scope of validating Act varies from case to 
case. 
Words and Phrases: 
751 
G 
H 
752 
SUPREME COURT REPORTS [2003] SUPP. 5 S.C.R. 
A 
'Such '-Meaning of in the context of Section I IA of the Central Excise 
Act. 
Appellant-Assessee, a manufacturer, deals in manufacturing of box 
strappings from duty paid cold rolled steel strips as input raw material. 
Assessee informed the Revenue authorities concerned that the product falls 
B under tariff item No.26AA(iii) of the Central Excise Tariff Act and no excise 
duty was Ieviable. The authority·responded that the product would be 
classifiable under Tariff Item No.68 and not under Tariff Item No.26AA (iii) 
of the Act. However, Assistant Collector held that the assessee had discharged 
its duty/liability by paying duty for cold rolled steel strips, the input material 
C under Tariff Item No. 26AA (iii) and since the resultant product continues to 
be same, no further duty liability arose thereon. 
In the meanwhile, assessee had filed a classification list disclosing 
processes used in the manufacture of the product. The list was approved by 
the concerned authority. But the Revenue issued a show cause notice to the 
D assessee for levy and recovery of differential amount of duty on the product 
as the product fall under Tariff Item No.68 of the Act. In appeal, the Collector 
and the Appellate Authority affirmed the order of Assistant Collector. In 
appeal, Tribunal reversed the order. Hence the present appeal. 
On the issue of 'short levy of excise duty', Constitution Bench of 
E Supreme Court in the matter of Collector of Central Excise, Baroda v. 
Cotspun Ltd., (1999) 7 SCC 633 overruled its earlier decision in Ballarpur 
Industries Ltd. v. A.C. ofC.C.E., (1995] Supp. 3 SCC 429 upholding the law 
laid down by the Court in Rainbow Industries (P) Ltd v. CCE, Vadodra, (1994) 
6 SCC 563 as correct law. Parliament accordingly made certain amendment 
F under Section llA of the Central Excise Act, 1944 and the same was given 
retrospective effect. Assessee, in the present case, challenged the said 
amendment and the question was considered by this Court in Easland 
Combines, Coimbtore v. CCE, Coimbatore, (2003) 3 SCC 410. The Court 
upheld the amendment. 
G 
When the present matter was placed before the Division Bench, the 
Bench did not agree with the view taken by the Court in 'Easland Combines' 
case and directed to refer the matter to a Bench of 3 Judges. Hence the matter 
came before the present Bench. 
It was contended for the appellant-assessee that the basis of the decision 
H in Cotspun case was not taken away by introducing amendment in Section 11 
ITW SIGNODE INDIA LTD. v. C.C.E. 
753 
A of the Act; that levy of excise d

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