1. The petitioner, when the petition was presented was a going concern registered under the Companies Act, 1956 manufacturing textiles, including yarn, in what is commonly termed as a composite textile mill. Since then the Company has gone into liquidation and is now represented by the Official Liquidator attached to this Court. Its grievance relates to three years commencing from 15-7-1977 to 28-7-1979 and 15-11-1979 to 20-8-1980 to March, 1981. During the periods in question, the assessee-pctitioner textile mill was assessed to excise duty at concessional rate in terms of Notifications No. 226/77 dated 15-7-1977 and 301/79 dated 30-11-1979 issued by the Central Government. Such concessional duty levied was sought to be reopened by show cause notices issued between 9-11-1977 and before 24-2-1981 inter alia on the ground that the drill manufactured which was allowed concessional rate of duty was not drill specified in the notifications. As a result of such show cause notices and the cause shown by the petitioner, orders came to be passed on various dates commencing from 24-2-1981 and 10-4-1981. The appeals preferred against those orders of the Assistant Collector of Central Excise, Mysore-1st respondent herein came to be allowed by the Appellate Collector at Madras by his order dated 25-9-1981. He, however, remanded the matter to the lower authority, namely, 1st respondent, to start proceedings afresh and determine the question whether the controlled drill or drill manufactured by the textile mill in the periods in question was entitled to the concessional rate in the two notifications of the Central Government referred to earlier by us. On such remand, fresh notice as at Annexure-L to the petition dated 4-1-1982 came to be issued by the 1st respondent-Assistant Collector, Mysore. It will be useful to extract portions of that show cause, as that clearly sets out the facts of the case which we may not repeat.

“And whereas, on the basis of an appeal filed by the assessees against the above noted orders, the Appellate Collector of Central Excise, Madras has ordered conducting of denovo proceedings in respect of the above cases, under his order A. Nos. 170 to 179/81.C. No. V/19/31/81(b)-GR. II dt. 25-9-1981.

Now, therefore, the assessees Sri Krishnarajendra Mills Ltd., Mysore are hereby informed that there is reason to believe that drill fabrics manufactured and cleared by them during the period from July 1977 to August 1980 does not conform to the definition of “Controlled Drill” in terms of Notification No. CER/I/68 dated 2-5-1968 issued by the Textile Commissioner and also on the basis of the letter of the Textile Commissioner dated 24-10-1980. As such, the 16 classification lists filed by them (as discussed in order (original) C. No. V/19/22/5/80 MP I dated 24-2-81 noted above) requires to be revised and the differential duty for having availed the concession in terms of Notification Nos. 226/77 dated 15-7-1977 and 301/79 dated 30-12-1979 for which they do not appear to be eligible, is required to be demanded from them. Sri Krishnarajendra Mills Ltd., Mysore, are therefore called upon to show cause to the Assistant Collector of Central Excise, Mysore, as to why the 16 classification Lists (as noted in order (original) C. No. V/19/22-5-1980 MP I dated 24-2-1981 noted above) should not be ordered to be revised denying them concession as per the above noted notifications, any why the 4 refund claims preferred by them should not be rejected, and also why the differential duty for the period from July 1977 to August 1980, aggregating to Rs. 6,02,156-16 (Rupees six lakhs two thousand one hundred and fifty-six and paise sixteen only) as discussed in the orders cited at para (2) above, should not be demanded from them.”

2. Mr. G. Chander kumar, learned Counsel appearing for the petitioner, has drawn our attention to several illegalities in the show cause notice and the resultant order as at Annexure-Q to the petition with which the petitioner being aggrieved has moved this Court for a writ of certiorari to quash the same. A prayer to strike down Section 33 of the Central Excise and Salt Act, 1944 (hereinafter referred to as the Act) as unguided and arbitrary has not been pressed at the time of hearing of this writ petition in the view this Court has taken in an earlier writ petition upholding the validity of Section 33 of the Act (See W.P No. 5892/1986 dated 30th August, 1990).

3. He has drawn our attention to Rule 173B of the Central Excise Rules, 1944 (hereinafter referred to as the Rules) which reads as follows:

“Rule 173B. Assessee to file list of goods for approval of the proper officer.-(1) Every assessee shall file with the proper officer for approval a list in such form as the Collector may direct (in quintuplicate) showing—

(a) the full description of (i) all excisable goods produced or manufactured by him, (ii) all other goods produced or manufactured by him and intended to be removed from his factory, and (iii) all the excisable goods already deposited or likely to be deposited from time to time without payment of duty in his warehouse;

(b) the Chapter, Heading No. and sub-heading No. if any, of the Schedule to the Central Excise Tariff Act, 1985(5 of 1986) under which each goods fall;

(c) the rate of duty leviable on each such goods; and

(d) such other particulars as the Collector may direct.

(2) The proper officer shall, after such inquiry as he deems fit, approve the list with such modifications as are considered necessary return one copy of the approved list to the assessee who shall, unless otherwise directed by the proper officer, determine the duty payable on the goods intended to be removed in accordance with such list.

(2A) All the clearances shall, subject to the provisions of Rule 173CC, be made only after the approval of the list by the proper officer. If the proper officer is of the opinion that on account of any inquiry to be made in the matter or for any other reason to be recorded in writing there is likely to be delay in according the approval, he shall, either on a written request made by the assessee or on his own accord, allow such assessee to avail himself of the procedure prescribed under Rule 9-B for provisional assessment of the goods.”

…………………………………………………………………………

(rest of the sub-rules are not necessary for our purpose)

4. From the provision made under sub-rule (2A) of the Rules the approval of the list may be withheld and in accordance with the provision made allow the assessee to proceed under Rule 9B of the Rules. Rule 9B of the Rules which is worded more or less similar to the language of sub-rule (2A) of Rule 173-B of the Rules is as follows:

“Rule (9-B) Provisional assessment to duty.-(1) Notwithstanding anything contained in these rules,—

(a) where the proper officer is satisfied that an assessee is unable to produce any document or furnish any information necessary for the assessment of duty on any excisable goods; or

(b) where the proper officer deems it necessary to subject the excisable goods to any chemical or any other test for the purpose of assessment of duty thereon; or

(c) where an assessee has produced all the necessary documents and furnished full information for the assessment of duty, but the proper officer deems it necessary to make further enquiry (including the inquiry to satisfy himself about the due observance of the conditions imposed in respect of the goods after their removal) for assessing the duty,

the proper officer may, either on a written request made by the assessee or on his own accord, direct that the duty leviable on such goods shall, pending the production of such documents or furnishing of such information or completion of such test or inquiry, be assessed provisionally at such rate or such value (which may not necessarily be the rate or price declared by the assessee) as may be indicated by him, if such assessee executes a bond in the proper form with such surety or sufficient security in such amount, or under such conditions as the proper officer deems fit, binding himself for payment of the difference between the amount of duty as provisionally assessed and as finally assessed.

(2) xxxxxxxx

(3) The Collector may permit the assessee to enter into a general bond in the proper Form with such surety or sufficient security in such amount or under such conditions as the Collector approves for assessment of any goods provisionally from time to time;

Provided that, in the event of death, insolvency or insufficiency of the surety or where the amount of the bond is inadequate, the Collector may, in his discretion, demand a fresh bond and may, if the security furnished for a bond is not adequate, demand additional security.”

5. That the list submitted in accordance with Rule 173-B of the Rules must be deemed to have been approved or the assessee was permitted to avail himself of the procedure under Rule 9-B of the Rules cannot be disputed, as duty has been collected on the drill at concessional rate during the periods in question. It is that fact which provoked the 1st respondent right from 9-11-1977 to issue the series of show cause notices to reopen the concluded assessments. If there was no provision to review an approval as is apparent from the reading of Rule 173B of the Rules, then the question of reopening by recalling such approval would not arise. The plain language employed in sub-rule (2A) of Rule 173-B of the Rides clearly indicates that an approval may be with-held. No other provision is made to recall if it has not been so with-held. The intention of the legislature is clear, the flow of money into the public coffers should not come to a stand still by not according approval in time. Therefore, even if there is no approval given, it can only be delayed, but once given it cannot be recalled.

6. Even otherwise, as pointed out by Shri Chander Kumar any levy which has escaped levy can be reopened only if the requirements of sub-Rule 10 of the Rules are satisfied. Rule 10 of the Rules has fallen for consideration several times by this Court, the other High Courts and the Supreme Court (which has since been repealed) expressly provided certain ingredients in the absence of which it could not be pressed into service by the department. What Rule 10 of the Rules did not provide for is a case like this where the proper officer might recall the approval he had once accorded. If that cannot be a ground under Rule 10 of the Rules for bringing to tax the duty leviable on the drill cloth or short levy on account of the concession availed of by the assessee-textile mill. We find from the order of the Additional Collector of Appeals, Madras that the officer at Mysore had committed an error in referring the samples obtained in February, 1980 for test and report to the Textile Commissioner at Bombay. In that behalf, it is necessary to see the provision made under Rule 56 of the Rules which is as follows:

“Rule 56. Taking of samples for excise purposes.-(1) The manufacturer shall permit any officer to take samples of any manufactured or partly manufactured goods or of any intermediate or residual products resulting from the manufacture thereof, in his factory.”

7. From the above it is obvious, the persons designated in the rule, become excise officers as defined under Section 2-B of the Act. The Textile Commissioner not being one of such officer designated under Rule 56 of the Rules, he was not the proper person to conduct the test on the sample drawn in February, 1980. Therefore, Additional Collector at Madras - Appeal was justified in finding fault with the officer-Assistant Collector at Mysore for sending the sample for test out-side the department. We have noticed in the show cause notice of January, 1982 the basis for the entire period in question was the report of the Textile Commissioner dated 24-10-1980 in regard to the sample drawn in February, 1980. Therefore, the case which the assessee-textile mill was to meet was founded on a report which could not have been acted upon by the 1st respondent-Assistant Collector, as the Textile Commissioner was not the proper officer in terms of Section 12-A of the Act. Though there is a reference to the report of the Chemical Examiner at Madras, that reference is only by way of sending a copy of such a report and no reference to it is made in body of the show cause notice, most of which we have extracted earlier in the course of this order. Therefore, not only was the assessee textile mill not called upon to show cause against any other Chemical Examiner's report specified, it was directed to show cause only against that which had already been urged by the assessee to be incorrect. To put it in another way, despite the correction made by the Additional Collector, the mistake was repeated by the 1st respondent-Assistant Collector of Central Excise. It is therefore permissible for us to infer that there was no adequate opportunity to Textile mill to meet the case which had already been made before the Additional Collector of Appeals, Madras. It is one of the essential ingredients of rules of natural justice, that the person who is likely to be affected by the proposed recovery of short levy should be informed the basis on which such short levy is being recovered. If that basis was not something legally permissible, then he was not informed correctly of the case he should meet and therefore there was violation of rules of natural justice and as such the 1st respondent-Assistant Collector at Mysore lacked jurisdiction to issue the show cause notice and proceed to pass an order as at Annexure-Q by which he not only rejected the four applications for refund but also made a demand in the sum of Rs. 8,68,493-18. We, therefore, should not have any hesitation to quash the impugned order in so far as it relates to the demand made for the alleged short levy in the periods in question on the ‘drill’ manufactured by the petitioner.

8. The petitioner has not asked for any relief against the refusal of refund and therefore we cannot grant it and we must leave that part of the order untouched.

9. However, before parting with this case, we must notice some of the arguments advanced by Mr. Shylendra Kumar, Standing Counsel for the respondent-Central Government who appeared for the respondents. He contended that though there was no specific provision made to recall an order of approval given under Rule 173B of the Rules, the power should be, nevertheless, conceded as there cannot be any estoppel against the statute. In fact, he was unable to explain the thrust of the argument. The power to recall or review must be expressly conferred on an authority. If it is not so conferred then there is no power of review in that authority. This is well settled judicial principle which does not brook any citation. However, a decision of the Supreme Court was relied upon by the learned counsel for the Central Government in the case of Elson Machines Pvt. Ltd. v. Collector Of Central Excise ., 1988 (38) E.L.T 571 (SC). In paragraph-8 as reported in the Excise Law Times, the Supreme Court has ruled as follows:

“8. The next submission on behalf of the appellant is that the Classification Lists had been approved earlier and the Excise Authority was estopped from taking a different view. Plainly there can be no estoppel against the law. The claim raised before us is a claim based on the legal effect of a provision of law and, therefore, this contention must be rejected.”

10. With that proposition none can have any quarrel. But, that is not the same as stating that the approval of the list can be reviewed by the department. The facts of the case were wholly different and they were as follows:

“For the financial year 1st April, 1980 to 31st March, 1981, the appellant had disclosed a clearance value of Rs. 13,43,443-55 on account of electric motors for home consumption and a clearance value of Rs. 6,51,138-50 on account of electric motors “for captive consumption” in the manufacture of monoblock pumps. It was contended by the appellant that the electric motors used for making monoblock pumps could not be taken into consideration when calculating the clearances eligible under the Notification. According to the appellant the captive consumption did not amount to clearance. The claim was disputed by the Department, which relied on Explanation V to the aforesaid Notification dated 19th June, 1980.”

11. We do not think that has any relevance to the facts of the case which we have dealt with.

12. It was next contended that question of limitation and such other matter would not arise under Rule 10 of the Rules or Section 11-A of the Act as the case may be in view of the earlier show cause notices issued on 9-11-1977. We have not examined the question of limitation in the light of what we have earlier stated. Assuming that there was an argument advanced on the ground of limitation, the question is whether show cause notices issued earlier on the basis of which 10 orders had been passed and those 10 orders had been set aside it could be ultimately said that the show cause notices issued earlier survived even after the orders had been set aside by the Appellate Authority.

13. In fact, the very foundation for the impugned order at Annexure-Q is the show cause notice issued in January, 1981 which is a composite notice relating to the three periods which we have mentioned. Therefore, no reliance can be placed on the earlier show cause notices to drive home any point. We are satisfied that the writ petition deserves to be allowed in terms we have indicated and we further direct that all amounts paid by the Company in liquidation as a consequence of the directions given by this Court by order dated 11-3-1985 shall be refunded to the Official Liquidator who shall hold the same as an asset to the company in liquidation to be dealt with in accordance with the provisions governing liquidation under the Companies Act. Out of the funds refunded or any other refunds available, the Official Liquidator is directed to pay Mr. Chander Kumar his fees which we fix at Rs. 1000/-.

14. Petition is allowed with costs and rule is made absolute in terms indicated.

15. Writ Petition allowed with costs.