TMI Blog2006 (10) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... pute as regards mode of valuation for the purpose of levy of excise duty. By a judgment and order dated 19.7.1995, this Court opined that excise duty should be paid on the wholesale dealers price to their customers and not on the price of Respondent No, 1 to its wholesale dealers. 4. A show cause notice was issued on 10.4.1986 as to why Respondent and its wholesale dealers, being related persons, the cost of Corrugated Fibre Containers (CFCs) should not be added to the manufacturing cost. A show cause notice was also issued on 10/11.8.1983 asking the respondent to show cause as to why differential duty of Rs. 57,22,63,857.70 for the period from 1.7.1980 to 31.3.1982 shall not be directed to be paid. Another notice was issued on 8.10.1984 demanding the differential duty of Rs. 43,53,137.70 for the period 1.4.1982 to 30.6.1983. One show cause notice was furthermore issued on 13.4.1987 demanding Rs. 34 crores claiming freight, administrative charges collected by Respondent herein to be added as additional consideration 5. Indisputably, the issue between the parties as regards valuation of the goods was decided in favour of Respondent by CEGAT by an order dated 18.3.1994. 6. By ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy of the said appeal was issued on 31 purported to be in terms of order dated 16.12.1997 whereby Respondent No. 1 was asked to make payment of the differential duty amounting to Rs. 1,38,00,035.76. An appeal was preferred against the said second show cause notice as also the demand notice dated 31.3.1998 before the Commissioner (Appeals) which was registered as 571/M-I/98. On an application filed therein for waiver of the requirements of pre-deposit of duty demanded and stay of operation of the said notice of demand during pendency of the appeal, by an order dated 29.12.1998, the Commissioner (Appeals) directed Respondent to deposit an amount of 50% of the disputed duty demanded, as a condition precedent for entertaining the appeals within a period of 15 days therefore. Against the said order, a writ petition was filed before the High Court of Bombay which was allowed by an order dated 22.1.1999 directing the Commissioner (Appeals) to dispose of the stay application afresh by a speaking order within six weeks. 9. The Commissioner (Appeals) by a common order dated 26.2.1999 disposed of both the appeals and set aside the order of Assistant Commissioner and the Superintendent upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring hint to show cause why he should not pay the amount specified in the notice: Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect as if, for the words "six months", the words "five years" were substituted". 13. Rule 9B of Central Excise Rules, 1944 (for short "the Rules") reads as under: "Rule 9B. Provisional assessment to duty.- (1) Notwithstanding any thing 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act provides for a penal provision. Before a penalty can be levied, the procedures laid down therein must be complied with. For construction of a penal provisions, it is trite, the golden rule of literal interpretation should be applied. The difficulty which may be faced by the Revenue is of no consequence. The power under Section 11-A of the Act can be invoked only when a duty has not been levied or paid or has been short-levied or short-paid. Such a proceeding can be initiated within six months from the relevant date which in terms of Sub-section (3) (ii) (b) of Section 11-A of the Act (which is applicable in the instant case) in a case where duty of excise is provisionally assessed under the Act or the Rules made thereunder, the date of adjustment of duty after the final assessment thereof. A proceeding under Section 11-A of the Act cannot, therefore, be initiated without completing the assessment proceedings. 18. Ranganathan, J. in Ujagar Prints (II) v. Union of India [(1989) 3 SCC 488] defined the word "levied" in the following terms: "…….The word "levied" is a wide and generic expression. One can say with as much appropriateness that the Income Tax Act levies a tax on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1997) 4 SCC 641] wherein this Court clearly opined: "Section 11-A deals with recovery of duty not levied mat paid or short-levied or short-paid or erroneously refunded. Proceedings under Section 11-A have to be commenced with a show-cause notice issued within six months from the relevant date. "Relevant date" has been defined under sub -section (3)(ii) to mean in a case where duty of excise is provisionally assessed under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof. After final assessment, a copy of the order on the return filed by the assessee has to be sent to hint. Duty has to be paid by the assessee on the basis of the final assessment within ten days time from the receipt of the return. No question of giving any notice under Section 11-A arises in such a case. It is only when even after final assessment and payment of duties, it is found that there has been a short-levy or non-levy of duty, the Excise Officer is empowered to take proceedings under Section 11-A within the period of limitation after issuing a show-cause notice. In such a case, limitation period will run from the date of the final assessment. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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