TMI Blog1981 (2) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... Thereafter the petitioner submitted, from time to time, a number of price lists up to 19th April, 1977 for approval of the proper officer. A perusal of the allegations made in paragraph 20 read alongwith copies of the orders Annexures 1 and 2 to the writ petition as also Annexure 7 to the writ petition shows that three of the price lists, namely, those Nos. 2/76, 7/76 and 9/76 submitted by the petitioner for approval on 17th January, 1976, 9th June, 1976 and 20th December, 1976 were not approved as such by the proper officer who directed that the value of certain packing be also included in the assessable value of glass sheets and he amended those price lists accordingly. Being aggrieved the petitioner went up in appeal before the Appellate Collector who accepted the petitioner's case in this regard and disposed of the appeals regarding price lists 2/76 and 7/76 vide his order dated 20th May, 1978 (Annexure 11) and that in respect of price list No. 9/76 vide his order dated 1st August, 1978 (Annexure 2). Operative portions of the orders dated 20th May, 1978 and 1st August, 1978 respectively ran thus: - "In view of the above discussions, I order that extra packing charges for fram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector again allowed the appeal vide his order dated 1st August, 1978 and set aside the order of the proper officer modifying the price list and directed that consequential relief, if any, also stood allowed. The petitioner claims that it, in pursuance of the aforesaid appellate order, became entitled to a refund of a sum of Rs. 1,20,367.80 P. However, the defendant has not taken any steps to refund the said amount to it so far. 5-A. As mentioned in paragraph 27 of the petition petitioner claims to have become entitled to the refund of following amounts in pursuance of various appellate orders passed by the Appellate Collector :- (1) Vide order dated 1st August, 1978 in respect of price list 9/76, Rs. 3,28,209.21 P. (2) Vide order dated 20th May, 1978 in respect of price lists Nos. 2/76 and 7/76, Rs. 4,53,194.41 P. (3) Vide order dated 14th October, 1977 in respect of price list No. 1/77, Rs. 3,68,593.86 P. (4) Vide order dated 1st August, 1978 in respect of price list No. 1/78, Rs. 1,20,367.81 P. Total comes to Rs. 12,70,367.35 P. The petitioner claims that the respondents are wrongly withholding the said amount and they are bound to refund the same to it. It, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the rate of duty, the period of six months shall be computed from the date on which the duty is adjusted after final determination of the value or the rate of duty, as the case may be. (2) If on receipt of any such application the Assistant Collector of Central Excise is satisfied that The whole or any part of the duty paid by appellant should be refunded to him, he may made an order accordingly. (3) Where, as a result of any order, passed in appeal or revision under the Act, refund of any duty becomes due to any person, the proper officer may refund the amount to such person without his having to make any claim in that behalf. (4) Save as otherwise provided by or under these rules, no claim for refund of any duty shall be entertained. Explanation. - For the purposes of this rule, 'refund' includes rebate referred to in Rules 12 and 12-A." Aforementioned provision contained in Rule 11 has since been incorporated by .the Customs, Excise Salt and Board of Revenue Amendment Act, 1978 (No. 25 of 1978) in the Central Excises and Salt Act itself as Section 11A. As laid down in sub-rule (3) where as a result of any order passed in appeal or revision under the Act, refund of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per officer from performing his obligation under Rule 11(3) to refund the amount due in accordance with various appellate orders within reasonable time. The fact that the Central Government is examining the propriety of the appellate order dated 14th of October, 1977 by itself cannot provide a reason which is good enough to justify the proper officer in not performing his public duty under Rule 11(3). Accordingly the petitioner is entitled to a writ commanding the respondents to refund the amounts due to it in consequence of various appellate orders mentioned in paragraph 27 of the petition. Of course, if and when the appellate orders are modified or corrected, it will be open to the respondents to initiate proper proceedings in accordance with law for recovering the amount to the extent it has been wrongly refunded by it. 11. As has already been mentioned, the petitioner in paragraph 20(vi) of the petition stated that it would pursue separate remedy for seeking relief in respect of the amount of Rs. 3,23,209.27 and Rs. 4,53,194.41 due to it under appellate orders dated 1-8-1978 and 20-5-1978, he has while formulating the prayer made in the petition claimed relief in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25 of 1978) published in the official gazette on 6-6-1978. The amending Act inserted new Sections 11-A, 11-B, 11-C in the Central Excises and Salt Act and by Section 24 thereof it inter alia added a third proviso to Section 36(2) of the Act which runs thus :- "Provided also that where the Central Government is of opinion that any duty of excise has not been levied or has been short levied or erroneously refunded, no order levying or enhancing the duty or no order requiring payment of duty so refunded shall be made under this section unless the person affected by the proposed order is given notice to show cause against it within time limit specified in Section 11-A." The time limit in Section 11-A(l) of the Act is inserted by Act No. 25 of 1978 has been specified in the following manners :- "When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, a Central Excise Officer may within six months from the relevant date serve notice on the person chargeable with duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, 1977 is well within time. Even assuming that the right of the Central Government to initiate proceedings under Section 36(2) could be affected by the amendment made by Act No. 25 of 1978, the proviso added to Section 36(2) merely laid it down that in cases of the nature mentioned therein no proceedings could be initiated unless a notice to show cause had been issued within the period of limitation specified in Section 11-A. The section was enforced vide Notification No. 176/80-C.E., dated 12th of November, 1980 with effect from 17th of November, 1980. Accordingly, the period of limitation specified in Section 11-A and the proviso added to Section 36(2) by Act No. 25 of 1978 had not become operative by the time the impugned notice was issued by the Central Government. Learned counsel for the respondents further urged that the instant case does not fall within the ambit of the proviso added by Act No. 25 of 1978 and it continues to be governed by the second proviso to Section 36(2) of the Act which enabled the Central Government to commence proceedings for revision of a decision or an order within one year. 17. We are not impressed by the argument of the learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion that any duty of excise has:- (i) not been levied, or (ii) been short levied, or (iii) been erroneously refunded, and it has given a notice requiring the person affected to show cause against the proposed order within the time limit specified in Section 11-A of the Act. A plain reading of this proviso shows that it has no application to case where the Central Government is not required to form an opinion on the question as to whether or not there has been non-levy, short-levy or erroneous refund of duty as a consequence whereof an order levying or enhancing the duty or requiring payment of duty erroneously refunded has to be made. 20. In the case before us, the Central Government has issued the impugned notice with a view to examine the correctness, legality and propriety of the order dated 14th October, 1977 passed by the Appellate Collector whereby he had set aside an order made under Rule 173-C(2) by Assistant Collector, Central Excise modifying price list No. 1/77 submitted by the petitioner for his approval on 2nd June, 1977. The notice issued by the Central Government is not directed against any order of assessment made under Rule 173-I, on the basis of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge in paragraph 21 of the judgment went on to say :- "We are, therefore, unable to accept the view that merely because the 'account current' kept under the third proviso (erroneously mentioned as second proviso by the Division Bench) to Rule 9 indicated that an accounting had taken place, there was necessarily a legally valid or complete levy. The making of debit entries was only a mode of collection of tax. Even if payment of actual collection of tax could be spoken of as a de facto 'levy' it was only provisional and not final. It could only be clothed or invested with validity after carrying out the obligation to make an assessment to justify it. Moreover, it is the process of assessment that really determines whether levy is short or complete. It is not a factual of presumed levy which could, in a disputed case, prove an assessment. This has to be done by proof of the actual steps taken which constitute 'assessment'." (emphasis supplied) Again in the case of N.B. Sanjana v. E.S. and W. Mills, AIR 1971 SC 2039 = 1978 E.L.T. (J 399) (S.C.) the Supreme Court ruled that where as a result of assessment it is held that no duty is payable it results in short levy of duty within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecomes necessary for the proper officer to find out the goods in respect of which duty is payable as also to resolve and decide a controversy with regard to the rate at which the duty is to be calculated and in this sense such determination forms part of the procedure for fixing the liability of the assessee for payment of duty, but then mere determination of the goods in respect to which and the rate at which the duty on those goods is payable by itself does not result in assessment of duty. 24. Rule 52 appearing m Chapter V of the Central Excise Rules lays down the normal rule for clearance of goods by a manufacturer on payment of duty. It runs thus :- "When the manufacturer desires to remove goods on payment of duty either from the place or a premises specified under Rule 9 or from a storeroom or other place of storage approved by the Collector under Rule 47, he shall make application intriplicate (unless otherwise by rule or order required) to the proper officer in the proper Form and shall deliver it to the office at least twelve hours (or such other period as may be elsewhere prescribed or as the Collector may in any particular case require or allow) before it is intended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed in respect thereof to the buyers. Sub-rule (2) of the rule thereupon requires the proper officer to approve the price list after such modification as he may consider necessary so as to bring the value shown in the assessment list to be the correct value, for the purposes of assessment as provided in Section 4 of the Act. The object of the rule is to enable the assessee to know, in the case of goods in respect of which duty is payable ad valorem, the value of the goods on the basis of which the duty is to be assessed at the rates mentioned in the list approved in respect of such goods under Rule 173B. Rule 173F then enables the assessee who has complied with the provisions of Rule 173C to himself determine the liability for the duty due on the excisable goods intended to be removed and to remove the goods on payment of duty so determined by him. Rule 173G lays down the procedure for paying the amount of duty determined by the assessees themselves under Rule 173F by requiring them to keep an account-current with the Collector separately for each excisable goods falling under different items of the First Schedule to the Act, in such form and manner as the Collector may require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of such goods can possibly arise. In such cases the rules contemplated removal of goods by the manufacturers on determining the duty payable in respect of such goods by the manufacturer or producer themselves and for making monthly assessments for payment of duty by the proper officer in respect of the goods which have been removed by the assessee during a particular month on the basis of the returns filed by the assessee under Rule 173G(3). The duty payable is thus determined by the proper officer under Rule 173-I and at no stage prior to it. 27. In this view of the matter we are of opinion that a simpliciter order passed under Rule 173C even though it provides a basis for eventually calculating and determining the amount of duty payable by a manufacturer during a particular month neither results in assessment of duty nor to its being levied. Such an order by itself, therefore, cannot entail any question of short-levy or erroneous refund of duty. 28. Learned counsel for the petitioner invited our attention to a decision of a Full Bench of the Calcutta High Court in the case of Inspector, Central Excise Taxmaco Bolgharia v. Textile Machinery Corporation Ltd., 1980 Tax LR 2308 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of limitation prescribed under the proviso to Section 36(2) as added by Act 25 of 1978. The Delhi High Court treating the order of the Appellate Collector as resulting in short-levy of duty held that the case was covered by the third proviso added to Section 36(2) by Act 25 of 1978 and that the period of limitation mentioned therein had to be computed with reference to the date of the order sought to be revised. In the result it held that the notice issued by the Central Government was beyond the period of limitation and directed it to be quashed. The question as to when an order passed by the authorities under the Central Excise Act can be said to result in levy or short-levy of duty was neither raised nor considered by the Delhi High Court in this case. We are, accordingly, of opinion that the petitioner cannot derive any assistance from the ratio of this case either. 30. Learned counsel for the petitioner argued that when in an appeal against an order made under Rule 173C the Appellate Collector modifies the price list and as a consequence thereof directs the refund of excise duty paid by the assessee it results into levy of excise duty and if the Central Government in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se duty payable by the petitioner in any particular month and it by itself does not result in refund of any portion of duty to the assessee. Accordingly the order, if found to be wrongs can also not be said to have resulted either in erroneous refund or short-levy of duty and no question of the Central Government passing any order for paying a duty short-levied or erroneously refunded in a revision against that order under Section 36 would arise. 32. Learned Counsel for the petitioner then invited out attention to the fact that price list No. 1/77 continued to be effective till the month of June, 1978 when the petitioner submitted a fresh price list No. 1/78 for approval of the proper officer. For the period subsequent to 14th of October, 1976 and before June, 1978 the petitioner was assessed to excise duty on the basis of the value as originally given in price list No. 1/77. In case the Central Government holds that the appellate order dated 14th of October, 1977 passed by the Appellate Collector was wrong and the value of the goods created during this period has to be taken as that modified by the proper officer, the assessment made under Rule 173-I would result in short-levy o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. If and when such proceedings are taken, it will be open to the petitioner to raise all such legal objections that may be open to it. Suffice is to say we do not find any error in the notice issued by the Central Government for the reason that it is barred by the period of limitation provided in the third proviso to Section 36(2) of the Act. 34. In the end, learned Counsel for the petitioner urged that on the facts of this case it would be apparent to anybody that the order sought to be revised by the Central Government was in accordance with the decision of various High Courts as well as the circulars issued by the Central Board of Excise and Customs and that there was no error in the order of the Appellate Collector. In the circumstances, the notice issued by the Central Government was vitiated by legal mala fides. We are at this stage not going into the merits of the question dealt with by the order in respect of which the notice has been issued by the Central Government. It will be for the petitioner to approach the Central Government and to satisfy it that the order passed by the Appellate Collector requires no interference. Merely because the petitioner thinks that the or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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