1980 (9) TMI 98 - HC - Central Excise

Demand - Differential cess - Produce Cess Act - Scope - Collector - Appointment of - Short levy - Illegal cess

Summary

Issues:
1. Calculation of differential cess under the Produce Cess Act.
2. Appointment of Collector under Section 2(a) of the Produce Cess Act.
3. Application of Rule 10 or 10A of the Central Excise Rules.

Detailed Analysis:
1. The appeal involved a dispute regarding the calculation of differential cess under the Produce Cess Act. The appellant had been paying cess at the rate of 17 paise per quintal under the Oil Seeds Committee Act, which ceased to have effect on 1-4-1966. The Produce Cess Act came into force on 21-5-1966, raising the cess to 60 paise per quintal. However, the demand for the differential cess was incorrectly calculated from 1-4-1966, which was deemed incorrect as no cess could be asked to be paid between 1-4-1966 and 21-5-1966 when the Act came into force.

2. The issue of the appointment of a Collector under Section 2(a) of the Produce Cess Act was raised. The appellant argued that there was no appointment of a Collector, Assistant Collector, or Superintendent of Central Excise under the Act, which affected the power to exercise under the said Act. The respondent contended that officers of the Central Excise were empowered under Section 15(2) of the Act. However, the court held that the appointment of a Collector was necessary for the levy and collection of tax under the Act, and until such appointment, the collection of tax and levy could not proceed.

3. The application of Rule 10 or 10A of the Central Excise Rules was also discussed. The appellant argued that Rule 10 applied, setting a three-month limitation for making demands in cases of short-levied duties. The court agreed that the demand for the differential cess was barred by limitation under Rule 10, as it should have been made within three months from the date the Act came into force. The respondent's argument that Rule 10A applied, which had no limitation, was rejected by the court.

In conclusion, the court allowed the appeal, setting aside the judgment and order passed by the Trial Judge. The rule was made absolute, with no order as to costs, and the prayer for leave to appeal to the Supreme Court was refused.