TMI Blog1999 (10) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant according to the provisions of Section 11A and whether the notice issued beyond the period of six months from the date of knowledge, should be held to be barred by the limitation. 2. Before proceeding further, it will be useful to refer to the said section which reads as follows :- SECTION 11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. - (1) 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 the 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 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 mis-statement 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. To the same effect was the decision of the Calcutta Bench of the Tribunal in the case of Indian Oxygen Ltd. v. C.C.E., Bhubaneswar [1997 (89) E.L.T. 557 (T) = 1996 (16) RLT 867 (CEGAT-EB)] wherein the invoking of the extended period of limitation was held to be valid and proper even though the Show Cause Notice was issued after a period of six months from the date of knowledge of the assessees activities. In the case of M/s. Needle Industries India Ltd. v. C.C.E. [1997 (89) E.L.T. 131 (T) = 1996 (16) RLT 903], the Tribunal held that the SCN issued to cover the period prior to the Department acquiring knowledge about assessees activities is not barred by limitation even though the notice is issued beyond a period of six months from the date of such knowledge. The common line of approach in the aforesaid orders was that the date of acquisition of knowledge about alleged suppressed activities of the assessee is not a relevant date within the meaning of Section 11A and even though SCN is issued beyond the period of six months from the date of such knowledge, they would not be vitiated as long as it is issued within the period of five years from the relevant date as defined under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the rules and had not discharged duty liability. The said notice covered the period of assessment years 1982-83 to 1986-87. During the adjudication proceedings, the assessee inter alia took the plea that the SCN under consideration was practically a repetition of the allegations contained in the SCN dated 28-2-1984 and for the period April, 1982 to September, 1982, the Department had raised demands under two different SCNs. The assessee had further pointed out that carbondioxide in the impure form was not marketable as it also contained carbonmonoxide in lethal proportions. The assessee was also contended that they were under bona fide belief that since such impure carbondioxide was not excisable, they were also not required to file Classification List or Price list or to take out licence. Assessee therefore submitted that resorting to extended period of limitation under Section 11A(1) was not justified in the circumstances of the case. 7. The adjudicating authority however, did not accept the assessees contention and the demands raised in the SCN were confirmed by the impugned order. Ld. Counsel contends before us that the extended period of limitation was not invokable aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hort-levy or erroneous refund on the part of the Department had occurred or where non-payment or short-payment by assessee had taken place by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any provisions of the Act or Rules with intent to evade payment of duty. In such cases SCN could be issued within a period of five years instead of six months. He referred to Tribunal decision in Mopeds India Ltd. v. C.C.E. [1991 (56) E.L.T. 241 (T)], in which a three Member Bench of the Tribunal had held that though suppression was manifested in the facts of the case as evident from non-disclosure of material particulars in the Price Lists submitted by the assessee, since the Department had become aware of the malpractice even on 23-10-1975, the SCN issued on 5-1-1977 was not permissible for recovery of differential duty for the period 1-3-1974 to 23-10-1975. He also drew attention to the report appearing in 1991 (52) E.L.T. A102 stating that the Hon ble Supreme Court on 14-1-1991 had dismissed an appeal filed by C.C.E. Hyderabad against the Tribunal decision in Mopeds India Ltd. case (supra). In Neyveli Lignites Corpn. Ltd. v. C.C.E. [1992 (58 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llied Industries (P) Ltd. v. C.C.E. [1996 (82) E.L.T. 323 (T)] (f) M.P. Vegetable Fruit Products v. C.C.E. [1995 (76) E.L.T. 393 (T)] (g) Cosmic Dyechemical v. C.C.E. [1995 (75) E.L.T. 721 (S.C.)] (h)Lubri-Chem Industries Ltd. v. C.C.E. [1994 (73) E.L.T. 257 (S.C.)] (i) Rajshi Foam, Therm Pack v. C.C.E. - [1999 (109) E.L.T. 425 (T) = 1997 (20) RLT 161 (T)] (j)Carponics Pvt. Ltd. v. C.C.E. [1999 (107) E.L.T. 135 (T) = 1998 (29) RLT 697 (T)] 10. Shri P.K. Sahu, ld. Counsel submitted that date of knowledge was a relevant factor for issuing SCN under the proviso to Section 11A(1) and the proviso cannot be invoked for justifying the extended period of five years when the Department had knowledge and the SCN has to be issued within a reasonable period i.e., six months from the date of knowledge. He submitted that if the literary interpretation of a statutory provision results in an absurd situation the court can adopt a reasonable interpretation (CIT v. J.H. Gotla reported in 156 ITR 323 (S.C.). 11. Shri A.K. Jain, ld. Advocate submitted that there is no provision in the Act or in the Rules for constituting a Larger Bench of the Tribunal to hear issues which have already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suppression of facts/contravention of the provisions of the Act or Rules with intent to evade payment of duty, the SCN can be issued within five years from the relevant date instead of six months in contradiction to instances where the conditions specified in the proviso did not exist. There was therefore no scope for importing any new concept like date of knowledge on the part of the Department into the proviso to Section 11A(1). He referred to Crafords Construction of Statutes . at pages 240-245 and 266 . in support of his contention that there was no scope for importing any new concept into a statutory provision when its meaning is clear and unambiguous. Ld. JDR also drew attention to the fact that Mopeds India case (supra) relied on in some of the decisions of the Tribunal and cited by the ld. Advocates for the Interveners did not in fact interpret the provisions of Section 11A(1) or its proviso. That case arose in the context of the provisions of Rule 10 of the C.E. Rules, 1944 as it stood at the relevant time at that time under which the time limit prescribed was three months. It was Rule 10A of Central Excise Rules at that time, which provided a limitation period of one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant date. In terms of Section 11A(1) proviso, in a case where the subsisting duty liability had arisen on account of fraud, collusion etc. extended beyond a period of five years, the period for which such demand could be legally raised had only been restricted to five years. In a case where the duty liability on account of short-levy etc. has arisen in the normal course, i.e., not on account of suppression etc., the demand can be extended only to six months. 14. Ld. JDR further submitted that though there was no direct decision in support of his contention that date of knowledge is the date of issue of SCN, there are observations in many decisions of the Tribunal which supports the proposition that date of knowledge can be attributed only to the date on which the SCN is issued. He referred to the following decisions in this connection : (a) AIMS Oxygen Pvt. Ltd., Baroda v. Central Excise, Baroda [1988 (36) E.L.T. 151 (T)] (b) C.C.E. v. Metal Box India Ltd. [1989 (39) E.L.T. 79 (T)] (c) Jaishree Engineering Co. (P) Ltd. v. C.C.E. [1989 (39) E.L.T. 449 (T)]. 15. Further, the Tribunal orders in Metal Box India Ltd. case and Jaishree Engg. Co. case referred to above have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise Rules, 1944. The decision of the Tribunal in 1983 (14) E.L.T. 1927 (Shriram Pistons Rings Ltd., Ghaziabad v. Collector of Central Excise, Meerut) considers the effect of these provisions in juxtaposition. It was held therein that no period of limitation is prescribed for the levy of a penalty either in terms of Rule 9(2) or Rule 173Q; just as the limitation prescribed in Sec. 468 of the Cr. P.C. is inapplicable to a prosecution under Sec. 9 of the Act. The department has claimed that there was a suppression of fact. Shri A.K. Jain stated that no time-limit has been prescribed under Rule 9 and hence the demand is not time barred. But it must be pointed out that Rule 9(2) of the Central Excise Rules, 1944, at the relevant period read as follows : (2) If any excisable goods are, in contravention of sub-rule (1), deposited in or removed from, any place specified therein, the producer or manufacturer thereof shall pay the duty leviable on such goods upon written demand made (within the period specified in Rule 10) by the proper officer, whether such demand is delivered personally to him, or is left at his dwelling house, and shall also be liable to a penalty which may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Agrawal, Member (T) for self and on behalf of S/Shri Lajja Ram, Member (T) and S.S. Kang, Member (J)]. - I have the opportunity of going through the order as recorded by my learned brother Shri A.C.C. Unni, Member (Judicial). With due respect, I beg to differ from him for the following reasons :- 23.1On account of proviso to sub-section (1) to Section 11A of the Act, the sub-section provides 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, a Central Excise Officer may, within five years from the relevant date, serve notice on the person chargeable with the duty, requiring him to show cause why he should not pay the amount specified in the notice. It is thus apparant that in case of any of the specified reasons, mentioned in the proviso, if any Central Excise duty has not been levied or paid or has been short-levied or short-paid or erroneously refunded, a show cause notice may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. 478 (S.C.)] that the officers exercising powers under the provisions of the Act cannot ignore the provisions of the Act and the Rules. They are the creatures of the statute. They are bound by the provisions of the statute, ......an assessee is bound within the four corners of the Statute and the period of limitation prescribed in the Central Excise Act and Rules framed thereunder must be adhered to. If the proceedings are taken under the Act by the Department, the provisions of limitation prescribed in the Act will prevail. The Apex Court, further, in the case of U.O.I. v. Kirloskar Pneumatic Co. - 1996 (15) RLT 1 (S.C.) directed that the High Court cannot order the authorities to act contrary to law. The Supreme Court held that yet the question is whether it is permissible for the High Court to direct the authorities under the Act to act contrary to the aforesaid statutory provision. We do not think it is, even while acting under Article 226 of the Constitution.......In particular, the Customs authorities, who are the creatures of the Customs Act, cannot be directed to ignore or act contrary to Section 27.......... 24. The learned Counsel for the Intervener has relied upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty has not been levied or not-paid or short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of Act or Rules with intent to evade payment of duty and the show cause notice has been issued within 5 years from the relevant date as defined in sub-section (3) of Section 11A of the Central Excise Act. Sd/- (V.K. Agrawal) Member (T) Dated : 31-8-1999 25. [Order per : G.A. Brahma Deva, Member (J)]. - I have gone through the orders written by my learned brothers Shri A.C.C. Unni, Member (Judicial) and Shri V.K. Agrawal, Member (Technical) respectively. On going through the respective orders, I concur with the conclusion arrived at by my learned brother Shri A.C.C. Unni, for the reason that the words Knowledge and Suppression are exactly opposite terms. Knowledge means knowing, familiarity; fact of knowing: range of information or understanding. Suppression means to keep secret, not to reveal or in other words concealment of facts that ought to be made known. Although, the word Knowledge as such is not mere in the Section 11A(i) and its proviso neve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has the approval of the Apex Court, the order of the Tribunal is as that of an order of the Apex Court and is binding on the lower court and this position has been properly analysed by my learned brother Shri A.C.C. Unni in Para 18 of the order and the view expressed by him is concurred with. In the case of Sarwan Singh Lamba and Others v. Union of India and others reported in AIR 195 (sic) (S.C.) 1729 the Supreme Court held that normally even an obiter dictum is expected to be obeyed and followed. With this view that question referred to the Larger Bench is to be answered in the affirmative manner and accordingly, notice issued beyond the period of six months from the date of knowledge by the department of suppression fraud etc. will be barred by limitation under proviso to Section 11A(i) of the Act. Sd/- (G.A. Brahma Deva) Member (Judicial) FINAL ORDER 26. By majority it is held that the date of knowledge by the department is not relevant according to the provisions of Section 11A and the notice issued beyond the period of six months from the date of knowledge will not be barred by limitation. Sd/- (G.A. Brahma Deva) Member (Judicial) Sd/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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