TMI Blog1988 (7) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the generating station, Industrial Unit or an establishment, and is subsequently used in such generating station including Auxiliary Plant, if any. A show cause notice dated 2.1.1982 was issued to the appellants asking them to explain why Central Excise duty on electricity consumed during the period from 1.3.1978 to 31.10.1981, should not be recovered under Rule 9(2) and why penalty should not be imposed on them under Rule 173Q(2) and Rule 210 of the Central Excise Rules, 1944. The appellants contended before the Collector of Central Excise, Patna, who adjudicated the case, that the electricity consumed by them within the plant was much more than the electricity generated by them in their own plant and as such it should be presumed that the entire quantity of electricity generated by them was consumed within the plant and therefore the benefit of Exemption Notification No. 52/78-CE dated 1-3-1978 was admissible to them. The Collector of Central Excise, Patna did not accept the contention of the appellants. In the impugned order, he held that the benefit of exemption could not be granted to the appellants on the basis of presumption. As the electricity generated by them got mix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 of the order) in the case of Steel Authority of India Ltd. Durgapur v. Collector of Central Excise, West Bengal, Calcutta. 3. Another argument of the learned advocate was that the Collector s order was a demand for duty. He was not competent to demand duty. He demanded duty under Rule 9(2) which was not correct as Rule 9(2) was not applicable in the present case, there being no clandestine removal of electricity. The correct provision of law for raising demand for duty is Section 11 -A of the Central Excises and Salt Act, 1944. Under Section 11A the Collector of Central Excise was not the competent authority to confirm the demand. In supportof this argument, the learned advocate relied on the decisions reported in (i) 1987 (29) ELT 304 {Tribunal) - Order No. 233/87-D, dated 26.3.1987 - in the case of Kuwality Containers (P) Ltd., Bombay v. Collector of Central Excise, Bombay, (ii) 1987 (27) ELT 538 (Cegat) - Order No. 954/86-D, dated 11.12.1986 - in the case of Kuwality Containers Pvt. Ltd. v. Collector of Central Excise, Bombay and (iii) 1987(27) ELT 394 (Cal.) In the case of State of West Bengal and others v. Bio Drug Lab: (P) Ltd. (paragraph 31 of the judgment). 4. Arguing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CR-2164(Cegat), in paragraph 61 of the said order, this Tribunal held as follows :- However, we find justification in the plea made alternatively that in any case in view of the previous stand consistently conveyed to the party, the demand for recovery of duty retrospectively could not be sustained .......we, therefore, think that it will be both justified in law, as well as in equity, if the demand for excise duty by reference to T.I. 68 for these products is held enforceable with effect from the date of the Show Cause Notice, i.e. 24.9.1980." In paragraph 35 of the decision reported in 1985 (22) ELT 487 (Tribunal) in the case of M/s. Steel Authority of India Ltd. on which the learned advocate has placed reliance, this Tribunal observed as follows :- 35. There can be, thus, no disputing the contention of appellants that there was no justification in applying the period of 5 years from the date of issue of show cause notice. What requires consideration is the further contention of appellants that the Excise authorities could not go back even six months from the date of show cause notice assuming that department s stand on classification was correct, because of there being n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court reported in 1985 (22) ELT 751 (Kar.), has held in a number of cases that a classification list approved by an Assistant Collector can be re-opened and re-assessed under Section 11A of the Central Excises and Salt Act, 1944 and duty can be demanded under that Section for a period of six months prior to the issue of the show cause notice under Section 11-A(1), we do not follow the ratio of the earlier decisions of the Tribunal relied on by the learned advocate. 7. .According to the provisions of Section 11A of. Central Excises and Salt Act, 1944 (corresponding to Rule 10 of the Central Excise Rules, 1944) demand for Central Excise Duty which has hot been levied or paid or which has been short-levied or short-paid can be raised for a period of six months prior to the date of issue of the notice. A view contrary to this, will make the provisions of Section 11 -A of the Act redundant. The question whether the classification approved by the Assistant Collector could be re-opened by him, was considered by Karnataka High Court in the case of Shyam Sundar V. Nichani v. Assistant Collector of Central Exctee, Bangalore and another, decided on 20.9.1985 and reported in 1985 (22) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it appears that any person claiming refund of any duty of excise may make an application for refund of such duty before the expiry of six months. This power under Section 11-B of the said Act is independent of the case when such refund is allowable as a result an order passed in appeal or revision under the Act. Mr. Nariman referred to the proviso to sub-section (3) of Section 35-A of the said Act, wherein it was provided that where the Collector (Appeals) is of the opinion (that) any duty of excise has not been levied or has been short-levied or short-paid, etc., no order requiring the appellant to pay any duty not levied or not paid, short-levied or short-paid, etc., shall be passed unless the appellant is given a notice within the time limit specified in Section 11-A to show cause against the proposed order. This proviso to sub-section (3) of Section 35-A of the said Act clearly indicates that it is independent of the provisions of Section 11 -A of the said Act and on plain reading of Section 11-A and proviso to Section 35A(3) of the said Act. It is clear that the submission of Mr. Nariman that Section 11-A is a mere machinery section and cannot be exercised independently but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produce a wholly unreasonable result in my view, the Court will not interpret a statute which would give rise to a destructive analysis. This is not a case where the provision of Section 11-A is capable of two alternative interpretations. Even interpreting a revenue statute, the Court should examine the substance and not merely form of the language and should mould the taxing statute so far as possible to achieve the legislative intent and also to meet with the change of social needs. It is no longer the duty of the court to interpret a statute strictly to help the evasion. Its duty is to construe in a manner which will suppress the evasion of tax or duty. In this particular case, the petitioner was admittedly enjoying a concession and/or exemption and the provision of notification giving concession and/or exemption should not be construed liberally in favour of the tax-payer defeating the purpose of the legislation. Even interpreting the provision of law, the Court will try to ascertain the mischief which the statute intended to remedy from the whole of the enactment and the existing state of law. The object of Section 11-A was for recovery of duty short-paid or short-levied and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eafter, the present order is being issued by the Bench disposing of the appeal. Sd/- xxx Sd/ xxx Sd/- xxx (K. Prakash Anand) Member (V.T. Raghavachari) Member (G. Sankaran) Vice-President Dated : 26.3.1987" The Order No. 233/87-D, dated 26.3.1987 was reported in 1987 (29) ELT 304 (Tribunal). In paragraph 14 of the said order one of the Members expressed his opinion about the Collector s jurisdiction to demand duty under Section 11-A of the Central Excises and Salt Act, 1944. The other two Members of the Bench deciding that case did not, however, express any opinion regarding the Collector s jurisdiction to demand duty under Section 11-A as would be seen from paragraph 19 of the order recorded by Shri G. Sankaran, Vice-President and concurred by Shri K. Prakash Anand, Member (Tech.). Paragraph 18 of the said order would show that the Tribunal decided the case on merit only and did not consider the point of jurisdiction of the Collector under Section 11 -A. In the circumstances, the decision reported in 1987 (29) ELT 304 (Tribunal) does not help the case of the present appellants. Order reported in 1987 (29) ELT 539 (Tribunal) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rriving at the above decision. South Regional Bench of the Tribunal considered the decisions reported in AIR 1961 SC 751 (State of Uttar Pradesh and Others v. Babu Ram Upadhya),1986 (26) ELT 611 (Tribunal) -(Chetan Engineering Corporation Ltd. v. Collector of Central Excise, Coimbatore), 1985 (19) ELT 272 (Tribunal) - (Piya Pharmaceutical Works v. Collector of Central Excise, Meerut), 1987 (29) ELT 304 (Tribunal) -(M/s. Kuwallty Containers (P) Ltd. v. Collector of Central Excise, Bombay) and 1983 ELT 1057 (Cegat) - (S. Kumar and Others v. Collector of Central Excise and Others). The decision reported in 1983 ELT 1057 is the decision of Larger Bench of this Tribunal in which it was held that apart from the general proposition that statutory rules are part of the Act, in the peculiar scheme of Central Excise Act, the Rules are certainly supplementary as well as complementary to the provisions of the Act. In this connection, findings of the Bench in paragraph - 58,59 and 60 of the said decision are quoted below:- 58. The peculiar features of the Central Excises Act further strengthen the view that in the setting of this Act, rules were meant to enjoy a very crucial and significant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered inferior or secondary to the Act. We have thus no hesitation in saying that apart from the general proposition that statutory rules are part of the Act; in the peculiar scheme of Central Excises Act, the Rules are certainly supplementary as well as complementary to the provisions of the Act, and are to provide for everything which is not covered by the provisions of the Act, and the definition of Collector being one of such omissions; .the one given in the Rules has to prevail as having been supplied by them." In another recent decision vide Order No.121/88-C, dated 8.2.1988, in the case of UP Laminations, Unnao (U.P.) v. Collector of Central Excise, Kanpur, reported in 1988 ETR (Vol.11, Part 6) - Page 661, this Tribunal has held that Collector of Central Excise can exercise the power of Assistant Collector of Central Excise, under Section 11-A(2) of the Central Excises and Salt Act, 1944. 10. The demand for duty confirmed by the Collector of Central Excise for a period of six months prior to the issue of show cause notice is legal and valid and the same does not deserve interference by this Tribunal, in the circumstances, the impugned order is upheld and the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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