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TMI Blog1989 (7) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be demanded from them and debited in their PLA. The respondents herein submitted a reply to the show cause notice. A hearing was also granted to them. The following pleas appear to have been made and dealt within the order-in-original dated 26-12-1979 which are reproduced below :- "(i) That under the Notification, rebate has been allowed on excess production and not on the actual amount of duty paid on clearances. This plea of the party is not acceptable on the ground that the exemption has been granted under Rule 8(1) of Central Excise Rules, 1944 and extent of exemption cannot exceed the amount of duty liability. (ii) That in case duty paid on both levy and free sale sugar are combined together, the amount of duty actually paid will exceed the amount of rebate actually allowed. This plea too is also not acceptable on the ground that under the said notification, two different rate of exemption has been prescribed for levy and free sale sugar and as such the question of adding both the figures does not arise. (iii) It has also been pleaded that the said notification does not distinguish between the basic and additional excise duty and if both additional and basic dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding that the amount was more than the duty paid." Hence this appeal by the Collector before the Tribunal. 2. In the meantime, the judgment of Bombay High Court in the case of Someshwar Sahakari Sakhar Karkhana Ltd. & Others v. Union of India & Others [1988 (34) E.L.T. 522 (Bom.)] has been published which holds that "Under the Notification No. 108/78, dated 28-3-1978 no exemption could be claimed exceeding the amount of duty otherwise payable. It is not the scheme of the Act or the notification that the exemption could exceed the actual payment of the duty. If the amount is to exceed the amount of duty payable then it is not an exemption but something more and therefore, we agree with the view taken by the learned Appellate Commissioner (Collector ?) that the petitioners will be entitled to rebate or exemption qua the amount of duty actually paid or payable by them on clearance of the goods and nothing more." [Para 6 of the Report]. 2.1. In view of the aforesaid judgment of Bombay High Court the learned advocate Shri Sanjay Grover for the respondents has made an application on their behalf to raise a ground of limitation against the demand of Rs. 65,759.87p to the ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quoting from Supreme Court's judgment in the case of Hukam Chand Mills v. Commissioner of Income Tax, Central Bombay [AIR 1967 SC 455] and Bombay High Court's judgment in the case of New India Life Assurance Corporation Ltd. v. Commissioner of Income Tax, Bombay [AIR 1958 (Bom.) 143] held that the words "the Appellate Tribunal ........pass such orders thereon as it thinks fit........." in Section 35-C of the Central Excises and Salt Act, 1944 include all the powers (except possibly the power of enhancement) which are conferred upon the lower authorities to hold a further enquiry could dispose of the case on the basis of such enquiry. 3. Learned DR Shri L.C. Chakraborthy appearing for the appellant-Collector has urged that the respondents should not be allowed to make this new additional ground of limitation at this stage because it was never taken before any of the two lower authorities. He relies in particular on Supreme Court's judgment in the case of M.S. Gill & another v. Chief Election Commissioner [AIR 1978 SC 851 para 8]. Para 8 of the Supreme Court's judgment in the said report being a short one is reproduced below :- "8. The second equally relevant matter is that wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibition laid down in para 8 of the Supreme Court's judgment in AIR 1978 SC 851 appears to be directed against the authority who passed the administrative order by giving fresh reasons in the shape of affidavit or otherwise. Tribunal's powers in Section 35-C of the Act as laid down in Supreme Court's judgment in the case of Hukum Chand Mills, Bombay High Court's judgment in the case of New India Assurance Co. and Gujarat High Court's judgment in the case of 1977 (107) ITR 683 appear to be applicable to the facts and circumstances of this case. We, therefore, allow the respondents to raise the ground of limitation. 5. Now, on the merits of the case learned DR for the appellant-Collector has urged that there is a decision of Bombay High Court in the case of Someshwar Sahakari Sakhar Karkhana Ltd. mentioned supra which settles the issue. In that case this very notification namely 108/78 dated 28-4-1978 was involved and the High Court has ruled that the department was correct in interpreting the notification as not giving an exemption exceeding the duty paid on free sale sugar despite the fact that specific rate of exemption to the tune of Rs. 54/- per qtl. was given in said notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itation or not. 8. We have carefully considered the pleas advanced on both sides. While we agree with the learned DR's plea that Bombay High Court's judgment in Someshwar Sahakari Sakhar Karkhana's case dealt with the point of limitation, we feel that it did not consider the question whether the show cause notice was within six months of the date of clearance of the incentive sugar or not. It is no doubt true that the initial rebate granted to the sugar factories on excess production in terms of notification 108/78 was provisional in nature in view of the procedure of grant of such rebate and collection of duty on such incentive sugar circulated by the Collectors separately. Nevertheless, the point of limitation of the show cause notice has to be seen with reference to the dates of clearances of such incentive sugar because as already stated the duty was finally paid on such sugar on its date of clearance. Hence in terms of Rule 10 show cause notice for recovery of any duty could be made within six months from the date of clearance of such incentive sugar. Since no such data is available on record we are constrained to remand the matter to the original adjudicating authority ..... X X X X Extracts X X X X X X X X Extracts X X X X
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