TMI Blog1991 (10) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... tification No. 166/80-Cus., dated 19-8-1980 and the Bill of Entry was assessed finally on 10-11-1986 without charging to duty. The learned Additional Collector held that the consignment should not have been granted the benefit of notification in question as the goods in question did not satisfy the condition laid down in the said notification. Therefore, he directed the Assistant Collector (Appeals) Customs House, Visakhapatnam to appeal to Collector (Appeals) to seek review of his own decision given on the Bill of Entry on 10-11-1986 at the time of final assessment. 3. The Appeal No. 3921/88-C pertains to rejection of the application filed by the Additional Collector of Customs, Visakhapatnam under Section 129D of the Customs Act, 1962. In this case, the respondents had filed a bill of entry dated 13-11-1986 for clearing a consignment of 1,320 mt. tonnes of low ash metallurgical coke (LAM Coke). The goods were assessed provisionally free of duty under Customs Notification No. 166/80 and the samples were drawn for test. 50% of the cargo was released pending receipt of the test report. Thereafter, the goods were released in full on 24-11-1986 on the Bill of Entry being finally ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat time limit of one year prescribed under Section 129D(3) is possibly to include such cases where review by the Collector required finalising of an appeal against an order passed by his subordinates. In that view of the matter, they contended that the Collector (Appeals) was justified in rejecting their appeal. 6. The respondents in E. No. 3920/88-C, i.e. M/s. Ferro Alloys Corporation Ltd., have filed a Cross Appeal No. 452/88-C. They have also filed written submissions made in the cross appeal. It is contended by the importer that the provisions of Section 28(1) of the Act will prevail and that the review cannot circumvent the limitation laid down under Section 28(1) of the Act by invoking the period of one year provided under Section 129D of the Act. They contended that provisions under Section 129D can be invoked only when there is a decision or order issued in quasi-judicial capacity and such orders cannot be equated to written assessment to the type covered in the instant case. It is further stated that if the contention of the Revenue is accepted, then the sanctity of time limit laid down under Section 28(1) would be defeated. In their written statement, the respondent-im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 28 of the Customs Act. In this connection, he relied upon the ruling rendered by the South Regional Bench in the case of Collector of Central Excise, Bangalore v. Raman Board Limited - 1985 (22) E.L.T. 892. In this case, the Tribunal had examined the provisions of Sections 35, 35A, 35E vis-a-vis Section 11A of the Central Excises and Salt Act and had held that the provisions of Sections 11A and 35A were operating entirely in different fields with different objects and purposes and one cannot superimpose on the other. The Tribunal had also distinguished the ruling rendered by the Calcutta High Court in the case of S. Venkatesan and Another (supra). He also referred to the ruling of the Calcutta High Court in the case of I.T.C. Ltd. v. Union of India as reported in 1988 (34) E.L.T. 473 wherein the Calcutta High Court had examined the provisions of appeal under Section 35A and Section 35EE of the Central Excises and Salt Act alongwith the provisions of Section 11A and 11B of the said Act. The Court had held that Section 11A of the Act was provided as a substantive provision and complete code for realising excess duty in case of short levy or short payment and Section 11B of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, shall only nullify the effect of Section 11A of the Act and its time-limit. He strongly relied on the ruling of S. Venkatesan case (supra) and held that it had a binding force in view of similar provisions of Customs Act. He further submitted that the Madras High Court in Pilman Agent case (supra) had categorically stated that issue of show cause notice is a must for recovery of non-levy of duty under Section 28 of the Act. He strongly relied on the ruling given by the Supreme Court in the case of Gokak Patel case (supra) and Kosan Metal case. The Supreme Court in the case of Gokak Patel case had held that service of show cause notice was a statutory provision for recovery of duty under Section 11A of the Act and if the show cause notice had not been issued, then the demand would not be enforceable as being contrary to the provisions of the Statute. He further stated that the Hon ble Supreme Court in the case of Dr. Pratap Singh case (AIR 1985 SC 989) had defined the words so far as may be occurring in Section 129D of the Act and submitted that the said interpretation should be applied for the provisions occurring in Excise Act vis-a-vis with the provisions of the Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as provisional. The Revenue was not aggrieved with this order initially and did not prefer an appeal under the provisions of Section 128 of the Customs Act. The limitation provided under Section 128 of the Customs Act is 3 months and on sufficient cause being shown for non-filing and the Collector (Appeals) being satisfied could allow the extension of time for presenting the appeal by a further period of 3 months. The Collector of Customs did not invoke Section 128 of the Customs Act within the said period laid down under Section 128 of the Customs Act. The provision under Section 28 of the Customs Act provides for recovery of non-levy, short levy or erroneous refund. The provision of this section requires issuance of show cause notice within one year in respect of any individual, who has imported the goods for his personal use or by Government or by any research or charitable hospital and in any other case within 6 months from the relevant date of payment of duty. It further lays down that in case of non-levy, short levy or erroneous refund by reason of wilful suppression or suppression of facts by the importer or the exporters or the agent or employee of the importer or exporter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Tribunal Act, 1986) or the Collector (Appeals) within a period of three months from the date of communication of the order under sub-section (1) or sub-section (2) to the adjudicating authority such application shall be heard by the Appellate Tribunal (or as the case may be the Customs and Excise Revenues Appellate Tribunal) or the Collector (Appeals) as the case may be, as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals including the provisions of sub-section (4) of Section 129A (or as the case may be the provisions of the Customs and Excise Revenues Appellate Tribunal Act, 1986) shall so far as may be, apply to such application." 13. The question now is as to whether after the order of finalisation of the bill of entry has become final under the Customs Act can the Collector of Customs within his powers on his own motion could call for, and examine the records of the proceedings of the Asstt. Collector to satisfy himself as to the legality or propriety of such finalisation. If so, could he direct such authority namely Assistant Collector either to Collector (Appeals) for det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue of show cause notice and to allow the party to have a full hearing on the charges that would be made against them. This proceeding under Section 28 are of exclusive nature, inasmuch as, an independent proceedings are held by issue of show cause notice by the Department by which it sets out the reason for claiming non-levy, short-levy relying on its evidence or gives the reasons for rejecting the refund claims again relying on its evidence. If an extended period is invoked, then the entire evidence on which the Department relies is stated in unambiguous terms so as to make out a case for recovery beyond the period of 5 years. In case if this procedure is not followed, the proceedings get vitiated and the recovery would be bad in law. The assessee gets full opportunity to know the charges levelled by the Revenue as well as the evidence on which the charges are levelled. The assessee also can in turn, place their case with supporting evidence in defence. The cases arising other than in non-levy, short-levy and erroneous refund under the Act may not have this feature of issue of show cause notice and disclosing the evidence to the assessee and giving opportunity to defend themselv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, the demand is in contravention of the statutory provisions. Certain other authorities have been cited at the hearing by counsel for both sides. Reference to them, we consider, is not necessary. From the above reading, it becomes very clear that the issue of show cause notice under Section 11A is mandatory and it is a statutory provision under the requirement. Thus it can be clearly said that the provisions of Section 28 of the Customs Act and Section 11A of the Act are exclusive in nature on account of special feature of issuance of show cause notice. This feature cannot be circumvented. In a similar situation under Excise Act, where classification list had not been challenged by the Revenue by filing appeal under Section 35 of the Excise Act but preferred to have the matter reviewed under Section 35E of the Act, after the expiry of statutory period under Section 11A of the Act, the Tribunal has held that by following such a procedure, would make Section 11A nugatory. This view has been expressed in the case of Collector of Central Excise v. Universal Radiators Ltd. - 1988 (37) E.L.T. 222 in para 9, 10 which is noted below - The only way by which an erroneously re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 12-10-1981 should not be set aside and necessary orders as deemed fit passed. Not only did this notice contain no demand, but it is about one year and seven months after the date of the Assistant Collector s order of refund. Nor does the notice allege any malpractice, fraudulence and suppression etc. The Collector (Appeals) thinks that because the review was done before expiry of two years under Section 35E it would enable recovery of the sum erroneously refunded. But he also says that appeal had been filed within 5 years from 12-10-1981 and therefore, it would not be time barred because of the proviso to Section 11A. The five year time limit is not available for the purpose of turning an appeal or an application into a demand contemplated by Section 11A nor can it insulate the application/appeal from time bar. When any excise duty has been erroneously refunded. Section 11A requires that the Central Excise Officer should decide within six months from the relevant date, serve a notice on the person to whom the refund was erroneously made, requiring him to show cause why he should not pay the amount specified in the notice. In case of erroneous refund, the relevant date ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the provisions fS etM 35A/or 35E of the Central Excises and Salt Act. The relevant portion as appearing in para 29 at page 501 of the report in the case of I.T.C. Ltd. Another v. Union of India Others - 1988 (34) E.L.T. 473 (Cal.) which is reproduced below - 29. Finding on Point (c). - With regards to the next contention of Mr. Nariman about the scope and ambit to provision of Section 11A of the Central Excises and Salt Act, 1944 it appears to me that Section 11A of the said Act provides provision for recovery of duties not levied or not paid or short levied or short paid or erroneously refunded. It is evident that whenever the excise duty has not been levied or not paid or has been short levied or short paid, the power under Section 11A [could be invoked, but before an order is passed, a show cause notice has to be issued ...... sic] could not be issued, in other words, it is the requirement of law that only after giving a notice and hearing, a party who has not paid proper excise duty, can be made liable to pay the said duty. In this context, reference be made to the provision of Section 11B of the said Act, which provides claim for refund of duty and on plain readin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which it had expressed and that the words of enactment must prevail. Under the scheme of the said Act, Section 11A of the said Act was provided as a substantive provision and a complete code for realisation of excise duty in case of short levy or short payment and Section 11B of the said Act also provided the substantive and the machinery provision for refund of any excess excise duty paid which is also a complete code for the same. Parliament introduced a simplified procedure for recovery of the excise duties not paid or short paid etc. and at the same time provided same procedure for the benefit of the assessee for getting refund of duty. The twin sections - Section 11A and 11B were introduced in the interest of the revenue as well as the assessee and that, that is the reason why the legislature had not laid down any condition precedent and/or restriction in the matter of exercise of its powers under 11A or 11B of the said Act. In my view also the decision referred to by Mr. Nariman decided by the Tribunal reported in 1987 (29) E.L.T. page 933, had not correctly decided the law on the subject and I hold that the said Tribunal had not correctly interpreted the provision of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion as sought to be given by Mr. Nariman is to be given in Section 11A of the said Act, it would produce a wholly unreasonable result and would also defeat obvious intention of the legislature and further the court has to do some violence to the words which in my view, is not permissible. In this connection I may quote the observation of Lord Scarman of the House of Lords, in the case of Duport Steels Ltd. v. Sirs and Others reported in (1980) 1 All ER page 529 at 551, But in the field of statute law the judge must be obedient to the will of the Parliament as expressed in its enactments. In this field Parliament makes and unmakes, the law, the judge s duty is to interpret and to apply the law, not to change it to meet the Judge s idea of what justice requires. Interpretation does of course imply in the interpreter a power of choice where differing constructions are possible. But our law requires the judge to choose the construction which in his judgment best meets the legislative purpose of the enactment. If the result be unjust but inevitable, the judge must say so and invite Parliament to reconsider its provision. But he must not deny the statute. Unpalatable statute law must n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar case arising in the case of Akola Oil Industries Ltd. v. Collector of Central Excise - 1991 (53) E.L.T. 136 (Tribunal). In this case, this Bench examined the provisions of Section 11A of the Central Excises and Salt Act and the said findings in para 4 to 5 are given below - It is very clear that the Collector had acted beyond his competence and jurisdiction, the very views he attributed to the Assistant Collector. The Collector is undoubtedly correct when he says that the Asstt. Collector was, when he passed his order of 9-12-1986 not competent to do so and should have transferred the proceedings to the Collector for adjudication. But the question is whether the Collector in exercising his purported powers under the amended Section 11A of the Act was acting within the jurisdiction. The Assistant Collector s order dated 9-12-1986 was undoubtedly an illegal order. But right or wrong, it was an order passed by an order of Central Excise and it could have been nullified only in a manner sanctioned by law. At the relevant time, the Collector had no power to review or revise the Assistant Collector s order. He could only direct the Assistant Collector in terms of Section 35E of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. If such was the result intended by the legislature, it would amount to taking away something with the left hand which was given with the right hand. There can be no extension of the customs right without corresponding extension of the citizen s obligations. Interest of revenue cannot be pleaded in extension of such right in favour of the Customs authorities. Equity has no place in the law of limitation and we are to construe these provisions strictly. It can never be right to think that the legislature intended to keep alive in favour of the Customs, in this indirect manner, a claim already extinguished by efflux of time. In our view, there is no real conflict between Section 39 and Section 190A, and even if there was one, it would be the business of the Courts to harmonise the two provisions so as to provide a workable and well-reasoned basis on which each might fulfil its purpose in aid of the object of the enactment. Section 190A which is a new provision introduced in 1955, embodies the experience of the working of the Act. Words of wide import appear to have been deliberately chosen so as to give the Chief Customs authority power to exercise effective control over all matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enable the Chief Customs Authority to exercise a general power of superintendence over decision and orders made by subordinate officers of the customs a longer period of limitation has been prescribed. This is quite understandable but surely the period of limitation in Section 190A cannot override the express provision in Section 39 which limits the issue of notice of demand for payment of duties not levied or short levied or erroneously refunded to a period of three months." 19. After careful examination of the provisions of the Act and the case law, it can be safely presumed that the provisions of Section 28 of the Customs Act are exclusive in nature. After finalisation of the assessment, the parties can file appeal under Section 128 of the Act or the Department can raise non-levy, short levy and erroneous refund by issue of show cause notice within 6 months and in the other circumstances explained in the provisions, the Collector can invoke the larger period of 5 years also. 20. In this case, the Department has not reopened the assessment under Section 28 nor filed an appeal after final assessment under Section 128 of the Customs Act, therefore, the Department cannot resort ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
