TMI Blog2011 (6) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... he recovery notice was issued after a lapse of more than a year of the rescission of the notification – Held that:- provisions of said Section 38A, the department’s right of recovery of credit of duty availed as well as respondent’s obligation/liability to pay or to reverse the credit availed, are not vitiated and action taken under Notification 201/79, dated 4-6-1979 survives even after its recession. demand for recovery of set-off/credit of duty paid on inputs taken under Notification No. 201/79-C.E., dated 4-6-1979 is sustainable in law. - E/579/2004-Mum - A/485-486/2011-WZB/C-II(EB), - Dated:- 21-6-2011 - S/Shri Ashok Jindal, P.R. Chandrasekharan, JJ. Shri Kishori Lal, SDR, for the Appellant. S/Shri D.B. Shroff, Sr. Advocate with Vipul Bilwe, Advocate, for the Respondent. [Order per : P.R. Chandrasekharan, Member (T)]. This appeal is directed against the order-in-appeal No. RJB/M-III/468/2003, dated 23-10-2003 passed by the Commissioner of Central Excise (Appeals), Mumbai-III. In the said order, the Commissioner (Appeals) had allowed the appeal filed by the appellant, M/s. Ceat Ltd. and set aside the order-in-original No. 19/2003-04, dated 10-6-2003 passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent are as below. 4.1 The respondent availed set-off under Notification No. 178/77-C.E., dated 18-6-1977 and Notification No. 201/79-C.E., dated 4-6-1979 during the period from 1-8-1978 to 9-9-1980 after following the procedure laid down in the said notifications and after giving due declarations. Notification No. 201/79-C.E., was rescinded by Notification No. 186/86, dated 1-3-1986 and there was no saving clause in the rescinding notification. More than seven years after taking set-off, the jurisdictional Superintendent has issued four demand notices - (1) notice dated 13-11-1987 directing the respondent to reverse the credit of Rs. 6,65,871/- for the period from 23-7-1980 to 9-10-1980; (2) demand notice dated 19th November, 1987, for reversal of credit amounting to Rs. 2,81,293.65 for the period 1-8-1978 to 31-8-1978; (3) demand notice dated 11th February, 1988 for reversal of credit amounting to Rs. 42,52,809.26; and (4) notice dated 13th April, 1988, for reversal of credit amounting to Rs. 46,43,921.90. On receipt of these demand notices, they had written to the supplier, M/s. National Rayon Corporation for reimbursement of the duty paid by them. M/s. National Rayon Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which credit has been taken) is varied subsequently due to any reason resulting in payment of refund to or recovery of more duty from the manufacturer of the inputs, the credit taken shall be varied accordingly by adjustment in the credit account maintained under paragraph 6 of this Appendix or in the account-current maintained under sub-rule (1) of Rule 9 or sub-rule (1) of Rule 173-G of the Central Excise Rules, 1944, or if such adjustment be not possible for any reason, by refund to, or, as the case may be, fresh recovery from, the manufacturer of the said goods. Thus it is seen that no time limitation has been prescribed under Notification No. 201/79 for recovery of the credit wrongly taken. 4.4 In such cases where the provision does not prescribe any specific time limit, then the demand has to be raised within a reasonable time as has been held by the Hon ble Apex Court in the case of Government of India v. Citedal Fine Pharmaceuticals - 1989 (42) E.L.T. 515 (S.C.) wherein the Court held that - in the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period. What would be the reasonable period would d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h v. Smithkline Beecham Consumer Health Care Ltd. - 2003 (151) E.L.T. 5 (S.C.) had held that - A bare reading of Section 11A makes it clear that it deals with the recovery of duty not levied or not paid or short levied or short-paid or erroneously refunded. Scheme under Notification No. 201/79-C.E. operated in a different field altogether. Therefore, any demand or recovery for the set-off of duty availed has to be as per provisions of Notification No. 201/79-C.E., and not under Section 11A of Central Excise Act, 1944. On this basis the learned D.R. would submit that in respect of set-off of credit taken under Notification No. 201/79-C.E., the statutory time limit six months or five years, as the case may be, will not apply and, therefore, the argument of the assessee that the demand has to be raised within those time limits has no merits whatsoever. 5.2 The learned D.R would also rely on the Judgment of the Tribunal in the case of Collector of Central Excise, Allahabad v. Hindustan Aluminium Corporation, Mirzapur - 1987 (28) E.L.T. 529 (Tri.) wherein this Tribunal had held that the demand for recovery of set-off of duty wrongly availed under Notification No. 201/79 is distinct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or order issued under such rule, is amended, superseded or rescinded, then, unless a different intention appears, such amendment, repeal, supersession or rescinding shall not affect the previous operation of any rule, notification or order so amended, repealed, supersession or rescinded or anything duly done or suffered thereunder. Further such amendments shall not affect any right, privilege, obligation or liability acquired, accrued or incurred under any rule, notification or order so amended, repealed, superseded or rescinded . In view of the provisions of said Section 38A, the department s right of recovery of credit of duty availed as well as respondent s obligation/liability to pay or to reverse the duty availed, are not vitiated for the period during the Notification 201/79, dated 4-6-1979 was in operation. 6. We have very carefully considered the rival submissions. 6.1 It is seen that the respondent had availed set-off of duty paid on tyre cord warp sheets used in the manufacture of tyres under two Notifications viz. 178/77-C.E., dated 18-6-1977 as amended for the period from 1-8-1978 to 3-6-1979 and thereafter under Notification No. 201/79-C.E., dated 4-6-1979 as amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of recovery of the credit taken of the duty paid wrongly would arise. From the records of the case, it is seen that the jurisdictional Asst. Commissioner, Kalyan-I (of the manufacturer of inputs) vide a series of 26 letters issued from November, 1987 to March, 1988, informed the Superintendent of the Central Excise, Range-III, Mulund Division (of the respondent who had availed the credit) that - refund was sanctioned to M/s. National Rayon Corporation in respect of the gate passes mentioned in the said letters and directed the said Superintendent that if CEAT had availed proforma credit under Rule 56A of the Central Excise Rules, 1944 or availed the credit of duty paid against each of the gate passes mentioned in the above said letters, under notification No. 201/79, dated 4-6-79, the same may be reversed and particulars thereof may be intimated to him. Immediately thereafter, the jurisdictional Range Superintendent has issued demand notices dated 13-11-987, 19-11-87, 11-2-1988 and 13-4-1988. Thus it is seen that the demand notices for recovery of credit wrongly taken has been issued immediately after the cause of action arose. Therefore, we hold that the demand not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Corporation, M/s. Ceat Ltd. are responsible and liable for reversal of the said credit and in case no such adjustment is possible, they are liable to discharge the liability in cash and we hold accordingly. 6.4 As regards the argument of the respondent that notification No. 201/79-C.E. was rescinded in 1986 without any savings clause and the recovery notice was issued after a lapse of more than a year of the rescission of the notification, we find that this argument does not have merit for the following reason. Section 38A was inserted in the Central Excise Act, 1944 with retrospective effect from 28th February, 1944 vide Section 131 of the Finance Act, 2001. Section 132 of the Act provided for the validation of the actions taken as if Section 38A was in force from that date. Section 38A provides that that where any rule, notification or order made or issued under the provisions of Central Excise Act, 1944 or under notification or order issued under such rule, is amended, superseded or rescinded, then, unless a different intention appears, such amendment, repeal, supersession or rescinding shall not affect the previous operation of any rule, notification or order so amended, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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