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TMI Blog2011 (6) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... ts from M/s. National Rayon Corporation, Kalyan during the period from August, 1978 to September, 1980. At that time the said sheets were classified under Tariff Item 68 of the erstwhile Central Excise Tariff and M/s. National Rayon Corporation discharged the duty liability accordingly, under protest. The assessee M/s. CEAT Ltd. took benefit of set-off of the duty paid on Tyre Cord Warp Sheets under Notification No. 178/77-C.E., dated 18-6-1977 during the period from 1-8-1978 to 3-6-1979 and under Notification No. 201/79-C.E., dated 4-6-1979 for the period from 4-6-1979 onwards. Subsequently, the issue of question of Tyre Cord Warp Sheets was decided by the Hon'ble Apex Court in the case of DCM v. State of Rajasthan [1980 (6) E.L.T. 383 (S.C.)] and the classification was changed from Tariff Item 68 to Tariff Item 19/Tariff Item 22 of Central Excise Tariff. Under the revised tariff item, there was no duty liability on Tyre Cord Warp Sheets and, accordingly, M/s. National Rayon Corporation applied for refund of duty paid under protest and the same was granted to M/s. National Rayon Corporation. Pursuant to this, the jurisdictional Superintendent issued a series of four letters direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the same has been issued during November, 1987 to April 1988, i.e., after a lapse of more than 7 years. Therefore, the demands are time-barred and they are not liable to reverse the credit of duty which they have availed under the aforesaid notifications. The time limit for reversal of credit under Section 11A of the Central Excise Act, 1944, as it stood at the relevant time was six months and the demand has been issued after seven years. Therefore, the demands are time-barred and they rely on the judgment of the Hon'ble Bombay High Court in the case of Zenith Tin Works (P) Ltd. v. UOI & others - 1986 (23) E.L.T. 357. 4.3 Even assuming that the demands are sought to be recovered under the provisions of Notification No. 201/79 and there is no period of limitation prescribed under the said notification, it is a well-settled position in law that when there is no period of imitation prescribed, the demand has to be raised within a reasonable period. It is their further contention that under Notification No. 178/77, on the basis of which the set-off duty was taken during the period from 1-8-1978 to 3-6-1979 there was no provision for recovery of the credit taken in the said n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or demand for recovery was made within reasonable period. No hard and fast rules can be laid down in this regard as the determination of the question will depend upon the facts of each case." 4.5 From the principle enunciated by the Hon'ble apex court, it is seen that in case of wrong availment of credit, the demand for recovery thereof has to be made within a reasonable period. In the instant case for the set-off of duty taken during 1978 to 1980, the demands were issued in 1987 and 1988, which is after a period of more than seven years. Issue of demand after such a long period cannot held to be within a reasonable period. The Central Excise law has prescribed specified time limit for recovery of duty, short paid or not paid which is six months from the date of payment of duty in normal cases and five years from the date of payment of duty in the cases where suppression of fraud, collusion, etc., are involved. In their case there is no question of fraud or collusion or wilful misstatement of facts, etc., nor these have been alleged. Therefore, taking into account the time limitation as laid down by the Central Excise law for recovery of duty, the same time limit should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and of duty is made under specific provision in a specific Rule, there is no warrant to import limitation of Section 11A for raising the demand under the said Rule." Applying the ratio of this judgment it is his contention that the time limit prescribed under Section 11A would not apply in the case of demands raised under Notification No. 201/79-C.E. as amended. 5.4 The learned D.R. further relies on the judgment of the Hon'ble apex court in the case of Collector of Central Excise, Jaipur v. Raghuvar (India) Ltd. - 2000 (118) E.L.T. 311 (S.C.) wherein it was held that "any law or stipulation prescribed a period of limitation to do or not to do a thing after the expiry of period so stipulated has the consequence of creation and destruction of rights and, therefore, must be specifically enacted and prescribed therefor. It is not for courts to import any specific period of limitation by implication, where there is really none, though courts may always hold when any such exercise of power had the effect of disturbing the right of a citizen that it should be exercised within a reasonable period." 5.5 The learned DR would further argue that the cause for recovery of credit ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fected under Section 11A of the Central Excise Act, 1944 by way of recovery of short payment of duty as the said notification provided duty exemption to the extent of duty paid on the inputs. At the relevant time, the said Section 11A provided for issue of a show-cause notice for duty short levied or short paid or erroneously refunded within a period of six months from the date of payment/refund of duty in normal cases and within a period of five years in cases where suppression of fraud, collusion, etc., were involved. In the instant case, the set-off of duty paid was taken under Notification 178/77-C.E. from 1-8-1978 to 3-6-1979 whereas the demand for recovery thereof was initiated from November, 1987 to February, 1988 i.e. after lapse of more than eight years. It has to be, therefore, held that the demand for recovery of set-off of duty taken under Notification No. 178/77-C.E. is clearly time-barred and is, therefore, not sustainable. 6.2 As regards the set-off of duty availed under Notification No. 201/79-C.E., dated 4-6-1979, it is seen that there was a specific provision in paragraph 3 of the Appendix to the Notification which provided for recovery of credit wrongly ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsumer Health Care Ltd., this Tribunal's decision in the case of Hindustan Aluminium Corporation, Mirzapur and Indian Farmers Fertilizers Co-op. Ltd. and also the judgment of the apex court in the case of Raghuvar (India) Ltd. cited supra, applies squarely to the facts of the present case and respectfully following the same, we hold that the demand for recovery of the credit wrongly taken has been made correctly and in accordance with law. 6.3 The argument of the respondent that they have not been able to obtain reimbursement of duty paid from M/s. National Rayon Corporation and, therefore, they should not be penalized by recovery of credit does not have any legal basis and cannot be accepted. Why should the exchequer lose by allowing credit of duty which has not accrued to it ? The credit was allowed in terms of the provisions of Notification No. 201/79-C.E., dated 4-6-1979 subject to the terms and conditions laid down therein. Paragraph 3 Appendix to the said Notification provided for recovery of credit wrongly taken for any reason (emphasis supplied) from the manufacturer of the goods in cases where the duty paid on the inputs was varied subsequently resulting in payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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