TMI Blog1994 (5) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed the Appeal and remanded the case to the Asstt. Collector for de novo adjudication. On remand a Show Cause Notice dt. 2.7.1983 proposing to reject the claims of the Appellants made in the price list, namely, (1) the cost of raw-material, (2) the cost of packaging goods, (3) the cost of conversion, and (4) the manufacturing profit. After usual proceedings the Asstt. Collector rejected the claims of the Appellants and approved the price list. Pursuant to the Order of the Asstt. Collector the Superintendent finalised the assessment and issued 54 demands demanding the duty mentioned therein for the period 21.12.1978 to 30.6.1983. However, the Appellants filed their Appeal against that Order of the Asstt. Collector before the Collector. The Collector (Appeals) again remanded the matter to the Asstt. Collector for re-adjudicating the matter in the light of the judgment of the Supreme Court delivered in the case of Bombay Tyre International. Thereafter the Asstt. Collector adjudicated the matter. While adjudicating, he allowed the claims of the Appellants for deductions in respect of (1) Additional Trade discount, (2) Regular payment performance discount, (3) Product discount, and ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals) under Section 35E of the Act against that part of the Order of the Asstt. Collector dt. 15.10.1984 whereby he has allowed the claims of the Appellants, as aforesaid, was barred by limitation, for, the Order of the Asstt. Collector dt. 15.10.1984 resulted in short levy of duty and, therefore, the Order proposing to review the Order of the Asstt. Collector under Section 35E should be passed within six months from the date mentioned under Section 11A of the Act, adding that Section 35E(3) of the Act fixes one year as an outer limit for the purpose of passing an Order. In a nutshell his submission before the Special Bench was that any Order proposing to review the Order resulting in short levy under Section 35E should be in conformity with Section 11A and since in the instant case the Order directing the Asstt. Collector to file an Appeal was passed by the Collector on 11.10.1985, it was barred by limitation and, therefore, is liable to be set aside. The case was also argued on merits. After hearing both sides both the Ld. Members on the Bench agreed that they are of the view that Section 11A cannot be read in Section 35E(3) and, therefore, they are of the view that the Appeal f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on applicable when there has been a short levy or where any duty has been erroneously refunded. It (Section 11 A) applies to all cases wherein Assessee has received duty etc. to which he was not entitled in law as held in the case of Zenith Tin Works (P) Ltd. v. Union of India and Ors. and Premier Tyres Ltd. v. Collector of Central Excise, Cochin , -a case dealing with the wrong availment of duty. Collector of Customs Central Excise v. Modern Induction Alloys Ltd., ; Collector of Customs Central Excise v. Jawandmal Dhannamal and Mahindra Mahindra Ltd. v. Collector of Central Excise . He also cited the case of Bawa Potteries, Mehrauli v. Union of India and Anr. 1981 ELT 114 (Del.) :[1992 (40) ECR 152 (Del.)] to show that erroneous refund under quasi-judicial Order would also fall under the ambit of Section 11 A. Vehemently, emphasising his submissions he further contended that it is settled law that if a statute contains two provisions they must be harmoniously construed, and if there is one which is a special provision dealing with a certain matter, that matter is excluded from the ambit of the general provision, (see Gadde Venkateswara Rao v. Govt. of Andhra Pradesh and Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also cited the case of Corn Products Company (I) Ltd. and Ors. v. Union of India and Ors. , Collector of Central Excise v. Fedders Lloyd Corporation Ltd., New Delhi 1986 (7) ECR 461; Motilal Company, Thane v. Collector of Central Excise, Bombay ; Military Dairy Farm, Kirkee v. Collector of Central Excise, Pune ; and Kirloskar Cummins Ltd. v. Collector of Central Excise to show that though the specific statutory provisions were different the general discussion in all these cases supports his contention. In reply, Shri A.K. Singhal, Ld. JDR submitted that since the assessments were provisional, the question of limitation would not arise. Alternatively, he submitted that Section 35E does not fall within the purview of Section 11A as proposal to examine the Order is on account of allowing certain deductions. An Order under Section 35E(2) could be passed where the Collector is satisfied that the Order passed by the subordinate executive authority is not legal or proper. Therefore, the provisions of Section 11A or the limitation mentioned therein cannot be planted in Section 35E when there is a specific provision of limitation in Sub-section (3) of the same Section (35E) otherwise Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a result thereof 54 demands demanding differential duty were issued to the Appellants. (iii) that meanwhile the Appellants challenged the said Order-in-Original dt. 24.8.1983 before the Collector of Central Excise (Appeals) who vide his Order-in-Appeal dt. 27.2.1984 remanded the case for de novo adjudication; (iv) that on remand the Asstt. Collector vide his Order-in-original dt. 15.10.1984 allowed the claim of the Appellants in respect of (i) additional trade discount; (ii) regular payment performance discount; (iii) product discount; (iv) octroi; and (v) transit insurance, but rejected the claim of the Appellants with respect to certain deductions as detailed in paragraph 2 above. (v) that against that part of the Order of the Asstt. Collector dt. 15.10.1984 whereby he rejected the claims of the Appellants, the Appellants filed their Appeal on 7.1.1985 and also started paying differential duty under protest in instalments; and (vi) that the Collector of Central Excise also directed the Asstt. Collector to file the Appeal against that part of the adjudication Order dt. 15.10.1984 of the Asstt. Collector whereby he allowed the claims of the Appellants as aforesaid u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 9-B. In the instant case the contention of the Ld. Counsel for the Appellants is that, since the Asstt. Collector has allowed the claim of the Appellants in respect of (i) additional trade discount; (ii) regular payment performance discount; (iii) product discount; (iv) octroi; and (v) transit insurance his Order dt. 15.10.1984 has resulted in a short levy of duty and, therefore, the Order authorising the Asstt. Collector to file the Appeal before the Collector (Appeals) under Section 35E(2) should have been passed within six months from the relevant date as mentioned in Section 11A of the Act. According to Ld. Counsel relevant date is the date when the Order was passed by the Asstt. Collector on 15.10.1984 or in the alternative 31.3.1985 when the entire differential duty was paid on instalments though, under protest, whereas the case of the Deptt. is that Section 11A did not come into play at all either at the time when the Appeal was filed before the Collector (Appeals) on 7.1.1985 by the Appellants or differential duty was paid by the Appellants in instalments (last instalment being paid on 31.3.1985 or when the Order-in-Appeal was passed by the Collector (Appeals) since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usted. The contention of the Appellants that they have paid the duty under protest as per the adjudication Order dt. 15.10.1984 and the Supdt. vide his letter dt. 11.7.1985 has certified that the revised amount has been paid, and therefore, it should be treated as the relevant date overlooks the fact that the duty was paid under protest and such payment of differential duty cannot by any stretch of imagination be termed as adjustment of duty after the final assessment thereof because the payment of duty under protest keeps the assessment alive and the protest continues till the dispute is finally settled, as stated above, and everything is in the fluid state. To be more explicit, it may be stated that Rule 233(B) provides for the payment of duty under protest even where the remedy of the Appeal or revision is not available to the Assessee [Sub-rule (5)]. It also provides that where the remedy of an Appeal or revision is available the Assessee may file an Appeal or revision and can also pay the duty under protest [Sub-ules (6) (7)]. In the instant case, as aforesaid, the Appellants after the passing of the adjudication Order dt. 15.10.1984 started paying the duty under protest, ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise as cited by JDR were rightly decided or not. Since all these cases relate to the alleged erroneous refund for which the relevant date under Section 11A of the Act is quite different whereas the present case is the case of finalisation of provisional assessment for which there is a different relevant date. And it seems to us that these cases are clearly distinguishable on facts as well as on the language used therein. As detailed out by both the Ld. Members of the referring Bench in their referring Order. For ready reference the same may be reproduced as under: 25. The question is whether the ratio laid down by the above Orders is correct and whether it can be extended to the facts of this case. In the present case, the Show Cause Notice was issued demanding duty by disallowing the deductions claimed in the price lists by the Appellants. The Show Cause Notice is dt. 2.7.1983. The said Show Cause Notice was adjudicated upon and the Asstt. Collector by his Order dt. 15.10.1984 accepted certain deductions and rejected certain deductions claimed by the Appellants. As against that part of the Order of the Asstt. Collector allowing deductions, the Appeal was filed beyond th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licable to Section 35E of the Act. 30. The original Show Cause Notice is a proposal to approve the price lists by disallowing deductions. On consideration of reply the Asstt. Collector while approving the price lists allowed certain deductions claimed by the Appellants which resulted in short levy of duty. In our view, the original Show Cause Notice itself is a proposal to disallow deductions and recover duty as a consequence. In other words, it is a proposal to recover duty short levied as a result of claiming deductions. The fact that the Asstt. Collector allowed deductions claimed as a consideration of the reply does not alter the nature of the Show Cause Notice issued originally. 31. We may also examine the issue from another point of view. As pointed out earlier, the Asstt. Collector merely approved the price lists by allowing certain deductions. The Order of the Asstt. Collector approving the price lists is subject to an Order that may be passed under Section 35E. In other words, it is not a final Order, since it is subject to an Order which, may be passed under Section 35E, the Order that may be passed under Section 35E is in the nature of an Appeal/revision. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duty. In other words, the machinery under-Section HA has already been set in motion and the Asstt. Collector rightly or wrongly approved the price lists by allowing certain deductions against which the Deptt. proposed to file an Appeal/revision and the only remedy available is through Section 35E. Therefore, the period of limitation provided under Section 35E(3) is the period of limitation for the purpose of filing the Appeal/revision and as stated earlier, the Appeal is in continuation of original proceedings, namely, the proceedings initiated by issue of Show Cause Notice under Section HA proposing to disallow the deductions. The period of limitation for the purpose of filing of Appeal against an Order is different from the period of limitation provided for the purpose of enforcement of original cause of action. Therefore, we are of the view that Section HA cannot be read in Section 35E(3). 34. We may point out another anomaly. If we read Section 11A in Section 35E(3), Section 11A provides 6 months period for the purpose of recovering the duty short-levied non-levied or duty erroneously refunded. Under the proviso to Section 11 A, the period of 6 months has been enlarged t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authorised Officer to make an application to the Appellate Tribunal or Collector (Appeals) for determination of such points as may arise out of such adjudication Order in the view of-such superior Authority. In short, powers under Section 35E are given to the two highest superior authorities of the Deptt. of Central Excise to have a watch over the adjudication Orders or the Orders-in-Original passed by an Officer of Central Excise. This appears to be necessary in the scheme of Central Excises Salt Act. Under the provisions of this Act, there is no provisions for an automatic or routine first Appeal by the Deptt. against the Orders of an Adjudicating Authority e.g. if an Adjudicating Authority is upto the level of the Addl. Collector only an Assessee has the right of Appeal to the Collector (Appeals) but the Deptt. does not have any right of a routine Appeal by the Deptt. to the Collector (Appeals). Similarly, against the Orders passed by the Collector as an Adjudicating Authority, there is no provision for an Appeal to the Appellate Tribunal. Yet there may be cases where the Adjudicating Authorities might have acted, in passing their Orders, with illegality or impropriety and per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of satisfying himself as to the correctness, legality or propriety of such decision or Order and may pass such Order thereon as he thinks fit. (3)(a) No decision or Order under this Section shall be varied so as to prejudicially affect any person unless such person is given a reasonable opportunity of making a representation and, if he so desires, of being heard in his defence. (b) Where the Board or, as the case may be the Collector of Central Excise is of opinion that any duty of excise has not been levied or has been short-levied or erroneously refunded, no other levying or enhancing the duty, or no Order requiring payment of the duty so refunded, shall be made under this Section unless the person affected by the proposed Order is given notice to Show Cause against it within the time limit specified in Section 11 A. (4) No proceedings shall be commenced under this Section in respect of any decision or Order [Whether such decision or Order has been passed before or after the commencement of the Customs, Central Excises and Salt and Central Boards of Revenue (Amendment) Act, 1978] after the expiration of a period of one year from the date of such decision or Order. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this deletion of reference to time limits specified in Section 11A in the new provisions of Section 35E, I am of the opinion that legislature has deliberately intended to do away with the time limits of Section 11A with reference to such revision of adjudication Orders. We must respect such clear legislative intent. 16. Before we part it may be stated for the record that in the case of Triveni Sheet Glass Works Ltd. v. Collector of Central Excise 1993 (67) ELT 210 (SC) supra, a Show Cause Notice dt. 6.5.1981 was issued by the Supdt. under Section 11A of the Act alleging that clearances upto 30.6.1980 had suffered short levy of excise duty to the Assessee therein. On receipt, the Assessee submitted an explanation and after considering it the Asstt. Collector dropped the proceedings by an Order dt. 17.6.1981. However, on 22.5.1982 the Collector of Central Excise issued Show Cause Notice to the Assessee therein under Section 35A of the Act proposing to revise and set aside the Order of the Asstt. Collector and proposing to confirm the demand of duty allegedly evaded by the Assessee, as detailed out in the notice of the Supdt. dt. 6.5.1981. Challenging this notice of the Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (President) Vice-President Sd/- Sd/- Sd/- K.S. Venkataramani (P.C. Jain) S.K. Bhatnagar Member (J) Member (T) (Vice-President) Date: 4.3.1994 S.K. Bhatnagar, J. 1. While I agree with the proposed conclusion to the effect that the limitation prescribed under Section 35E is independent of that provided in Section 11 A, I am unable to agree with some of the extracts mentioned in the proposed Order and would like to observe as follows: 2. In my opinion while dealing with a case under Section 35E, we are not concerned with the nature or type of proceedings which took place before or during adjudication at the original level. This is for the simple reason that Section 35E takes over front where the proceedings under Section HA or 33 end, and/is clearly concerned with an arena distinct from that of original proceedings. 3. The arena is distinguishable in as much as the level at which, the purpose for which, and the manner in which, the matter is required to be examined after the adjudication Order has been passed are different. Thus, for instance under Section 35E( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in cases where the remedy of an Appeal or revision is available to the Assessee against an Order or decision which necessitated him to deposit the duty under protest, he may file an Appeal or revision within the period specified for filing such Appeal or revision as the case may be, (clause 6). It also mentions, inter-alia, that on service of the decision on the representation referred to in Sub-Rule 5 or of the Appeal or revision referred in Sub-rule 5, the Assessee shall have no right to deposit the duty under protest... . In other words, the above Rules including Rule 233B do not in any way affect the time limit prescribed under Section 35E(3) the main issue before us. Even otherwise a provision under the Act must prevail over the Rules. 7. Looking at it in a slightly different way it is noteworthy that under the Central Excises Salt Act the Orders of the Adjudicating Authority are final subject only to the provisions for Appeal and revision. This finality can be touched only by way of an Order of the competent authority and not otherwise. And Section 35 and 35E provide the mechanism for approaching that authority and prescribes time limit for doing so and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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