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2017 (9) TMI 453

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..... ncentive scheme - Whether the Tribunal committed error while interpreting and construing the provisions of Section 11-D of C.E.A., 1944, while ignoring the interpretation and construction of provisions of Section 5-A of C.E.A., 1944, granting exemption from duty of excise to the Appellant / Assessee which is required to be construed liberally while upholding the impugned order passed by the respondent Authority? Held that: - It is not in dispute that when the Government of India, Ministry of Food and Civil Supplies, had issued the said incentive scheme on 4th November, 1987 for new sugar factories and expansion projects, Section 11-D of the Central Excise and Salt Act, 1944 was not introduced by the Central Government. The Constitutional validity of Section 11-D of the Central Excise and Salt Act, 1944 has been already upheld by the Supreme Court. It is held that the incentive scheme is nothing but the executive instructions of the Ministry of Food and Civil Supplies and thus it could not override the provisions of Section 11-D of the Central Excise and Salt Act, 1944, enacted by the Parliament - The learned Collector of Central Excise and Customs has rendered a finding that .....

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..... -D of the Central Excise and Salt Act, 1944, which was introduced later in point of time, the said provision will prevail over the provisions of the Essential Commodities Act, 1955, having similar non obstante provision in Section 6. Appeal dismissed - decided in favor of Revenue. - FIRST APPEAL NO. 646 of 2006 - - - Dated:- 8-9-2017 - R.D. DHANUKA SUNIL K KOTWAL, JJ. Shri R.M. Sharma, Advocate, for appellant. Shri D.S. Ladda, Standing Counsel, for respondent. JUDGMENT (Per R.D. Dhanuka, J.) 1] By this first appeal filed under section 35-G of the Central Excise Act, 1944 (for short, the said Act ), the appellant has impugned the order passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai in Appeal No. E-4606/94-SB-SRB dated 27th October 2005 dismissing the appeal filed by the appellant. 2] By an order dated 8th September, 2006, this Court formulated following substantial questions of law: (1) Whether the Tribunal committed error while interpreting and construing the provisions of Section 11-D of C.E.A., 1944, while ignoring the interpretation and construction of provisions of Section 5-A of C.E.A., 1944, gra .....

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..... ct of both new factories expansion projects: (i) For eligibility to incentives under the 1987 Scheme, the respective letter of intent as well as industrial licence should have been issued after 1-10-1980. Where letters of intent had been issued prior to 1-101980 but were converted into industrial licences after the said date, the eligibility to incentives will be governed only by the 1980 Scheme and not the 1987 Scheme. (ii) Limit for commencement of production : In order to become entitled to incentives or the full period as detailed in paragraph 4 of this Scheme, the date of commencement of production for the first time (in respect of new factories) and the date of commencement of production at the expanded capacity (in respect of expansion projects) shall be within a period of 39 months may be granted by the Government in exceptional circumstances based on the merits of individual cases. (iii) Sliding Scale of Incentives:- In the event delay in the ate said commencement production beyond the stipulated period of 39 months from the date of letter of intent or licence whichever is earlier, the grant o incentives would be regulated on a sliding scale in acc .....

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..... 100 100 100 2 100 100 100 3 100 100 100 4 100 100 100 5 100 100 100 6 ---- 100 100 7 ---- 100 100 8 ---- 100 100 9 ---- ---- 100 10 ---- ---- 100. 6] Under clause 8 of the said scheme, the new sugar factories and expansion projects which are eligible for incentive under the said scheme, are under obligation to furnish to the Directorate of Sugar, Krishi Bhavan, New Delhi, on completion of their projects all the relevant information and documents in such forms/annexures as may be prescribed by the Government, for verification of their .....

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..... t was also directed to state in their reply whether they wish to be heard in person before the cases were adjudicated upon. 10] In response to these show cause notices, the appellant filed separate reply to each of the show cause notices disputing the said demand and requesting the learned Assistant Collector to give personal hearing to the appellant. 11] The learned Collector, Central Excise and Customs, passed an order on 13th August, 1994 on the said six show cause notices issued against the appellant and confirmed the demand of ₹ 60,12,699/- in so far as the appellant is concerned. By the said order passed by the Collector of Central Excise and Customs, the demand was also confirmed in respect of seven other Assessees. 12] Being aggrieved by the said order dated 13th August, 1994 passed by the learned Collector of the Central Excise and Customs, the appellant herein filed an appeal under section 35-B of the said Act before the Customs, Excise, Gold (Control) Appellate Tribunal (West Region Bench) Bombay. 13] By an order dated 27th October, 2005, the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai (hereinafter referred to the sai .....

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..... CC 103 and in particular paragraph nos.8 and 9 and would submit that the exemption notification issued by the Central Government u/s 3 of the Essential Commodities Act, 1955, requires purposive interpretation and cannot be read in isolation. He submits that the benefits in respect of the payment of excise duty already granted under the said notification dated 4th November, 1987, by the Central Government u/s 3 of the Essential Commodities Act cannot be taken away by subsequent legislation u/s 11-D of the Central Excise and Salt Act, 1944. The benefits already given to the appellant had to be given due weightage by the learned Collector of Central Excise and Customs in the impugned order as well as by the said Tribunal. 18] It is submitted by the learned counsel for the appellant that the appellant had established its industry based on the said notification dated 4th November, 1987 and thus the respondent was estopped from taking away such benefit granted under the said notification. In support of this submission, the learned counsel for the appellant placed reliance on the judgment of Andhra Pradesh High Court in case of Cuddapah Cooperative Sugars Ltd. v. Union of India o .....

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..... inistry of Food and Civil Supplies, Department of Food, Directorate of Sugar, the Collector of Central Excise and Customs has rightly upheld the recovery mentioned in the show cause notices issued u/s 11-A. He submits that the learned Collector has also considered the effect of non obstante clause provided in Section 11-D of the Central Excise and Salt Act, 1944, as well as the non obstante clause provided in Section 6 of the Essential Commodities Act and has rejected the contention of the assessee rightly. 22] The learned counsel for the Revenue distinguished the judgment of the Supreme Court in case of Belapur Sugar and Allied Industries Ltd. (supra) on the ground that in that matter, the duty paid by the assessee was more and after such payment was made, the duty was reduced by the Central Government by issuing a notification. The Revenue had denied the benefit of such exemption and such notification to the assessee. After considering such situation in hand, the Supreme Court granted benefit of such notification to the assessee. He submits that the facts before the Supreme Court in the said judgment in case of Belapur Sugar and Allied Industries Ltd. (supra) are total .....

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..... ms had already granted opportunity to the appellant to produce the relevant documents in support of their case before the authority. The appellant thus cannot make any grievance before this Court that no such opportunity was given by the authority to produce the relevant documents. 27] It is not in dispute that when the Government of India, Ministry of Food and Civil Supplies, had issued the said incentive scheme on 4th November, 1987 for new sugar factories and expansion projects, Section 11-D of the Central Excise and Salt Act, 1944 was not introduced by the Central Government. The Constitutional validity of Section 11-D of the Central Excise and Salt Act, 1944 has been already upheld by the Supreme Court. 28] A perusal of the show cause notices issued by the Superintendent, Central Excise and Customs to the appellant clearly indicates that it was the case of the authority that the appellant had collected the excise duty at the rate of ₹ 85/- per quintal and had paid at the rate of ₹ 52/- per quintal to the Government and thus the differential amount of ₹ 33/- per quintal was liable to be deposited by the appellant with the authority. The said show cause n .....

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..... e duty, it represented the differential amount as rebate. The learned Collector of Central Excise and Customs made a finding that in the facts of all those cases, the recovery and retention of amounts representing duties of excise as provided by Section 11-D of the Central Excise and Salt Act, 1944, had been established beyond doubt. 32] In the said impugned order, the learned Collector of Central Excise and Customs also considered Clause 2A(vi) of the said incentive scheme, which provided that in regard to the excise duty concessions under the said scheme, necessary notification would be issued by the Ministry of Finance (Department of Revenue) separately. The learned Collector of Central Excise and Customs referred to the notification No.130/1983 dated 27th April, 1983, granting concessional rate of duty against basic duty and under notification No.131/1983 dated 27th April, 1983, to additional excise duty, which was equal to the levy sugar. It is held that both the notifications issued under Rule 8(1) of the Central Excise Rules, 1944, and amended from time to time, did not authorize any sugar manufacturer to collect more amount representing duty of excise as well as retentio .....

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..... ct, 1944, which has been enacted after the Essential Commodities Act, 1955, is later one and is more specific and thus will override the provisions of the Essential Commodities Act, 1955 and other provisions of law. In the said order, the learned Collector of Central Excise and Customs directed the appellants to pay a sum of ₹ 6012699/- in terms of provisions of Section 11-D(1) of the Central Excise and Salt Act, 1944 and did not impose any penalty on any of the assessees including the appellant. 36] A perusal of the appeal memo filed by the appellant before the Tribunal indicates that though the appellant had raised a ground that the appellant had not charged their customers for excess collection as duty, but had collected rebate as per incentive scheme, 1987, the appellant did not produce any record before the said Tribunal. The said Tribunal has also recorded a finding that the appellant had retained the differential amount collected by them in accordance with the sugar incentive scheme dated 4 th November, 1987 and has not deposited the entire amount with the Revenue. The said Tribunal has followed the principles laid down by the Supreme Court in the case of Kisan S .....

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..... ant that there was no opportunity to engage an Advocate was granted by the learned Collector of Central Excise and Customs is concerned, this submission of the learned counsel is ex-facie contrary to the averments made in paragraph no.8 of the appeal memo filed by the appellant before the said Tribunal, in which it has been admitted that the said Collector of Central Excise and Customs had heard the appellant through their Advocate in those six show cause notices. A perusal of the order passed by the learned Collector of Central Excise and Customs and more particularly paragraph no.4 of the said order also clearly records that a personal hearing was given to the appellant through its Advocate Shri K.P. Joshi. 41] Insofar as the submission of the learned counsel for the appellant that the rights vested in the appellant under the said incentive scheme cannot be taken away by Section 11-D after the appellant had acted upon the said incentive scheme detrimental to its interest and the said section was in breach of promissory estoppel is concerned, in our view, such issue could not have been raised before the Collector of Central Excise and Customs by the appellant. The appellant did .....

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