TMI Blog1985 (3) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... claim for refund of duty paid on flush doors during the period 21-7-73 to 31-5-80, indicating that duty had been paid under protest and that the Delhi High Court had held that flush doors are not excisable-the reference being to the judgment dated 17-3-80 of a Division Bench of the Delhi High Court in Civil Writ No. 938/79 in the case of Wood Craft Products Ltd. v. The Superintendent (Technical), Customs and Central Excise and Ors., Dubringarj - 1980 E.L.T. 684 (Del.). It was also indicated that as the duty under Item 16B of the Central Excise Tariff had been paid under protest, the claim did not attract any limitation under the Central Excises and Salt Act, 1944. A second claim on substantially the same grounds was filed on 23-6-81 for refund of duty paid from 1-6-80 to 31-5-81. Adverting to these two claims the Assistant Collector of Central Excise issued notice to the appellant as to why the claim should not be rejected, as he felt that as per Notification No. 41/73 , dated 1-3-73 read with Collector's Trade Notice No. 157/73, dated 30-7-73 flush doors are liable to duty under Item 16B; classification of flush doors in another case under Item 16B had been upheld both by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat flush doors are assessable under Item 68. The appellant had themselves filed a refund claim in respect of the duty paid on flush doors under Item 16B, after deducting the amount of duty leviable under Item 68 and that lower amount had been sanctioned. A further claim towards the amount adjusted by the appellant towards duty under Item 68 is not refundable as the party themselves have deducted the duty paid under Item 68 and claimed the rest of the amount on their own accord. The deduction by the party is a correct one. Accordingly he rejected the claim of the appellant. An appeal was filed against this order with the Appellate Collector of Central Excise, Madras. Noting that the amount sanctioned to the appellant was the one which they themselves indicated, after adjusting the amount payable towards duty under Item 68 of the Tariff with effect from 1-3-75 the Appellate Collector observed that in this way the appellant paid the duty on flush doors under Item 68 of the Tariff themselves. By this payment a legal obligation had been discharged by the appellant and hence the question of refund of the amount does not arise. That there was no confirmed demand in respect of the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Department was not for the full amount the matter was pursued by submitting a further claim for the balance amount. He urged that in law, as well as on the facts of the case, no adjustment of the duty will be allowable in terms of an assessment under Item 68, even if such an assessment is warranted but not made. 7. He referred to the decision of the Andhra Pradesh High Court in the case of Kesoram Cements, Besantnagar v. Union of India and Ors.- 1982 E.L.T. 214 (A.P.). This judgment sets out what exactly is a 'legal levy' that is enforceable in law. Next he referred to the decision of the Delhi High Court in the case of Bharat Commerce of Industries Ltd. v. Union of India and Ors.-1979 E.L.T. (J 527). In this case the assessee had paid certain duty on mixed yarn under Item 18B of the Central Excise Tariff. However, differential duty was demanded by the Department on the ground that the duty was correctly payable under Item 18. Ultimately the Court decided that the correct assessment was under Item 18, though under a different serial number. When refund claims were filed, the Department rejected the claim observing that the yarn was assessed at a rate of duty lower tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been held by the Supreme Court to be not legally collectable. The act of the Department in more or less deducting the amount from out of the original claim as that due to a liability under a different item of the Tariff is not justifiable. 8. Next he referred to the decision of the Bombay High Court in the case of Ceat Tyres of India Ltd. v. Union of India and Ors.-1980 E.L.T. 563 (Bom.). In para 15 of this Judgment His Lordship has observed that, It is the petitioner which made the mistake of paying it and which the department received from the petitioner without the authority of law. Therein lies the difference. If it is manifest, as in the present case it is, that the mistake was on the part of the petitioner in filing erroneous classification lists and paying additional duty on the basis thereof, the question, of the concerned authority receiving the amounts on the footing of the petitioner's mistake cannot elevate the receipt of such amounts to the dignity of a judicial or quasi-judicial order under which such amounts, were paid. There was no question of any erroneous finding by the department, in the sense that the department has not on its own levied any duty on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the procedure for assessment as set out in Chapter VII-A of the Central Excise Rules, 1944 and indicated that an assessment in terms of Rule 173-I has been made in the R.T. 12 returns under Item 16B. None under Item 68 had been made. Accordingly he pressed for setting aside the order of the Assistant Collector. 11. The learned Senior Departmental Representative observed that duty has been paid under protest only in respect of Item 16B. In terms of Rule 173F the assessee has to determine his liability for the duty due; under Rule 173G(3) he has to submit the relevant R.T. 12 return and under Rule 173-I assessment is made by the proper officer. No statutory time limit has been laid down for completion of the assessment return-R.T. 12. (At this stage the advocate for the appellant indicated that all the R.T. 12s have been completed and returned in due course and hence they are not pending). 12. Continuing the learned S.D.R. observed that the plea of the advocate that there was no order of assessment is incorrect. The communication of the Asstt. Collector dated 12-8-81 which is marked as the order states among other things. I agree that flush door which is a board with i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 15. Referring to the decision in the case of Rohtas Industries Limited v. Superintendent of Central Excise and Ors. AIR 1973 Patna 446) he stated that though Section 11 of the Act has not been indicated in the order of the Assistant Collector, this should not vitiate the order dated 17-5-82 of the Assistant Collector, as the power to retain the amount due to Government is provided for in law. Non-mention of the correct law does not make the decision invalid, if it is supportable in law. 16. By way of rejoinder the advocate for the appellant referred to Section 3 of the Act which provide that duty shall be levied and collected... on all excisable goods..., set forth in the First Schedule and in terms of this Section an amendment was made under Entry 16B; there was no reference to entry 68 at all. The Courts having held that the goods were not liable under Entry 16B the amount paid by the appellant in terms of Entry 16B has to be refunded in full. The process of assessment has been completed by the department when they finalised the R.T. 12s under Item 16B. Reopening of such an assessment is not available to the Department except in accordance with the law and the law prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approved list. Rule 173C provides for the filing of a price list for goods assessable on ad valorem basis. Here too, there is a provision for declaration and approval by the proper officer, and a duty cast on the assessee to follow the approved list at the time of removal of goods. Rules 173F provides that the assessee shall himself determine his liability for the duty due after he has complied with, among others, the provisions of Rules 173B and 173C, that is having obtained an approved Classification List and an approved Price List. Rule 173G(1) provides that the assessee shall pay the duty determined by him for each consignment by debit to (an) account current maintain-ed by him before removal of the goods . Rules 173G(3) provides that at the close of each month the assessee shall file with the proper officer a monthly return in the proper form (R.T. 12) indicating the quantity of excisable goods removed on payment of duty, duty paid on such quantity alongwith particulars of the clearance documents etc. Rule 173-I provides that on the basis of the information contained in the return filed by the assessee under Rule 173G(3), and after such further inquiry as the proper officer m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of excisable goods belonging to such person; and if the amount payable is not so recovered he may prepare a certificate signed by him specifying the amount due from person liable to pay the same and send it to the Collector of the district in which such person resides or conducts his business and the said Collector, on receipt of such certificate, shall proceed to recover from the said person the amount specified therein as were an arrear of land revenue. Section 11A thus provides for a situation where there has been either a short levy, or even a short payment either prior to the levy or after the levy in terms of the Rules relating to Self Removal Procedure, whereas Section 11 makes a general provision for deduction of a sum payable to the Central Government under the provisions of the Act in a particular manner. (Prior to 12-11-1980, Rule 10 of the Central Excise Rules was operative in respect of short levies or short payments and was worded more or less the same form as Section 11A). 20. In the present case classification list had been approved for payment of duty by the assessee under Item 16B of the Central Excise Tariff (as valuation is not in dispute, we are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he question raised by way of a reference before Their Lordships of the Bombay High Court was whether the Tribunal or an Income-tax authority in the jurisdiction of the Bombay High Court was bound by the decision of the Madras High Court. Their Lordships clarified that when the Section was struck down, though it was done by another High Court, that decision should be followed by the Tribunal and assessing authorities all over the country. On analogy when the accessibility of flush doors was itself negatived by the Delhi High Court it would not be open to the Asstt. Collector to brush it aside by merely stating that it is irrelevant. Another interesting factor is that the notice of Sept. 1980 have been issued after Item 68 has been made part of the First Schedule to the Act subjecting goods not otherwise specified to a general rate of duty. Even on receipt of the reply from the appellant, the Assistant Collector did not pass a formal order one way or the other. He merely observed that he agreed that flush door is liable to be assessed under item 68 thus indirectly accepting the plea of the party that flush doors are not liable to duty under Item 16B. He also asked the party to file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assification List except one under Item 16B Central Excise Tariff which was determined by the Delhi High Court and then by the Supreme Court to be illegal. Hence there has been no legal levy under Item 68 of Central Excise Tariff in respect of the goods during the period in question. In fact the appellants claim for refund started with 21-7-73 when Item 68 was not even part of the Central Excise Tariff and the Classification List, then filed and approved could not by any stretch of imagination apply to Item 68 even by implication or by way of wrong indication. Therefore, it has to be held that there has been no legal levy under Item 68, as provided by the Act and the rules in so far as the goods vis-a-vis Item 68 are concerned. 22. Next we turn to the question whether Section 11 could be an authority for retaining a sum equal to that leviable under Item 68 of Central Excise Tariff after 1-3-75. This has been answered by the Delhi High Court in the case of Bharat Commerce of Industries v. Union of India (1979 E.L.T. J 527). When the Department rejected a claim for refund of duty collected under one item on the score that a higher amount was collectible under another Item, that co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was approved, we consider that clearance of goods without payment of duty in terms of Item 68 Central Excise Tariff was not proper and in terms of Rule 173G(3) at the time of finalising of the RT 12 returns all that the proper officer is to do is to indicate the short payment which shall thereafter be paid. Though this indication has not been given earlier, such a course is available at the present point of time. Hence, a sum representing duty in terms of Item 68 would be a sum due to Government with effect from 16-4-80, as envisaged in Section 11 of the Act. These could, therefore, be legally collected from out of any amount held by the Department on account of the assessee. To this extent an amount equal to the duty payable on flush doors on or after 16-4-81 could be legally deducted in terms of Section 11 of the Act. It is accepted law that when the power to do something is available in law, failure to indicate the exact authority at the time of exercise of the power will not vitiate the exercise of the power itself. Accordingly, we hold that it is proper for the Department to have deducted an amount equal to the duty leviable on flush doors under Item 68 of the Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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