TMI Blog1989 (4) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Appellants in Appeal No. 227 of 1989 had filed a petition in this Court in the year 1979 challenging the levy of excise duty on the cotton fabrics manufactured and processed by them. In that petition, an interlocutory order came to be passed whereunder pending the hearing and final disposal of the petition, among other things, the Superintendent, Central Excise, was permitted to assess the differential excise duty and additional duty in respect of the cotton fabrics manufactured by the petitioners and processed by them and to issue demand notice in respect of such differential duty on the processed fabric and the fabric in grey stage but to keep the recovery of the amount in abeyance till the final disposal of the petition, provided the petitioners furnished a bank guarantee. He has been directed by the High Court, after duly following the procedure under Rule 173-I of the Central Excise Rules, 1944, the Superintendent, Central Excise, determined the duty and passed assessment orders and also issued demand notices from time to time, pending the petition. These orders were never challenged and became final. The petitioners furnished bank guarantees. The petitioners thereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s became entitled to recover the amount due under the said notices and also to take necessary steps to seek enforcement of the Bank Guarantees. The amount due for the period from August, 1979 to December, 1983, was Rs. 2,73,71,000/- and for the period January, 1984 to November, 1984, was Rs. 1,12,85,404.74. In respect of the first amount, the petitioners had given bank-guarantee in favour of this Court and in respect of the latter amount the Bank Guarantee was given only to the extent of Rs. 94,62,000, but directly in favour of the Revenue. The Revenue encashed the latter Bank Guarantee pursuant to the order of the Court. Thus the entire duty for the first period and an amount of Rs. 18,25,000/- for the later period still remained to be paid. In respect of the first period the authorities have in addition issued also notices under Section 11A of the Central Excise Act; whereas in respect of the later period only the assessment orders and demand notices are issued and no notices under Section 11A have been issued. 7. It is on these facts that the petitioners have filed the present petition contending that unless procedure under Section 11A of the Central Excise Act is followed, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 73-I) have also to be executed ultimately under the provisions of Section 11 of the Act. Mr. Andhyarujina in support of his contention tried to rely upon certain decisions. The first decision relied on is of the Supreme Court reported in 1988 (38) E.L.T. 573 (S.C.) = A.I.R. 1989 S.C. 265 (Collector of Central Excise, Baroda v. M/s. Kosan Metal Products Ltd.). We find that there is nothing in that decision to support his contention. The facts narrated in the said decision show that a notice was issued to the assessee-Company requiring it to show cause as to why the excise duty should not be recovered from it under Rule 10 of the Central Excise Rules as it then existed and as to why the penalty should not be imposed on it under Rule 173-I. The notice was issued on the ground that the respondent Company cannot be eligible to set off the duty under a certain Notification under which the set off was claimed. In reply, the assessee-Company contended that the said notice under Rule 10 had not been issued to it within time and that there had been no fraud, collusion or wilful mis-statement, etc. on its part and that it had correctly availed of the set off duty. The main question, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is clear that once the assessment orders made under Rule 173-I had become final, there was no need to issue notices under Section 11A. If the authorities have, in spite of this, issued notices also under Section 11A for the recovery of the amount due under the said assessment orders, they have indulged in an exercise which is not warranted by law. However, merely because the authorities have under a mistaken view of the law or otherwise, issued notices under Section 11A, there is no reason why the Revenue should be prevented from collecting the amount due under the assessment orders which have already become final. Hence as far as the part of the order passed by the learned Single Judge which prevents the respondent Union of India from encashing the Bank Guarantees in respect of those amounts for which notices under Section 11A have been issued without adjudicating upon the said notices is concerned, the same, according to us, cannot be sustained and the injunction has to be vacated. There is no reason why the Revenue should be deprived of that amount even pending the unnecessary inquiry under Section 11A. In any case, this being an interlocutory stage, the Revenue can encash th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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