TMI Blog1997 (7) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... the said rule is inconsequential inasmuch as the same rule of limitation was very much on the statute book in the form of Section 11A and therefore, even before the amendment of Rule 57-I, the respondent State was prohibited from recovering any duty of excise which has not been levied or paid or has been short-levied, or short-paid after the period of six months from the relevant date and if the said non-payment or short-payment or non-levying or short-levying has occurred as a reason of any fraud, wilful misstatement, collusion or suppression of facts, or contravention of any of the provisions of the Act or the Rules made thereunder with intent to evade payment of duty by such person or his agent, then within five years from that relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and though the Rule as it stood then did not contemplate any notice or any period of limitation for the demand, the rule of limitation as found in Section 11A of the Act has still to be applied. As against this, a Division Bench of the Gujarat High Court in Torrent Laboratories Pvt. Ltd. v. U.O.I. [1991 (55) E.L.T. 25 (Guj.)] has taken a different view and opined that the rule of limitation was not applicable to the recoveries under the Modvat Scheme before the limitation clause was incorporated by amending Rule 57-I on 6th October, 1988. The learned Judges of the Division Bench of the Gujarat High Court observed that there is always a presumption that the Legislature never intends evasion of a provision of the statute. The Courts would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le considerations are out of place, and the strict grammatical meaning of the words is the only safe guide." Therefore, the argument that when the State has levied a tax there is a duty cast on the person concerned to pay the tax and it would be inequitable to defeat that right of the State to recover the tax or the duty, as the case may be, by applying certain provisions of limitation. But, if the statute provides limitation, then it will have to be observed strictly. Considerations of equity have no play in this arena which is strictly governed by the letter of the law. Section 11A of the Central Excise Act, 1944, lays down the procedure for recovery not levied or not paid, or short-levied, or short-paid or erroneously refunded by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules and therefore, if the entitlement of the refund or recovery is specified in the Rules without any mention of limitation, but the Act under which the Rules have been framed makes an unequivocal provision of limitation which may be applicable to those Rules, then the Rules will have to be read along with the provisions of the Act and not in isolation. Section 11A so far as is relevant for the purpose of this petition is reproduced below :- "Section 11A. - Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. - (1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, a Central Excise Officer may, within six months from the relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Rivonkar, wanted to contend that the clause of limitation as contained in Section 11A being applicable to Rule 57-I even before the amendment then there was no need for amending the said Rule on 6th October, 1988. We do not wish to go into the purposes which necessitated the amendment of Rule 57-I in the year 1988, but as we see it, the amendment is inconsequential since the clause of limitation was very much therein the Act and it was applicable even to the recoveries under the Modvat Scheme. Probably, the State amended the Rule in exercise of its rule-making power to avoid misconstruction of the Rules and any further litigation. Adding a clause of limitation in Rule 57 does not raise a presumption that before such an amendment, no limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he duty as was leviable but the Department had accepted it and now the Department wants to correct the error by recovering certain sums deducted wrongfully or credit to which the assessee was not entitled, the very nature of this recovery would require that a notice is to be served on the person from whom the recovery is to be made. This would be a part of the rule of natural justice. If this notice is a must then it will have to conform to the provisions of Section 11A which lays down that such a notice shall be issued within six months or five years, as the case may be, in the facts of the case. Rule 10 of the Central Excise Rules provided six months limitation for the recovery of duties not levied or not paid, or short-levied or not paid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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