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TMI Blog2003 (1) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Act, 1994 which came into force w.e.f. 17-11-1980 by the Finance Act, 2000 (10 of 2000). The relevant part of unamended Section 11A was as under : - "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 relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made requiring him to show cause why he should not pay the amount specified in the notice. Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud; collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, as if, for the words "six months", the word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in the notice : Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, as if, for the words one year, the words "five years" were substituted." 5.For our purpose, relevant part of the amended Section 11A would be "when any duty of excise has been short levied or short paid, whether or not such short levy or short payment was on the basis of any approval acceptance or assessment relating to the rate of duty on valuation of excisable goods under any other provision of the Act or the Rules, a Central Excise Officer may within one year from the relevant date, serve notice on the person chargeable with the duty which has been short levied or short paid requiring him to show cause why he should not pay the amount specified in the notice." In the first proviso to the said Section, there is no change. At this stage, we woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods under the Central Excise Act, shall be deemed to be and shall be deemed to always have been, as validly levied, assessed or collected as if sub-section (1) had been in force at all material times; (b) no suit or other proceedings shall be maintained or continued in any Court, Tribunal or other authority for the refund of, and no enforcement shall be made by any court of any decree or order directing the refund of any such duties of excise which have been collected and which would have been validly collected if sub-section (1) had been in force at all material times; (c) recovery shall be made of all such duties of excise which have not been collected or, as the case may be, which have been refunded but which would have been collected or, as the case may be, would not have been refunded, if sub-section (1) had been in force at all material times. Explanation. - For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if this section had not come into force." 7.The aforesaid am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also of Section 11A, the show cause notice "which could be issued within the time-limit prescribed under the relevant provision could only be in relation to the duty of excise for a period prior to the issuance of show cause notice. There could be no reason for the issuance of a show cause notice for the period subsequent to the notice as in that case the necessary corrective action could always be taken. But Rule 10 with which we are concerned as well as Section 11A to which a reference is made in the case of Rainbow Industries, the show cause notice which must be issued within the time-frame prescribed in the said provisions must relate to a period prior thereto as the purpose of the show cause notice is recovery of duties or charges short-levied etc. We, therefore, find it difficult to accept the contention that the ratio of the decision in Rainbow Industries is that under Section 11A past dues cannot be demanded. We, must, therefore, reject that contention." 9.Thereafter, the Court held that the decision rendered in Ballarpur Industries (supra) does not lay down the law correctly and the decision rendered in Rainbow Industries (supra) on the other hand correctly lays down the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order it cannot be held that there was short levy of excise duty. In such cases levying of excise duty on the basis of approved classification or final assessment order is the correct levy and therefore the amended Section 11A would not be applicable. 11.In our view, there is no substance in this submission. As stated earlier, the relevant amended portion of Section 11A inter alia makes it abundantly clear that when any duty of excise has been short levied or short paid, whether or not such short levy or short payment was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of the Act or the rules, the Central Excise Officer, can within one year from the relevant date, serve notice on the person chargeable with the duty, which has been short levied or short paid, requiring him to show cause why he should not pay the amount specified in the notice. 12.This amendment changes the entire basis or foundation of the judgment rendered in Cotspun's case (supra). The entire discussion in the said case is based upon Rule 173B which dealt with classification list and that assessee must determine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settled law that the legislature can always render a judicial decision ineffective by enacting a valid law on the topic within its legislative field by fundamentally altering or changing its character retrospectively. {[Re : Indian Aluminium Co. v. State of Kerala [(1996) 7 SCC 637]}. 14.Further, learned Attorney General rightly referred to the Statement of Objects and Reasons in support of the contention that the law is altered so as to change the entire basis of the judgment rendered in Cotspun's case (supra). From the Statement of Objects and Reasons, it is abundantly clear that the main purpose of the amendment was to fillin the lacuna pointed out by this Court by interpreting Rule 10 as it existed. As quoted above, the objects and reasons clearly provide that it was to validate certain actions taken under Section 11A of the Central Excise Act with retrospective effect from 17th November, 1980, by providing that notwithstanding any approval, acceptance or assessment of duty under the provisions of Central Excise Rules, such show cause notice could be issued. It specifically states that the amendment was necessary to overcome certain judicial pronouncements. Further, validating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the result, whether injurious or otherwise, by giving effect to the language used nor it is the function of the Court where the meaning is clear not to give effect to it merely because it would lead to some hardship. It is the duty imposed on the Courts in interpreting a particular provision of law to ascertain the meaning and intendment of the Legislature and in doing so, it should presume that the provision was designed to effectuate a particular object or to meet a particular requirement. {Re : Firm Amar Nath Basheshar Dass v. Tek Chand [(1972) 1 SCC 893]}. 17.This power under Section 11A could be exercised within a period of one year from the relevant date. Therefore, this power to correct the errors or mistakes in approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods cannot be said to be unreasonable. In case where first proviso is applicable, by invoking larger period of five years such show cause notice could be issued. The relevant date is defined under sub-section (3) of Section 11A, which is as under - "11A. (3) For the purpose of this section, - (i) "refund" includes rebate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , provided the infirmities and vitiating infactors noticed in the declaratory judgment are removed or cured. Such a validating law can also be made retrospective. If in the light of such validating and curative exercise made by the legislature - granting legislative competence - the earlier judgment becomes irrelevant and unenforceable, that cannot be called an impermissible legislative overruling of the judicial decision. All that the legislature does is to usher in a valid law with retrospective effect in the light of which earlier judgment becomes irrelevant. Such legislative expedience of validation of laws is of particular significance and utility and is quite often applied, in taxing statutes. It is necessary that the legislature should be able to cure defects in statutes. No individual can acquire a vested right from a defect in a statute and seek a windfall from the legislature's mistakes. Validity of legislations retroactively curing defects in taxing statutes is well recognised and courts, except under extraordinary circumstances, would be reluctant to override the legislative judgment as to the need for and wisdom of the retrospective legislation. In Empire Ind. Ltd., t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Registration No. T/SI/235/75, dated 23-5-1973. The Company set up another factory at Coimbatore holding Central Excise licence L.4 No. 1/T.I.68/82, as a branch of the main undertaking at Trivandrum. 23.For the years 1986-87, the Company filed a classification list - S. No. A/51/86-87, dated 26-5-86 in respect of excisable goods produced by them and claimed exemption applicable to small scale manufacturers in terms of Notification No. 175/86, dated 1-3-1986 (as amended). The said classification list was verified by the Central Excise authorities and duly approved by the Asstt. Collector of Central Excise, Coimbatore-I Division. 24.During the years 1986-87 and 1987-88, the Company cleared their goods availing the exemption in terms of Notification No. 175/86, dated 1-3-1986 (as amended) and submitted their monthly RT 12 returns which were duly assessed by the Range Superintendent, Coimbatore-I Division and returned to the Company. 25.In October, 1986 and October, 1987, the factory at Coimbatore was visited by the Central Excise Revenue Audit authorities. On 5-2-1988, the factory was visited by Central Excise Internal Audit Authorities, Coimbatore. 26.Thereafter, on 7-12-1989, a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contravention of any provision is not sufficient to attract the extended period of limitation. 30.The present case is not a case where the Company was not entitled to have registration as SSI unit at Coimbatore. It was a mistake of the concerned clerk on the assumption that as the Company was registered as SSI unit at Trivandrum the Company was not required to obtain such certificate at Coimbatore. From such mistake it would be difficult to arrive at a conclusion that it was wilful mis-statement or suppression of fact for getting the benefit of exemption notification. Classification list was also approved on the said assumption without noticing that separate SSI certificate for factory at Coimbatore was required to be obtained. 31.In this view of the matter, in our view, the finding recorded by the Tribunal that there was wilful suppression on the part of the Company in availing the benefit of notification and therefore extended period of limitation could be invoked, requires to be set aside and is hereby set aside. The appeal is allowed to the aforesaid extent. C.A. Nos. 3688, 4263, 4767 and 4832-34 of 2000 32.In these appeals, the Tribunal arrived at the conclusion that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The Tribunal held that normal period of limitation of six months would be available. The Tribunal however held that in view of the decision in Cotspun's case, the demand was not enforceable and the appeals were allowed. 40.In view of the amended statutory provisions and for the reasons recorded above, the demands which are within period of limitation could be enforced. In the result, the appeals are partly allowed accordingly. C.A. Nos. 302-303 of 2002 41.In these appeals, Final Order No. 83/2000-A, dated 18-2-2000 and Misc. Order No. 147/2000-A, dated 22-12-2000 are challenged. 42.By order dated 18-2-2000, the Tribunal held that the clearances of the goods were effected pursuant to the approved classification list and price list and that being the position, the entire exercise undertaken by the department in pursuance of the show cause notice dated 31-3-1986 was illegal. The Tribunal, therefore, set aside the order passed by the adjudicating authority and the department was directed to refund the amount expeditiously. That order was challenged by filing applications to rectify the mistakes on the ground of subsequent amendment of the statute. The Tribunal dismissed those a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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