TMI Blog2006 (3) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1962 and, therefore, Notification No. 48/97 issued by the Central Government empowering the excise authorities to invoke the recovery provisions contained in sub-clause (ii) of clause (c) of sub-section (1) of Section 142 of the Customs. Act, 1962 in respect of the duties imposed by Section 3 is ultra vires Section 12 of the Excise Act. It is further contended that at the material time there was no provision under the Excise Act to demand interest on the delayed payment of duty and, therefore, the impugned order in original dated 24-12-91 in so far as it purports to demand interest on delayed payment of duty is illegal and contrary to law. Alternatively, it is contended that assuming the revenue is entitled to recover interest pursuant to an order passed by the Delhi High Court then, such interest levied by the Court has to be recovered as a decree of a Civil Court and not by resorting to the recovery provisions contained in the Excise Act or the Customs Act applied to Excise Act. In other words, the submission is that, where any amount is due to the Government pursuant to an order of the Court and not under the Excise Act or Customs Act, then, that amount ordered by the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enues during the period stay operated against them. During the course of hearing of these petitions we were informed by the learned Additional General that a sum of Rs. 700/- crores has become due from the petitioners towards the additional duties of excise because of the stay. The amount is really staggering. Because of the view we have taken the petitioners were not entitled to withhold this amount after having collected duties of excise and then utilise the same for their own business purposes. We are told that the bank rate of interest is 17% per annum on commercial transactions as it was and we are of the opinion that not only that the respondents should be allowed to encash the bank guarantees forthwith, they should also be entitled to interest on these amounts at the rate of 17½% per annum from the date the duty became payable but was stayed under the orders of this Court. Though when the interim orders were made there was no direction of payment of interest but we find that under writ jurisdiction we have no such powers to bring the parties to the same level once the petitions are dismissed and interim orders vacated. Petitioners must restore the advantage they got to the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to the Central Excise matters by Notification No. 68/63-C.E. dated 4-5-1963 as amended by Notification No. 48/97-C.E. dated 2-9-97. 10. As the petitioner failed to pay the interest amount, on 9-3-01 the Excise Authorities attached the immovable properties belonging to the petitioner. Thereafter by a letter dated 31-7-01 the respondents quantified the interest payable at Rs. 25,85,109.18 ps. and called upon the petitioner to pay the same immediately. Thereupon, the petitioner filed the present petition to challenge the validity of the Notification No. 48/97-C.E. dated 2-9-97, as well as the action initiated by the respondents for recovering the interest. 11. To complete the narration of facts, it may be noted that on 2-9-03 [2005 (183) E.L.T. 419 (Bom)] this Court while admitting the petition directed that if the petitioner deposits in Court the entire amount of interest within 4 weeks, the attachment levied on the petitioner's property shall stand lifted and if the petitioner fails to deposit the amount as directed, then the petition shall stand automatically dismissed without reference to the Court. The petitioner challenged the said order by filing a Special Leave Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly enumerated in the section redundant or otiose. Such a construction which renders the express words used in the section nugatory/redundant or otiose must be avoided. 14. Mr. Sridharan further submitted that wherever the Parliament intended to apply all the provisions of the Act and specified some of the categories as and by way of illustration, then the legislature has used the word "including". In this connection, counsel for the petitioner referred to Section 3(3) of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and Section 3(3) of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978. In those enactments, it is provided that the provisions of Central Excises and Salt Act, 1944 and the Rules made thereunder, including those relating to refunds and exemption from duty shall, so far as may be, applied in relation to the levy and collection of the additional duties of excise. By using the word 'including' in those enactments, the legislature has made it amply clear that the categories enumerated therein are only by way of illustration. However, in Section, 12 of the Excise Act neither the ward ''collection/recovery" nor the word 'inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating authority was in error in holding that the interest was payable pursuant to the Delhi High Court decision dated 9-7-91, as the said decision was not rendered in the Writ Petition filed by the firm in which the petitioner was a partner. The Writ Petition filed by the firm was dismissed by the Delhi High Court on 22-1-92, wherein the court has referred to the order dated 9-7-91, but refrained from directing the firm to pay duty with interest. Therefore, in the absence of any specific order for payment of interest passed by the Delhi High Court in the Writ Petition filed by the firm, the Assistant Collector of Central Excise could not have demanded interest. 18. Alternatively, Mr. Sridharan submitted that, assuming the revenue was entitled to recover interest on delayed payment of duty based on the order passed by the Delhi High Court on 9-7-91, even then, to recover such interest the proper course was to adopt the recovery proceedings contained in the Code of Civil Procedure and it was not open to the respondents to initiate proceedings under the Act and the rules made thereunder. The submission is that the recovery procedure prescribed under the Act and the Rules made thereu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est nor the procedure adopted for recovery of such interest are authorised by law and, therefore, the demand as well as the action initiated by the revenue are liable to be quashed and set aside. 22. Mr. R.V. Desai, learned senior counsel appearing on behalf of the respondents on the other hand, submitted that Section 12 of the Excise Act empowers the Central Government to apply the recovery provisions contained in the Customs Act in respect of the duties imposed under Section 3 of the Excise Act. The written arguments submitted by Mr. Desai in this context reads as under : "Notification No. 48/97 dated 2-9-1997 issued by the Central Government in exercise of powers conferred by Section 12 of the Central Excise Act, 1944 which in turn includes Section 3 inter alia makes the provisions of Section 142 of the Customs Act, 1962 applicable whereby the Officers are empowered to collect/recover duty etc." 23. With reference to the demand for interest, Mr. Desai submitted that while disposing of a group of petitions on 9-7-91 the Delhi High Court had directed that the duty be recovered with interest. Though the said order was not passed in the petition filed by the firm, it is not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not invoke the recovery provisions of the Customs Act in respect of the duties imposed under Section 3 of the Excise Act. Section 12 of the Excise Act reads thus:— "12. Application of the provisions of Act 8 of 1978 to Central excise duties. - The Central Government may, by notification in the Official Gazette, declare that any of the provisions of the Customs Act, 1962 (52 of 1962) relating to levy of and exemption from customs duties, drawback of duty, warehousing, offences and penalties, confiscation, and procedure relating to offences and appeals shall, with such modifications and alterations as it may consider necessary or desirable to adapt them to the circumstances, be applicable in regard to like matters in respect of the duties imposed by Section 3." 28. Under Section 12, the Central Government is inter alia empowered to invoke the provisions of the Customs Act relating to levy and other provisions specifically set out therein, in respect of the duties of excise imposed under Section 3 of the Excise Act. Section 12 of the Excise Act does not specifically empower the Central Government to import the provisions of the Customs Act relating to recovery of duty, however, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince of Bombay (A.I.R. 1940 Bom. 65) while construing the Bombay (Amendment) Finance Act, 1939 held that the word "levy" in Section 24 of the staid Finance Act must be construed as meaning "take recovery steps to collect". 34. Chagla, C.J. while construing the provisions of the Sales Tax Law observed in the case of Dialdas Parmanand v. P.S. Talwalkar Ors. reported in AIR 957 Bombay 71 at para 15 as under :- "Therefore, "leyy" in our opinion in this context must mean any step taken or any proceeding initiated for the ultimate purpose of determining the liability of the assessee and finally collecting the tax. In every taxing statute the various processes are the imposition of the tax by the Legislature itself, the determination of the quantum of tax to which the subject is liable for which usual1y a machinery is set up, and finally a machinery for the summary recovery of the tax." 35. The Apex Court in the case of Town Municipal Committee, Amraoti Taluq v. Ramchandra Vasudeo Chimote Anr. reported in 53 I.T.R.444 (at page 453) has observed thus:- "..The last portion of Article 277 uses the words "continue to be levied" and "to be applied to the same purposes". By reason o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peration cannot be excluded in determining the scope of the charge." 38. From the above, it is clear that the ordinary and natural meaning of the word 'levy' is to collect. Even judicially the word 'levy' has been construed to mean determination of liability as well as collection of tax. Thus, the word levy is a wide and generic expression and unless the context otherwise requires the word 'levy' takes in all the three stages of charge, quantification and recovery of duty. The question, therefore, to be considered is, in the Context of Section 12, whether the word "levy' is to be given its ordinary and natural meaning or a restricted meaning as contended by the petitioner. 39. The Apex Court in the case of the New Central Jute Mills Co. Ltd. v. The Asstt. Collector of Central Excise [1978 (2) E.L.T. (J 393) (S.C.) = AIR 1971 S.C. 454)] ('N.C.J. Mills case 'for short) had an occasion to consider the scope of Section 12 of the Excise Act. The issue before the Apex Court was, whether the Central Government was empowered under Section 12 of the Excise Act to import the provisions relating to 'power to search premises' contained in Section 105 of the Customs Act, 1962. While uphol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and penalties, confiscation and the procedure relating to offences and appeals. Thus, various categories set out in Section 12 clearly show that the said section is enacted to facilitate implementation and enforcement of the duties imposed under Section 3. In other words, as per Section 12, the Central Government is empowered to import the provisions of the Customs Act relating to levy and other specific provisions which are all related to the enforcement of levy. Therefore, in the context of Section 12 and the categories specifically set out therein, it is evident that the word 'levy' has been used in Section 12 to mean charge as well as collection. If the word 'levy' in Section 12 is construed narrowly to mean 'charge' and not 'collection', in our opinion, it would run counter to the very purpose for which section 12 is enacted. 42. The fact that the charging Section 3 in the Excise Act differentiates between the word 'levy' and 'collection' would have no bearing for construing the word 'levy' in Section 12. Though there is a presumption that the legislature uses the same word in different parts of the same statute with the same meaning, the said presumption is a weak presumpt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collection and in cases of Nil assessment the question of paying duty does not arise and, therefore, in such cases Rule 10 would not apply. In that context, while rejecting the contention of the revenue that the expression 'levy' in Rule 10 means actual collection of some amount, the Apex Court held that under the Excise law the word ' levy.' has not been used as meaning actual collection. In other words, the Apex Court held that in the context of Rule 10 which deals with the power of the proper officer to issue show cause notice for recovery of the duty short levied, the word 'levy' would obviously relate to the imposition of duty and would not relate to collection of duty. Thus, the context in which the word 'levy' is used in Rule 10 is totally different from the context in which the word 'levy' is used in Section 12. As stated earlier, the word 'levy' in Section 12 of the Excise Act has been used in a comprehensive sense and not in a restricted sense. Therefore, the decision of the Apex Court in the case of N.B. Sanjana (supra) has no relevance in the facts of the present case. Similarly, the decision of the Apex Court in the case of National Tobacco Co. (supra) and Somaiya Org ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovered by initiating proceedings under Section 142 of the Customs Act. There is no merit in this contention. Once it is held that the assessment order was passed on 24-12-91 under the Excise Act demanding duty with interest is legal, then the duty so determined is liable to be recovered with interest by enforcing the machinery prescribed under the Act. In other words, even if at the relevant time there was no provision under the Excise Act for recovery of duty with interest, once the Court directs the revenue to recover duty with interest then the assessing officer is bound to pass an order accordingly and recover the same as Government dues recoverable under the Act. 46. Reliance placed on Rule 60 of the Bombay High Court Appellate Side Rules is wholly misplaced. The said Rule has no application to recovery of dues under the fiscal statutes and in any event the said Rule does not debar the revenue from recovering the amount by initiating recovery proceedings under the Act and the Rules made thereunder. Accordingly, we answer the fourth question in favour of the revenue. 47. For all the aforesaid reasons, the petition fails. Rule is discharged. However, in the facts of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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