TMI Blog1994 (6) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... t on that basis. The Superintendent approved the prices provisionally by his letter dated 20-11-1978. However, this provisional assessment was finalised by the Assistant Collector on the basis of wholesale prices on 18-9-1979. Against that order of the Assistant Collector the appellants filed the appeal. The Collector (Appeals) allowed the appeal and remanded the case to the Assistant Collector for de novo adjudication. On remand a Show Cause Notice dated 2-7-1983 proposing to reject the claims of the appellants made in the price list, namely, (1) the cost of raw-material; (2) the cost of packaging goods; (3) the cost of conversion; and (4) the manufacturing profit. After usual proceedings the Assistant Collector rejected the claims of the appellants and approved the price list. Pursuant to the Order of the Assistant Collector the Superintendent finalised the assessment and issued 54 demands demanding the duty mentioned therein for the period 21-12-1978 to 30-6-1983. However, the appellants filed their appeal against that order of the Assistant Collector before the Collector. The Collector (Appeals) again remanded the matter to the Assistant Collector for re-adjudicating the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial discount. Against that part of this order of the Collector (Appeals) the appellants have filed the appeal before this Tribunal. 5.During the hearing of these appeals by the Regular Special Bench `A' the main thrust of the arguments by the Ld. counsel for the appellants was that the appeal filed in pursuance of the directions of the Collector (Appeals) under Section 35E of the Act against that part of the order of the Assistant Collector dated 15-10-1984 whereby he has allowed the claims of the appellants, as aforesaid, was barred by limitation, for, the order of the Assistant Collector dated 15-10-1984 resulted in short levy of duty and, therefore, the order proposing to review the order of the Assistant Collector under Section 35E should be passed within six months from the date mentioned under Section 11A of the Act, adding that Section 35E(3) of the Act fixes one year as an outer limit for the purpose of passing an order. In a nutshell his submission before the Special Bench was that any order proposing to review the order resulting in short levy under Section 35E should be in conformity with Section 11A and since in the instant case the order directing the Assistant Col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11A comes into play as Section 35E(3) is to be read along with Section 11A otherwise Section 11A would become redundant. And further that since the question of short levy arises out of the order of the Assistant Collector dated 15-10-1984, the appeal should have been filed within six months from the date of the order of the Assistant Collector. Continuing further he submitted that Section 11A of the Act is the specific and the only provision applicable when there has been a short levy or where any duty has been erroneously refunded. It (Section 11A) applies to all cases wherein assessee has received duty etc. to which he was not entitled in law as held in the case of Zenith Tin Works (P) Ltd. v. Union of India and Others, 1986 (23) ELT 357 (Bom.) and Premier Tyres Limited v. Collector of Central Excise, Cochin, 1986 (26) ELT 42 - a case dealing with the wrong availment of duty. Collector of Customs Central Excise v. Modern Induction Alloys Limited, 1990 (49) ELT 495; Collector of Customs Central Excise v. Jawandmal Dhannamal, 1990 (49) ELT 541 and Mahindra Mahindra Ltd. v. Collector of Central Excise, 1989 (44) ELT 669. He also cited the case of Bawa Potteries, Mehrauli v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Central Excise v. Universal Radiators Limited, supra, Shree Digvijay Cement Company Limited v. Collector of Central Excise, supra, and the Collector of Customs v. Ferro Alloys Corporation Limited, 1992 (52) ELT 633 were correctly decided and the contra views expressed by the Tribunal in the case of Collector of Central Excise, Bangalore v. Raman Boards Limited, 1985 (22) ELT 892 and Andhra Sugars Limited v. Collector of Central Excise, 1991 (55) ELT 262 were wrongly decided as these cases ignore the basic issues, namely, that Section 35E(2) is a general provision whereas Section 11A is a specific and reliance placed upon Section 35A(3) was misconceived. He also cited the case of Corn Products Company (I) Limited and Others v. Union of India and Others, 1984 (16) ELT 177 (Bom.); Collector of Central Excise v. Fedders Llyod Corporation Ltd., New Delhi, 1994 (70) E.L.T. 352 (Tri.) = 1986 (7) ECR 461; Motilal Company, Thane v. Collector of Central Excise, Bombay, 1984 (15) ELT 157; Military Dairy Farm, Kirkee v. Collector of Central Excise, Pune, 1985 (19) ELT 148; and Kirloskar Cummins Limited v. Collector of Central Excise, 1988 (37) ELT 219 to show that though the specific st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oremost question before us is, as to whether the present case is a case of short levy of excise duty, since it was contended by the learned counsel for the appellants that the question of short levy arises out of the order of the Assistant Collector dated 15-10-1984. To decide this question, it would be advantageous to state the admitted facts on the record, which are as follows :- that the appellants submitted their price lists which were(i) assessed provisionally and the appellants started clearance of goods covered by the provisional approval against B-13 bonds duly backed by bank guarantee; that after the several rounds of litigation the said(ii) provisional list was finalised by the Assistant Collector of Central Excise vide his Order-in-Original No. V(Misc.)14/Cell/80/8522 dated 24-8-1983 and as a result thereof 54 demands demanding differential duty were issued to the appellants. that meanwhile the appellants challenged the said(iii) order-in-original dated 24-8-1983 before the Collector of Central Excise (Appeals) who vide his order-in-appeal dated 27-2-1984 remanded the case for de novo adjudication; that on remand the Assistant Collector vide his(iv) order-in-orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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." For the purpose of this Section "relevant date" means - in a case where duty of excise is provisionally assessed under this Act or the Rules made thereunder, the date of adjustment of duty after the final assessment thereof as per sub-section (3)(ii)(b). 12.In other words the `relevant date' from which the period of limitation is to be computed in the case of excisable goods on which the value or the rate of duty has been provisionally determined under the Rules, is to be the date on which the duty is to be adjusted after final determination of the value for the purpose of Section 11A or Rule 9B. In the instant case the contention of the Ld. counsel for the appellants is that, since the Assistant Collector has allowed the claim of the appellants in respect of (i) additional trade discount; (ii) regular payment performance discount; (iii) product discount; (iv) octroi; and (v) transit insurance his order dated 15-10-1984 has resulted in a short levy of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8) E.L.T. 622 it was held by this Tribunal that when duty is paid under protest the assessment remains alive. In the case of Metroark Private Ltd. v. CCE, 1990 (50) E.L.T. 133, it was held by the Tribunal that where the duty is paid under protest, the protest continues till dispute is finally settled. in these circumstances, payment of the duty under protest cannot be taken as the relevant date because the relevant date in the case of provisional assessment is the date of the adjustment of duty after the final assessment thereof. In the instant case, though the provisional assessment has been finalised by the Assistant Collector vide his adjudication order dated 15-10-1984, it was challenged before the Collector (Appeals), and is still before this Tribunal and the duty has not been adjusted. The contention of the appellants that they have paid the duty under protest as per the adjudication order dated 15-10-1984 and the Supdt. vide his letter dated 11-7-1985 has certified that the revised amount has been paid, and therefore, it should be treated as the relevant date overlooks the fact that the duty was paid under protest and such payment of differential duty cannot by any stretch o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in the emphatic `No' only on the sole ground and any other discussion would be of an academic nature because from the question referred to the Larger Bench, it is clear that, this Bench has to confine itself only to the facts and circumstances of the present case while dealing with the question of Section 11A prescribing the limitation for raising the demand. 15.In view of this it is not necessary here to consider whether the cases Re-Rolling Mills v. CCE, 1989 (43) E.L.T. 115; CCE v. Universal Radiators Ltd., 1988 (37) E.L.T. 222, and Shree Digvijay Cement Co. Ltd. v. CCE, 1991 (52) E.L.T. 631 as cited by the Ld. Counsel for the appellants or the case of CCE, Bangalore v. Raman Boards Limited, 1985 (22) E.L.T. 892 and Andhra Sugars Ltd. v. CCE, 1991 (55) E.L.T. 262 as cited by JDR were rightly decided or not. Since all these cases relate to the alleged erroneous refund for which the relevant date under Section 11A of the Act is quite different whereas the present case is the case of finalisation of provisional assessment for which there is a different relevant date. And it seems to us that these cases are clearly distinguishable on facts as well as on the language used there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice29. list is appealable. The Department can either file an appeal against the order of the Assistant Collector or initiate Review proceedings under Section 35E(3). Since the Assistant has not filed the appeal under Section 35A the only remedy open is to invoke the provision under Section 35E(2). That is exactly what has been done in this case. In other words, the Order of the Assistant Collector approving the price lists by allowing certain deductions was challenged by the Department by way of appeal under Section 35E of the Act. Two questions arise under the above circumstances :- (1) Whether the order of the Assistant Collector has resulted in short-levy of duty in respect of the price lists approved by allowing certain deductions; (2) If so, whether the period of limitation is in accordance with Section 11A and applicable to Section 35E of the Act. The original Show Cause Notice is a proposal to approve the30. price lists by disallowing deductions. On consideration of reply, the Assistant Collector while approving the price lists allowed certain deductions claimed by the appellants which resulted in short levy of duty. In our view, the original show cause notice itself is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f allowing deductions erroneously while approving the price list. On the facts of this case, the Show Cause Notice was already issued under Section 11A which is a composite show cause notice proposing to approve the price list after rejecting the deductions. In other words, proceedings to recover duty short-levied as a consequence of disallowing deduction has already been commenced. The filing of appeal/revision under Section 35E in continuation of the original proceedings. Therefore, at that stage, invoking Section 11A on the ground that the order of the Assistant Collector resulted in short-levy or non- levy appears to be in consistent. As pointed out earlier, in this case, the original Show Cause Notice was already issued under Section 11A proposing to disallow the deductions claimed by the appellants and also proposing to recover the duty. In other words, the machinery under Section 11A has already been set in motion and the Assistant Collector rightly or wrongly approved the price lists by allowing certain deductions against which the Department proposed to file an appeal/revision and the only remedy available is through Section 35E. Therefore, the period of limitation provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Collector to determine the amount of duty not levied, short-levied etc. by follwing the procedure set out in Section 11A and thereafter collect such non-levy, short-levy etc. so determined. It is the initial act of determination of non-levy, short-levy etc. power for which has been specially conferred on the Assistant Collector. An adjudication order is required to be passed in accordance with law by the Assistant Collector. Section 35E, on the other hand, gives the power to superior authorities under the Act, namely Collector of Central Excise or the Central Board of Excise Customs, as the case may be, to examine the legality or propriety of such order passed by the lower officer or the Collector respectively. If such superior is not satisfied about the legality or propriety of such an order then it may direct the adjudicating authority or any other authorised officer to make an application to the Appellate Tribunal or Collector (Appeals) for determination of such points as may arise out of such adjudication order in the view of such superior authority. In short, powers under Section 35E are given to the two highest superior authorities of the department of Central Excise to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted under the Central Boards of Revenue Act, 1963 (54 of 1963), (hereinafter referred to as the Board), may, of its own motion or otherwise, call for and examine the record of any proceeding in which any decision or order has been passed under this Act or the rules made thereunder by a Collector of Central Excise (not being a decision or order passed on appeal under Section 35) for the purpose of satisfying itself as to the correctness, legality or propriety of such decision or order and may pass such order thereon as he thinks fit. (2) The Collector of Central Excise may, of his own motion or otherwise, call for and examine the record of any proceedings in which any decision or order has been passed under this Act or the rules made thereunder by a Central Excise Officer subordinate to him (not being a decision or order passed on appeal under Section 35) for the purpose of satisfying himself as to the correctness, legality or propriety of such decision or order and may pass such order thereon as he thinks fit. (3)(a) No decision or order under this section shall be varied so as to prejudicially affect any person unless such person is given a reasonable opportunity of making a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied or has been short-levied or erroneously refunded, no order levying or enhancing the duty, or no order requiring payment of duty so refunded, shall be made under this section unless the person affected by the proposed order is given notice to show cause against it within the time limit specified in Section 11A." It would be observed from clause (b) of Section 35A(3) and 3rd proviso to Section 36(2) that time limits, as specified in Section 11A was introduced with reference to revision of orders resulting in non-levy, short-levy or erroneous refund. Chapter VIA which brings, inter alia, Section 35E into force, apart from changing the forum for revision of orders i.e. Appellate Tribunal in place of Central Government and the Board, or Collector (Appeals) in place of Collector of Central Excise, also deleted the time limits, as specified in Section 11A, as mentioned above. In view of this deletion of reference to time limits specified in Section 11A in the new provisions of Section 35E, I am of the opinion that legislature has deliberately intended to do away with the time limits of Section 11A with reference to such revision of adjudication orders. We must respect such clear leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion open even where the show cause notice was issued for short levy at the first instance by the Superintendent but dropped by the Assistant Collector and thereafter the Collector of Central Excise issued show cause notice to the assessee under Section 35A of the Act proposing to revise and set aside the order of the Assistant Collector and proposing to confirm the demand of duty allegedly evaded by the assessee as detailed out in the notice of Superintendent, whereas the present case as stated above is the case of finalisation of the provisional list. 18.In the result, the question referred to the Larger Bench is answered in the emphatic `No' and it is held that on the facts and circumstances the limitation prescribed under Section 35E of Central Excises and Salt Act, 1944 should not be in accordance with Section 11A. Sd/- (G.P. Agarwal) Member (J) Sd/- (Harish Chander) President Dated : 4-3-1994 Sd/- (K.S. Venkataramani) Member (T) Sd/- (P.C. Jain) Member (J) 19.[Order per : S.K. Bhatnagar, Vice President]. - While I agree with the proposed conclusion to the effect that the limitation prescribed under Section 35E is independent of that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional till it is not finalised by the competent authority, I am unable to agree with the observations implying that if a payment is made after the assessment has been finalised by way of an adjudication or appellate order and such payment is made under 'protest', the case would once again revert to or acquire a provisional character because there is no provision for such a revival or restoration under Rule 9B or otherwise. Rule 9B deals only with the provisional actions prior to final assessment or adjudication and the Sections for appeal or revision do not prescribe any such course. Rule 233B does not deal with the assessment per se and merely lays down the procedure to be followed in cases in which the duty is paid under protest. In fact this Rule only makes it clear that "in cases where the remedy of an appeal or revision is available to the assessee against an order or decision which necessitated him to deposit the duty under protest, he may file an appeal or revision within the period specified for filing such appeal or revision as the case may be" (Clause 6). It also mentions inter alia, that "on service of the decision on the represen-tation referred to in sub-rule 5 or of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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