9911796707
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Issues:
- Interpretation of Rule 10 and Rule 10-A of the Central Excise Rules, 1944. - Application of Rule 10-A in the case of short levy of excise duty. - Validity of Rule 10-A and its repeal. - Impact of the introduction of Section 11-A on recovery of excise duty. Analysis: The judgment pertains to a dispute involving the demand of excise duty on steel rails purchased by the plaintiff for re-rolling in their own mills. The central issue revolves around whether the demand in question is illegal, as alleged by the plaintiff. The plaintiff argued that no separate duty was payable on the rails as duty had already been paid on the purchase. The Inspector of Central Excise issued a notice demanding differential duty, which the plaintiff contested. The trial court decided against the plaintiff on this issue, leading to subsequent appeals. The key contention was whether the demand notice related to short levy of excise duty on the rails or on the articles manufactured by the plaintiff using those rails. The Department argued that the demand notice was for excise duty on the manufactured articles, not the rails themselves. The plaintiff's failure to provide evidence of manufacturing exempt goods led the courts to apply Rule 10-A instead of Rule 10 for recovery of sums due to the government. The plaintiff argued that Rule 10 applied, citing precedents where Rule 10 was deemed applicable in cases of short levy. However, the courts found that the plaintiff's failure to comply with the notice to provide data on manufactured goods rendered Rule 10-A applicable. The plaintiff further contended that Rule 10-A was ultra vires, but subsequent Supreme Court rulings upheld the validity of Rule 10-A, rejecting the plaintiff's argument. Regarding the repeal of Rule 10-A and the introduction of Section 11-A, the plaintiff argued that the demand notice fell outside the five-year period stipulated in Section 11-A. However, the courts held that since Rule 10-A was in force when the demand notice was issued, the case fell under Rule 10-A, which had no limitation period. Therefore, the courts affirmed the findings of the lower courts and dismissed the plaintiff's appeal with costs.
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