1994 (6) TMI 21 - AT - Central Excise

Revision - Limitation for revision - Demand - Provisional assessment - Relevant date - Protest

Issues Involved:
1. Whether the limitation prescribed under Section 35E(3) of the Central Excises and Salt Act should be in accordance with Section 11A.
2. Whether the appeal filed by the Assistant Collector in pursuance of the directions of the Collector (Appeals) was time-barred.
3. Whether the finalization of provisional assessments and the payment of duty under protest affect the relevant date for limitation purposes.
4. Whether Section 11A and Section 35E serve different purposes and should be read independently.

Detailed Analysis:

1. Whether the limitation prescribed under Section 35E(3) of the Central Excises and Salt Act should be in accordance with Section 11A:

The Tribunal examined whether the limitation period for filing an appeal under Section 35E(3) should align with the six-month period specified in Section 11A for cases involving short levy of duty. The appellants argued that since the Assistant Collector's order dated 15-10-1984 resulted in a short levy of duty, the review order under Section 35E should be passed within six months from the relevant date as per Section 11A. The Department contended that Section 11A did not apply as the assessments were provisional and the appeal was filed against the deductions allowed by the Assistant Collector.

The Tribunal concluded that Section 11A and Section 35E operate in different areas and serve different purposes. Section 11A deals with the initial determination of duty not levied or short-levied, while Section 35E provides for the review of orders by superior authorities. Therefore, the limitation period under Section 35E(3) is independent of Section 11A.

2. Whether the appeal filed by the Assistant Collector in pursuance of the directions of the Collector (Appeals) was time-barred:

The Tribunal considered whether the appeal filed by the Assistant Collector on 2-12-1985, following the Collector's directions dated 11-10-1985, was within the prescribed time limit. The appellants argued that the appeal should have been filed within six months from the date of the Assistant Collector's order (15-10-1984), as per Section 11A. The Department maintained that the one-year period specified in Section 35E(3) applied.

The Tribunal held that the appeal was not time-barred as the one-year limitation period under Section 35E(3) was applicable. The Tribunal emphasized that Section 35E(3) provides a distinct time frame for reviewing orders, separate from the six-month period under Section 11A.

3. Whether the finalization of provisional assessments and the payment of duty under protest affect the relevant date for limitation purposes:

The Tribunal examined whether the payment of differential duty under protest and the finalization of provisional assessments influenced the relevant date for computing the limitation period. The appellants contended that the relevant date should be the date of the Assistant Collector's order (15-10-1984) or the date of the final payment of differential duty (31-3-1985). The Department argued that the relevant date would be the date of adjustment of duty after the final assessment.

The Tribunal concluded that the payment of duty under protest does not constitute the final adjustment of duty. The relevant date for limitation purposes is the date of adjustment of duty after the final assessment, which occurs when the dispute is finally settled. Therefore, the relevant date had not yet arisen in this case, and Section 11A did not come into play.

4. Whether Section 11A and Section 35E serve different purposes and should be read independently:

The Tribunal analyzed whether Section 11A and Section 35E should be read together or independently. The appellants argued that the two sections should be harmoniously construed, with Section 11A's six-month limitation applying to cases of short levy. The Department contended that Section 35E and Section 11A are independent provisions with distinct purposes.

The Tribunal agreed with the Department, stating that Section 11A deals with the initial determination and recovery of short-levied duty, while Section 35E provides for the review of orders by superior authorities. The Tribunal emphasized that the legislative history and the specific time limits in Section 35E indicate that the two sections operate independently.

Conclusion:
The Tribunal concluded that the limitation prescribed under Section 35E of the Central Excises and Salt Act, 1944, should not be in accordance with Section 11A. The appeal filed by the Assistant Collector was within the one-year limitation period specified in Section 35E(3), and the payment of duty under protest did not affect the relevant date for limitation purposes. Section 11A and Section 35E serve different purposes and should be read independently.

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