1985 (10) TMI 180 - AT - Central Excise

Summary

Issues Involved:
1. Retrospective application of the Paper and Paper Board Cess Rules, 1981.
2. Authority of the Central Excise Collector to collect cess before 16-2-1981.
3. Notification and communication of rules to the public.
4. Applicability of Central Excises and Salt Act provisions to the levy and collection of cess.

Detailed Analysis:

1. Retrospective Application of the Paper and Paper Board Cess Rules, 1981:

The appellants argued that the Paper and Paper Board Cess Rules, 1981, made on 16-2-1981, could not be applied retrospectively to the period from 1-11-1980 to 16-2-1981. They contended that the demand for cess for the prior period was not tenable since the rules were made only on 16-2-1981. The Tribunal, however, noted that the levy of the cess came into force on 1-11-1980 and the machinery for collection was set up on 16-2-1981. The Supreme Court's decision in the Dhanpat Oil & General Mills case was cited, which clarified that the absence of a duly appointed Collector did not relieve the liability to pay the cess. Hence, the appellants were liable to pay cess for the back period.

2. Authority of the Central Excise Collector to Collect Cess Before 16-2-1981:

The appellants argued that the Central Excise Collector was not empowered to collect cess before 16-2-1981, as no Collector had been appointed until that date. The Tribunal referred to the Supreme Court's judgment in Dhanpat Oil & General Mills, which held that the obligation to pay cess accrued with the taxable event and subsisted even during periods when no Collector was appointed. Therefore, the Collector, once appointed, could collect cess for the entire period from the commencement of the levy, including the period before their appointment.

3. Notification and Communication of Rules to the Public:

The appellants contended that they were not aware of their liability to pay the cess until the trade notice was published on 3-3-1981. They argued that the rules should only come into effect from the date of publication of the trade notice. The Tribunal, however, pointed out that the Madras High Court decision in the Asia Tobacco case, which supported this view, had been stayed by a Division Bench. Furthermore, the Tribunal emphasized that the liability to pay cess existed from 1-11-1980, and the date of notification or trade notice did not alter this liability.

4. Applicability of Central Excises and Salt Act Provisions to the Levy and Collection of Cess:

The appellants argued that the provisions of one enactment could not be applied to another by a rule, citing the Supreme Court's decision in A.S. Bawa. The Tribunal distinguished this case, noting that the application of the Central Excises and Salt Act provisions to the levy and collection of the cess did not alter any substantive rights of the appellants. The Tribunal concluded that the Collector was competent to collect the cess for the back period once appointed, and the appellants were liable to pay it.

Conclusion:

The Tribunal dismissed the appeal, holding that the appellants were liable to pay the cess for the period from 1-11-1980 to 16-2-1981. The retrospective application of the Paper and Paper Board Cess Rules, 1981, was upheld, and the authority of the Central Excise Collector to collect cess for the back period was confirmed. The notification and communication of rules to the public did not affect the liability to pay the cess from the date of its imposition.