1989 (10) TMI 129 - AT - Central Excise

Summary

Issues:
1. Appeal against orders passed by Collector of Central Excise (Appeals) Delhi regarding excise duty credit.
2. Validity of demand for excess excise duty credited to PLA.
3. Provisional vs. final sanction of refund of duties.
4. Time-barred demand and suppression of facts.
5. Applicability of previous rulings and Bombay High Court judgment.
6. Lack of show cause notice and applicability of Trade Notice.

Analysis:
1. The appellants appealed against the orders passed by the Collector of Central Excise (Appeals) Delhi regarding the excise duty credit allowed to them, which was later found to be in excess of the actual amount paid on clearances of free sale sugar.

2. The main issue revolved around the validity of the demand made by the Assistant Collector for the excess amount credited erroneously to the PLA. The appellants argued that the demand was not valid as there was no provisional sanction of refund of duties, and any amount erroneously allowed could be recovered within six months from the date of payment under Rule 10(1). They also contended that the demand was time-barred and illegal due to the absence of suppression of facts.

3. The appellants raised concerns regarding whether the sanction of refund of duties was provisional or final. They argued that the Assistant Collector's order was final and not provisional, as there were no outstanding dues to be adjusted before crediting the sanctioned amount to the PLA.

4. The issue of the demand being time-barred was brought up, with the appellants claiming that the demand raised on a certain date was beyond the permissible time limit for recovery. They emphasized that since there was no suppression of facts, the demand should be deemed unenforceable.

5. The parties relied on various previous rulings and judgments, including those from the Supreme Court and the Bombay High Court, to support their arguments. The appellants cited multiple rulings where similar appeals had been allowed, while the Respondent highlighted a Bombay High Court judgment supporting the recovery of excess production rebate and provisional assessment.

6. The lack of a formal show cause notice under Rule 10 of the Central Excise Rules was discussed, with the appellants pointing out that only a demand for payment was issued without a proper show cause notice. The Tribunal concluded that the Bombay High Court judgment cited by the Respondent was not applicable to the case, as there was no Trade Notice or undertaking given by the appellants.

7. Ultimately, the Tribunal decided to follow the rulings of the Supreme Court and previous cases, such as the Collector of Central Excise, Chandigarh v. Doaba Co-operative Sugar Mills and Triveni Engg. Works Ltd. v. Collector of Central Excise, New Delhi. As a result, the appeal was allowed, and the impugned order of the lower authorities was set aside.