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TMI Blog2009 (8) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice dated 5-6-1992 (Annexure No. 13 to this writ petition). H (b) A writ, order or direction in the nature of certiorari quashing the impugned show cause notice dated 5-6-1992 (Annexure No 13 to this writ petition). (c) A writ, order or direction in the nature of mandamus commanding the respondents not to launch the prosecution proceedings on the basis of the impugned show cause notice dated 5-6-1992. (Annexure No. 13 to this writ petition). (d) A writ, order or direction in the nature mandamus commanding the respondents to withdraw the attachment order dated 6-7-1992 for the recovery which was issued in consequence to the show cause notice dated 5-6-1992 for the recovery of the amount mentioned in the show cause notice. 2. The background facts essentially in a nutshell are as follows:- The petitioner is a limited company engaged in manufacture and sale of sugar. From time to time, the Central government granted incentive rebate with regard to the central excise duties on the excess sugar provided by the sugar factory during the lean periods of low recovery as well as low supply of the cane. The aforesaid incentives had been granted for maximizing the consum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner in the show cause notice is unfounded and the same has already been adjudicated upon arid decided by the Supreme Court and this Court. The credit has been taken in the PLA in accordance with Rule 56A of the Rules, 1944. (iii) The department had full knowledge of the credit taken by the petitioner, there was no fraud or collusion or suppression of statement of fact, or contravention of the Act or Rules by the petitioner and the Proviso to of the Section 11A (1) will not (extended period of limitation of 5 years) be applicable in the case of the petitioner. 8. On the other hand Learned Standing Counsel appearing on behalf of the respondent has contended as follows :- (i) The petitioner company has no statutory power to take credit in the PLA on its own, without any specific executive order by the competent authority. Even when the Court orders in favour of the petitioner, specific executive order is required and the amount to be credited in PLA is to be quantified by the competent authority and petitioner can not make unauthorized entries in the PLA on its own. (ii) The petitioner has failed to specify the order by which they were authorized to take the credit and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry No. 1875 Rebate claim for the year 1977-78 as submitted to the Asstt. Collector entitled as per Hon'ble Supreme Court order. Credit taken as per scheme of Rules, 6,14,396.36 PLA Entry No. 1876 Rebate claim for the year 1980-81 as submitted to the Assistant Collector as per interpretation of Hon'ble Supreme Court credit taken as per Rule. 3,34,574.32 PLA Entry No. 1877 Rebate claim for the year 1981-82 as submitted to the Assistant Collector as per interpretation of Hon'ble Supreme Court. 16,01,371.93 1878 Rebate claim for the year 1982-83 as submitted to the Assistant Collector of Moradabad Division as per interpretation of Hon'ble Supreme Court. 25,19,587.10 1879 Rebate claim for the year 1987-88 as submitted to the Assistant Collector as per interpretation of Hon'ble Supreme Court's order. 48,70,644.84 Total 90,40,574.50 (The balance of Rs. 125.555/- shown against PLA entry No. 1874 raised Rs. 99,66,129.55 showing against entry No. 1879)" (2)(b) They also appeared to have readjusted the credit in respect of Basic Excise Duty and. by debiting the amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has not appended the said detailed procedure for granting incentive rebate as provided in the aforesaid paragraph-3 of the said notification. Therefore, the petitioner has failed to lay the procedure before this Court as appended in the said notification and deprived us from scrutinizing it. 14. The petitioner has placed much emphasis upon the aforesaid notification, therefore, at this juncture, reference to paragraph-4 of the said notification is quite relevant, which reads as under: "It is likely that before receipt of this procedure by the collectrates clearance as concessional rights would have been allowed for excess production for certain parties, in same cases. All that is necessary in such cases is to deter mine the entitlements and by deciding the quantities and the amounts to the extent of concessions conferred, by the balance, if any, may be created the present ledger account." (Emphasis supplied) 15. Thus, the aforesaid notification itself provides that the entitlement claimed by the petitioner should be determined by deciding the quantities and the amounts to the extend of concessions conferred, and only then the amount can be credited to the PLA. 16. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled on the basis of the orders of Supreme Court and Collector (Appeals), but the petitioner who was in utmost haste did not even wait for the determination of the amount. Thus Court h the aforementioned writ petition was quite conscious of fact that the amount to be credited in PLA by the petitioner was first as to be quantified and determined. 19. The petitioner has failed to refer to any of the specific order of the Supreme Court, Tribunal or the Ministry of Finance Government authorizing it to take credit of the amount, as aforesaid in respect of its claims. Thus the amount of the alleged claims were credited in PLA without any authorization of the Competent Authority as provided under the Act, as such the provisions of the Act and Rules made thereunder were contravened by the petitioner. 20. Much emphasis has been given by the petitioner, that the scheme of rebate is analogous to the provisions of Rule 56A of the Excise Rules 44. We are not all impressed by the submissions of the petitioner. The notification dated 20-11-1963/14-12-1963 does not help the petitioner in any way for the following reasons:- (a) Firstly, as already we have noticed hereinearlier that the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and procedure than Section 11B governing the refund including rebate on excess production. (b) No scheme of Rules authorise for taking the credit of an amount in PLA by the assessees of their own except on deposit of a sum on TR-6 and on the authority of an executive order passed by the Competent Authority of Central Excise allowing the assessee to take credit of a specified amount. (c) On the admission of the factory as per remarks shown by them in Col. 2 (i) of the PLA as well as in their letter dated 2-12-91 (as referred to above) the amount taken credit of by them on 24-7-1991 as aforesaid related to their claims as revised and submitted in consequences of certain issues decided by the Supreme Court in favour of the appellant including parties other than the factory (viz M/s. Dhampur Sugar Mills Ltd., Dhampur, as referred to in their letter dated 2-12-1991). The party however did not refer to any specific order of the Court/authorizing them to assume the powers of the Statutory Authority and to outright take the credit of the amounts representing their revised claim as stated to have been submitted to the proper officer of Central Excise for necessary sanction in accordan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 2 has assigned cogent and convincing reasons that petitioner was not entitled to take credit in PLA in accordance with Rule 56 A, without any authorization. The petitioner's claim that the incentives rebate claim is analogous to Rule 56A is misleading, the credit under the proforma scheme under Rule 56A is taken in RG 23 while the credit under incentive rebate scheme is taken in PLA after the determination of the amount and in the present case petitioner has taken credit on his own in the PLA and unnecessarily trying to take shelter behind the rule 56A and 56AA of the Central Excise Rules, 1944 just to counter the charge of unauthorized credit. The higher Appellate Court had only upheld the claim of the petitioner qua basic and additional excise duty and it had no occasion to quantify the amount of re bate admissible to them. The petitioner has no statutory power to take credit on its own without any specific executive order by the Competent Authority/Appropriate Authority even in case any benefit had accrued to the petitioner as a consequence of any order of any of the Court, specific executive order is required for taking such benefits under the provisions of law. 23. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been levied or paid or which has been short-levied or short-paid or to whom the refund as erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any willful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the pro- visions of this sub-section shall have effect, [ if for the words "Central Excise Officer" the words "Collector of Central Excise", and for the words "six months" the words "five years" were substituted.] Explanation : Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of six months or five years, as the case may be." 26. It is the contention of the petitioner that the show cause notice is time barred since the period of six months is to be calculated as per the first part of the provisions of Section 11A(1) of the Act, sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue and also in contravention of the provisions of Rule 9 read with Rule 173-G (i) of Central Excise Rules, 1944. The said M/s. Dhampur Sugar Mills Ltd., Dhampur thus appears to have contravened the provisions of Rule 9 and 173-C (i) of Central Excise Rules, 1944, by misstating the facts with intent to evade payment of Central Excise duty on the excisable goods cleared by them showing payment of duty le viable thereon by debiting the same against the amount of unauthorized credit so taken by them in their PLA which is recoverable from them, apart from rendering themselves liable to a penalty under Rule 9 (2) and 173-Q of Central Excise Rules, 1944, as extended period as provided under the said Rule read with Section 11A of Central Excise Salt Act, 1944 for the recovery of the amounts as aforesaid shall apply in this case. 7. The said M/s. Dhampur Sugar Mills Ltd., Dhampur, are therefore, hereby required to show cause to the Collector of Central Excise, Meerut, as to why a penalty may not be imposed upon them under rule 9(2) and 173Q of the Central Excise Rules, 1944 and also why the amount of basic/additional excise duty un-unauthorizedly taken credit of in their PLA and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court observed that the proviso appended to Section 11A of the Act extending the period of limitation is required to be applied if the conditions precedent therefore are satisfied, and consequently keeping in view the peculiar facts and circumstances of that case, the Apex Court did not interfere in the matter and upheld the order of Tribunal. Therefore, the aforesaid case was also confined to 4 its own fact and it does not help the petitioner in any way. 36. In the case of Collector Central Excise, Hyderabad v. M/s. Chemphar Drugs and Liniments, Hyderabad the matter reached the Apex Court after decision of the Tribunal wherein the Tribunal had concluded that the facts of the case do not warrant any inference of fraud and found that explanation given by the manufacturer was plausible. In the circumstances, the apex court upheld the findings of the Tribunal. Therefore, the aforesaid case was confined to its own facts and it also does not help the petitioner in any way. 37. The case of M/s. Continental Foundation Joint Venture Sholding Nathpa, Himachal Pradesh v. Commissioner of Central Excise, Chandigrh (supra) is confined to its own facts and in our opinion it is distinguishabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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