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TMI Blog2006 (11) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... nt conditions including filing of undertaking with the jurisdictional Assistant Commissioner/Deputy Commissioner of Central Excise. For the next financial year [2000 - 2001], similar undertakings of these parties required under the Notification were received belatedly by the jurisdictional Assistant Commissioner/Deputy Commissioner. In the case of the respondents in the department's appeals at Sl. No. 1 to 12, these undertakings were received by the Assistant Commissioner/Deputy Commissioner on the dates mentioned in the following table :- S. No. Appeal No. Date of receipt of undertaking by AC/DC Period for which demand of duty raised in SCN and dropped in impugned order 01. E/1185/2001 5-6-2000 1-4-2000-4-6-2000 02. E/22/2002 4-4-2000 1-4-2000-3-4-2000 03. E/23/2002 10-4-2000 1-4-2000-9-4-2000 04. E/24/2002 4-4-2000 1-4-2000-3-4-2000 05. E/25/2002 4-4-2000 1-4-2000-3-4-2000 06. E/26/2002 28-6-2000 1-4-2000-27-6-2000 07. E/56/2003 3-4-2000 1-4-2000-2-4-2000 08. E/57/2003 7-4-2000 1-4-2000-6-4-2000 09. E/58/2003 7-4-2000 1-4-2000-6-4-2000 10. E/59/2003 19-10-2000 11-9-2000-18-10-2000 11. E/60/2003 6-4-2000 1-4-2000-5-4-2000 12. E/117 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od prior to the date of filing of undertaking. Accordingly, learned Commissioner (Appeals) denied the benefit of exemption under the Notification to the assessees for the respective periods. The orders of the original authority dropping demands of duty were set aside and penalties were also imposed on the assessees. 2. The main issue arising in all these appeals is whether the benefit of exemption under Notification No. 41/99-CE dated 26-11-1999 will commence only from the date of receipt of undertaking by the AC/DC of Central Excise or whether it also covers the period prior to the said date in respect of tea cleared by a factory belonging to a cooperative society or by a bought-leaf factory during any financial year subsequent to 1999 - 2000. In two appeals [E/490/2003 and E/579/2003], a similar issue arises in respect of tea cleared from factory during a part of the financial year 1999-2000 viz. 10-12-1999 to 31-3-2000 and 10-12-1999 to 12-12-1999 respectively. In yet another appeal [E/40/2005], the issue pertains to the financial year 2001-02. Any decision on these issues would call for a correct understanding of the provisions of the above Notification. 3. Notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y during the period, from the date of the aforesaid undertaking till the end of the financial year, shall not be purchased from any grower who has a holding exceeding ten hectares under tea cultivation. (ii) The co-operative society owning the factory is registered with the Registrar of Cooperative Societies in the concerned State Government. (iii) No member of the co-operative society owns a holding exceeding ten hectares under tea cultivation. (c) In the first week of each succeeding financial year, the manufacturer shall submit a statement of accounts, in a format to be prescribed by the jurisdictional Commissioner of Central Excise, as proof of having fulfilled the undertaking. (d) In the event of his failure to satisfy the undertaking, the manufacturer shall be liable to pay duty of excise specified in the First Schedule to the said Central Excise Tariff Act for the period referred to in condition (b). III. Tea cleared by a bought leaf factory during the period on and from 10th December, 1999 to 31st March, 2000. (a) The benefit of exemption from duty will commence from the date of the undertaking with The Assistant Commissioner/Deputy Commissioner of Central Excise as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not exceeding ten hectares of land under cultivation of tea. [emphasis supplied] 4. Some of the factories involved in these cases belong to cooperative societies and the conditions mentioned against Sl. No. I of the TABLE annexed to the Notification are relevant to these factories in respect of tea cleared from 10-12-1999 to 31-3-2000. In respect of tea cleared by these factories during any financial year subsequent to 1999-2000, the applicable conditions are those mentioned against Sl. No. II of the said TABLE. Other factories involved in these cases (bought-leaf factories) would attract the conditions mentioned against Sl. No. III in respect of tea cleared by them from 10-12-1999 to 31-3-2000 and those mentioned against Sl. No. IV in respect of clearances effected during any financial year subsequent to 1999 - 2000. The dispute between the department and the assessees is on account of different interpretations of condition (a) given against SI. No. I/II/III/IV in the TABLE annexed to the Notification. This condition is identically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking is received by the AC/DC. On the other hand, learned consultant for M/s. Golden Dew Tea Factory has argued that the date of undertaking is the date on which the undertaking is sent and cannot be the date on which it is received by the AC/DC. While learned SDR has relied on the Tribunal's decision in Malanad Cooperative Tea Factory v. CC, Cochin - 2005 (186) E.L.T. 222 (Tri. - Bang.), learned Consultant has claimed support from the Tribunal's decision in Red Land Tea Factory v. CC, Cochin - 2003 (158) E.L.T. 720 (Tri. - Bang.). 7. It was argued by learned SDR that condition (a) was a substantive condition to be satisfied by tea manufacturers claiming the benefit of exemption from payment of duty on their products for the relevant period. It was mandatory rather than procedural. According to her, conditions (a) and (b) should be read together for gathering the legislative intent behind condition (a). It was submitted by learned counsel/consultants for the assessees that filing of undertaking with the AC/DC was only a procedural requirement and that any delay in this matter was only a condonable lapse. Both sides cited case law in support of their respective positions. Whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturers claiming the benefit of Notification 41/99-CE for any financial year subsequent to 1999-2000 was only directory. In this connection, he claimed support from the Apex Court's judgment in State of Orissa v. M.A. Tulloch & Co. Ltd. [AIR 1966 SC 365]. 9. SDR also held the assessees liable to be penalized under Rule 173Q for having removed dutiable goods without payment of duty. Counsel and Consultants contested the claim by submitting that no mens rea was brought out by the Revenue against the assessees. 10. Shri Saravanan also raised the plea of limitation against the relevant show-cause notices. It was pointed out that, during the periods of dispute, the limitation for demanding duty under Section 11A(1) of the Central Excise Act was six months and that the show-cause notices were issued beyond six months from the relevant dates. It was claimed that any such show-cause notice issued after six months from the date of expiry of period of dispute was time-barred. It was also pointed out that, in none of the show-cause notices, there was any allegation for invoking the extended period of limitation. Opposing this plea, learned SDR submitted that, as the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) which relate to the undertaking to be given by a tea factory for the benefit of the Notification should be read together, whereupon it will be seen that the date of the undertaking with the AC/DC is the date on which it is filed with the AC/DC by the manufacturer i.e. the date on which the AC/DC receives the undertaking into his file. It cannot be the date on which the manufacturer sends the undertaking by Registered Post or under Certificate of Posting. Concise Oxford Dictionary, Tenth Edition, provides the following meanings of the verb file : - (1) place (a document) in a file - (2) submit (a legal document, application or charge) to be officially placed on record. Webster's Third New International Dictionary of the English Language (Unabridged) (1976 Edition) gives the following meaning of the verb file : - to deliver (as a legal paper or instrument) after complying with any condition precedent (as the payment of a fee) to the proper officer for keeping on file or among the records of his office. Thus the literal meaning of the verb file would firmly support the view that the date of undertaking with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y understood may signify anything from intention embodies in positive enactment to speculative opinion as to what the legislature probably would have meant, although there has been an omission to enact it. In a Court of Law or Equity, what the Legislature intended to be done or not to be done can only be legitimately ascertained from that which it has chosen to enact, either in express words or by reasonable and necessary implication." There is a line of binding judicial authorities to the effect that, where the words used in an exemption notification are plain and clear in meaning and do not admit of any doubt or ambiguity, such words, represent the legislative intent, leaving no room for any rowing expedition into the intention of the exempting authority. In such a situation, there is no scope for "purposive interpretation" called for by Shri Bhaskar. Ld. Counsel also pleaded for "reasonable interpretation". We would say that, where the words used by the exempting authority are clear in meaning, there is nothing more "reasonable" than a taintless understanding of such meaning. The words used in condition (a) in Notification 41/99-CE are plain and clear and can only be read as me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peration of Rule 174 goods specified in the Schedule to the Central Excise Tariff Act, 1985 so long as such goods were chargeable to 'nil' rate of duty or remained exempt from the whole of the duty of excise leviable thereon. The First Schedule to the Notification required the manufacturer to make a declaration and give an undertaking as specified in the prescribed form while claiming exemption for the first time under the Notification and thereafter before the 15th day of April of each financial year. The goods in question were chargeable to 'nil' rate of duty during the period of dispute in that case [1-3-1990 to 21-8-1990]. As the assessee had not filed the requisite declaration and undertaking under Notification No. 11/88-C.E. (N.T.) ibid, the departmental authorities denied the benefit of the Notification to them and demanded duty for the above period. The decision of the authorities was sustained by the Tribunal and the Tribunal's decision was affirmed by the apex court. Their Lordships held that the declaration and undertaking required to be filed by the manufacturer under the first proviso to the above Notification was not an empty formality or a mere procedural requirement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ween. According to the ratio of the Tribunal's Larger Bench decision in Sri Shanmuga Bleaching Works (supra), as affirmed by the Hon'ble High Court, the provision of limitation which was in force on the date of issue of show-cause notice would be applicable to the demand of duty for any earlier period. Admittedly, the show-cause notices issued to the Consultant's clients were within one year from the relevant dates. Even otherwise, the time-bar plea of the consultant representing respondents in the Department's appeals seems to be innocuous inasmuch as he has not claimed that the plea was raised before the lower authorities. 16. In the department's appeals, the prayer is for restoration of the orders of the original authorities, which had demanded duty from the assessees and imposed penalties on them. The department wants such penalties to be restored along with demands of duty. The assessee-respondents oppose this prayer by submitting that no specific ground was raised by the Revenue as regards penalty. We find substance in this objection. The Revenue has not raised any ground for penalties though their prayer for restoration of the orders of the original authorities can als ..... X X X X Extracts X X X X X X X X Extracts X X X X
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