9911796707
TMI Blog2013 (8) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain 'towels hand white' through supply order dated 14th of November, 1995 but has failed to deposit the Central Excise Duty. The proceedings against the respondent manufacturer was set to motion by issuing a show cause notice to the respondent manufacturer on the allegation that it has supplied the goods from the period April 1996 to June, 1996 and has charged the excise duty at the rate of 10 per cent amounting to Rs.11,11,400.86 but not debited either in PLA or in RG-23A/RG-23 C Part-II and thus, contravened the provisions of Rule 52-A (6) of the Central Excise Rules. The cause was shown by the respondent manufacturer by denying its liability. The allegations of contravention of Rules as well as charge of collecting the Central Excise Duty but not paying it to the credit of the Central Government were denied. The respondent manufacturer requested to provide copies of RT-12 return duly assessed for the year 1995-1996, triplicate copies of invoices issued during the period of demand and copies of audit report for the year 1995-1996. The request for supply of the documents referred to above made by the respondent manufacturer was rejected. The Additional Commissioner, Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant submitted that on the facts of the present case, the Tribunal has misinterpreted and misconstrued the sections 11A and 11D of the Central Excise Act (hereinafter referred to as the Act). The extended period of limitation of five years as provided in section 11 A cannot be imported and read under section 11D of the Act. Submission is that on the facts it is established beyond doubt that the respondent manufacturer has collected the excise duty on the supplies made during the period April, 1996 to June, 1996 on 'towels hand white' but has failed to deposit the same. The respondent manufacturer has been unjustly enriched as it collected the duty but failed to deposit the same with the Central Government and in such cases, bar of period of limitation will not be attracted. It was also submitted that the Rules as then existed, had provided payment of duty on self assessment by the manufacturer. Even if the Department has not assessed the duty by making an assessment order, nonetheless it cannot be said that there is no assessment of duty inasmuch as it is a case of self-assessment of duty which amounts to assessment and therefore, the duty amount can be recovered from the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lected any amount in excess of the duty assessed or determined and paid on any excisable goods under this Act or the rules made thereunder from the buyer of such goods in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government. (1A) Every person, who has collected any amount in excess of duty assessed or determined and paid on any excisable goods or has collected any amount as representing duty of excise on any excisable goods which are wholly exempt or chargeable to nil rate of duty from any person in any manner, shall forthwith pay the amount so collected to the credit of the Central Government. (2) Where any amount is required to be paid to the credit of the Central Government under sub-section (1) or sub-section (1A), as the case may be, and which has not been so paid, the Central Excise Officer may serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government. (3) The Central Excise Officer shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (5) provides for refund of excess duty so paid on the application filed by the person within six months. On reading of section 11-D as a whole would show that this section provides for payment of duty on provisional basis i.e. till the finalization of assessment or any other proceeding for determination of duty of excess. The aforesaid section has been substituted w.e.f. 20th of September, 1991. The aforesaid section opens with a non obstante clause - "notwithstanding anything contrary to law contained in any order or direction or Rules made thereunder". But at the same time, it provides that the amount collected by the person liable to pay the duty under the Central Excise Act is in excess of the "duty assessed or determined and paid". These are the key-words. It presupposes the determination or assessment of duty. Only thereafter, the question of excess collection of duty over and above the duty assessed or determined would arise. The point which we are trying to bring home is that the assessment or determination is sine qua non under sub-section (1) of section 11-D to hold a person that he has collected any amount in excess of duty assessed or determined. It is nobody's case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the self-assessment on its whims and fancy. There has to be an adjudication in case of dispute by some authority who is competent to adjudicate it. The self-assessment should be accepted as such by the department else there should be proceedings for assessment. Meaning thereby, if there is no dispute with regard to self-assessment it should be treated as final. The problem on hand can be seen from another angle too. The show-cause notice and the order-in-original is based on terms of section 11D of the Act. Section 11D, casts obligation on the manufacturer to deposit the duty collected from the buyer subject to finalisation of assessment. To put it differently, deposit of duty is provisional subject to adjustment on finalisation of assessment. It does not talk of assessment or determination of duty, if any. Section 11D is in the nature of machinery provision for collection of duty, till final assessment, where the duty has been collected but not deposited. The substantive provision is section 11A which deals with recovery of duties not levied or not paid or short levied or short paid or erroneously refunded. Resultantly, in these situations, the recourse could only be to section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Department is that it is a case where the assessee respondent has realized the excess duty on the supplies made to the Air Head Quarters, but has not deposited the duty. The contention is that irrespective of expiry of period of limitation prescribed under section 11-D, the doctrine of unjust enrichment will come into play in favour of the department and against the respondent manufacturer. It was submitted that one of the partners Vinay Agrawal has admitted that the duty has not been paid and deposited of Rs.4,50,000/- by him, is indicative of the fact that it is a case of duty realised but of short deposit. Strong reliance has been placed upon the well known judgment of the Apex Court in the case of Mafatlal Industries Ltd. v. Union of India [1998] 111 STC 467.It has been laid down therein that a claim for refund of tax or duty can succeed only if the petitioner alleges, and establishes that he has not passed on the burden of duty to another person as in the case of passing of burden to another, the real loss or prejudice is suffered by the person who has ultimately borne the burden and only that person can legitimately claim the refund. Doctrine of unjust enrichment is just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 996 to June, 1996 and has not paid the duty payable on them. Taking the show-cause notice on its face value, it was not the case of the Department in the show-cause notice that the respondent manufacturer is liable to pay the duty under the doctrine of unjust enrichment. The clandestine removal of the goods being the stand of the Department, it is to bring its case within the four corners of section 11-A of the Act which it has failed to do. The order in original proceeds on the footing that it is true that duty cannot be recovered under section 11-A after lapse of five years but there is no period of limitation provided under the Rule or Act for the purposes of imposing penalty under the different Rules forgetting that non-payment of duty and penalty are two different things; when duty could not be levied, question of levy of penalty for non-payment of duty does not arise. It proceeds thereafter to hold that noticee has contravened the provisions of Rule 9, 52A, 173B and 173G of the then Central Excise Rules, 1944 are liable to penalty under Rule 173Q of the Central Excise Rules, 1944. In the present appeal, the Department has not raised any such question as to whether the noticee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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