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TMI Blog1985 (2) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... instant case there has been no assessment of the manufactured goods at all as contemplated by Rule 52 of the Rules and the delivery of the goods has taken place contrary to Rule 52-A of the Rules. The discussion and correspondence between the assessee and the officers concerned had taken place on December 20, 1961 and January 416, 1962 was in the nature of an advice and not an assessment as contemplated under Rule 52. Hence this case is not covered by Rule 10 of the Rules at all. Rule 10-A of the Rules which is a residuary provision is, therefore, necessarily attracted. Hence the plea of limitation raised on the basis of Rule 10 of the Rules does not survive. In the result we set aside the judgment of the High Court and dismiss the writ petition filed by the respondent. Appeal allowed - Civil Appeal No. 2277 of 1970 - - - Dated:- 12-2-1985 - VENKATARAMIAH, E.S., REDDY, O. CHINNAPPA AND MUKHARJI, SABYASACHI, JJ. D.K. Sen, V.C. Mahajan and R.N. Poddar for the appellant K.K. Venugopal, D.N Misra, T M Ansari and P.K. Rana for the respondent JUDGMENT VENKATARAMIAH, J, This appeal by certificate under Article 133(1) (a) of the Constitution is filed against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are manufactured from any other dye on which excise duty or countervailing customs duty has already been paid. Schedule 1. Solubilised Vats, 2. Rapid fast colours, 3. Rapidogenes, 4. Fast Colour Salts. (180/61) sd/- (B.N. Banerji) It may be stated here that cibagenes and cibanogenes which were being manufactured by the respondent belong to the class of dyes referred to in the Schedule annexed to the above said notification. After the above notification was issued, the respondent wrote a letter dated December 22, 1961 to the Superintendent of Excise, Bulsar Division, Bulsar which read as follows: Dear Sir, You are aware that under the Notification No. 180/61 of the 23rd November, 1961 issued by the Government of India, Min. Of Finance (Dept. of Revenue), Rapidogenes/Rapid fasts colour bases are exempted from the excise duty provided dyes are manufactured from other dyes on which excise duty or countervailing customs duty has already been paid. During the course of discussions we had on the 20th December, 1961 with the Collector of Central Excise and yourself, we pointed that we purchase Fast Colour Bases, required in the production of Rapidogenes/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c dyes, by voluntarily paying duty on the basic dyes after March 1, 1961 in accordance with law in force then. The audit party was further of the view that there was short levy of excise duty on account of the above mistake since the respondent had paid excise duty on the basic dyes at 30% ad valorem whereas it was liable to pay duty at 30 % ad valorem on the products manufactured by it which were costlier than the basic dyes. The Assistant Collector of Central Excise at Surat therefore issued five notices under Rule 10-A of the Rules to the respondent all on May 20, 1964 calling upon it to show cause as to way the deficit amount of excise duty should not be recovered in respect of the excisable goods manufactured by it at different periods before that date. We reproduce below one of such notices, the contents of which were more or less the same except with regard to the amount claimed and the number of the relevant demand notice: INTEGRATED DIVISIONAL OFFICE: CUSTOMS CENTRAL EXCISE, SURAT No. VI (RR) 21-13/62/II/(iv) Surat, the 20th May 1964 NOTICE Whereas it has been reported that M/s Atul Products Limited, Atul have manufactured Synthetic Organic Dyes namely Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10174 6.1.64 1,80,593.47 30-12-61 to 30-5-62 4. 10175 6.1.64 2,930.22 Supplementary to 10163 and 10166 5. 10179 25.2.64 8,349.00 24.12.64 2,18,363.96 The respondent sent a common reply to the above notices on June 19, 1964. The respondent contended that it had cleared the products manufactured by it namely cibagenes and cibanogenes in accordance with the Rules. It pleaded that there was no justification to conclude that it had paid excise duty on fast colour bases used by it in manufacturing the said goods voluntarily as the Superintendent, Central Excise, Bulsar had confirmed that according to Government of India's notification dated November 23, 1961 it was required to pay excise duty on the fast colour bases before they were used in the production of the said processed dyes and also had written that the Dy. Superintendent of Central Excise, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 was issued. In the said letter the respondent no doubt stated 'the material which the local manufacturer has offered us was produced before the imposition of excise duty on dyes'. But it was followed by the sentence 'We now propose to pay the excise duty on the Fast Colour bases ....... '. In that letter there was a request made to the superintendent of Central Excise to accept excise duty on the fast colour bases which the respondent would purchase either from the local manufacturer or from the open market. The letter did not contain any particulars about the quantity of such dyes which the respondent wished to purchase or its value . The Superintendent of Central excise in his reply stated that there was no objection to the to the payment of excise duty on fast colour bases purchased by the respondent and that if evidence of payment of exercise duty on fast colour bases was produced, the dyes manufactured by using those fast colour bases would not be liable to duty under notification. The above reply was intended to convey in effect what the notification stated. It was perhaps assumed that payment of excise duty would arise only when it was payable Under law. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case before us, the notification relied on by the respondent is couched in a different language. It specifically states that if and only if the dyes are manufactured from any other on which excise duty or countervailing customs duty has already been paid, the exemption can be availed of by the manufacturer of such dyes. The above decision of this Court is, therefore, clearly distinguishable from the present case. With great respect to the High Court it should be stated that the distinction pointed out above was not noticed by it. The decision in Hansraj Gordhandas v. H. H. Dave, Assistant Collector of Central Excise Customs, Surat two Ors ([1969] 2 S.C.R. 253) does not also have any bearing on this case. There the Court was concerned with the meaning of the notification in question which had granted exemption from payment of excise duty on cotton fabrics manufactured on powerlooms owned by cooperative societies registered prior to March 31 1961. The appellant had produced with his own hired labour cotton fabrics on the powerlooms owned by a cooperative society under a contract. Still the Court found that the appellant was entitled to the benefit of exemption since he had manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy, the proper Rule applicable to its case was Role 10 and not Rule 10-A. Rule 10 and Rule 10-A of the Rules during the relevant period ran as follows:- 10 Recovery of duties or charges short-levied, or erroneously refunded- When duties or charges have been short-levied through inadvertence, error, collusion or misconstruction on the part of an officer, or through mis-statement as to the quantity, description or value of such goods on the part of the owner, or when any such duty or Charge, after having been levied, has been owing to any such cause, erroneously refunded, the person chargeable with the duty or charge, so short-levied, or to whom such refund has been erroneously made, shall pay the deficiency or pay the amount paid to him in excess, as the case may be, on written demand by the proper officer, being made within three months from the date on which the duty or charge was paid or adjusted in the owners account-current, if any or from the date of making the refund. 10-A. Residuary powers for recovery of sums due to Government- Where these Rules do not make any specific provision for the collection of any duty, or of any deficiency in duty if the dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would appear to cover any deficiency in duty if the duty has for any reason been short-levied except that it would be outside the purview of Rule 10-A if its collection is expressly provided for by any Rule. Both the rules, as they stood at the relevant time dealt with collection and not with assessment. They have to be harmonised. In N. B. Sanjana's case (supra) this Court harmonised them by indicating that Rule 10-A which was residuary in character, would be inapplicable if a case fell within a specified category of case mentioned in Rule 10. It was pointed out in Sanjana s case (supra) that the reason for the addition of the new Rule 10-A was a decision of the Nagpur High Court in Chhotabhai Jethabhai Patel v. Union of India (A. I- R 1952 Nag. 139) so that a fresh demand may be made on a basis altered by law. The Excise authorities had then made a fresh demand, under the provisions of Rule 10-A, after the addition of that Rule, the validity of which challenged but upheld by Full Bench of the High Court of Nagpur. This Court in Chhotabhai Jethabhai Patel Co. v. Union of India [1962] Supp. 2 S. C- R. 1. also rejected the assessee's claim that Rule 10-A was inapplicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f evidence that this sum has been paid into the Treasury or paid in the account of the Collector in the Reserve Bank of India or the State Bank of India, or has been despatched to the Treasury by money-order shall allow the goods to be cleared. 52-A (1) Goods to be delivered on a Gate pass- No excisable goods shall be delivered from a factory except under a gatepass in the proper form or in such other form as the Collector may in any particular case or class of cases prescribe signed by the owner of the factory and countersigned by the proper officer....... The facts of this case indicate that the Department was virtually inveigled into a trap by the respondent suggesting that it was too eager to pay excise duty on certain goods which to the knowledge of the respondent were not liable for excise duty with the object of getting the benefit of the right to clear its products which were liable for higher excise duty because of their increased value without paying any duty at all. Rule 10 of the Rules deals with four kinds of mistakes on the part of an officer which bring a case within its sweep. Of them 'inadvertence' 'error' and' mis-construction' are mistake ..... X X X X Extracts X X X X X X X X Extracts X X X X
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