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TMI Blog1985 (4) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid products from a portion of the duty leviable thereon subject to the Collector of Central Excise being satisfied, inter alia, that the products were intended for use as solvent or diluent or thinner for the manufacture of paints, varnishes, lacquers and allied materials or for use in painting. Where such use was elsewhere than in the factory of manufacture of the products, the exemption was subject to the compliance with the procedure laid down in Chapter X of the Central Excise Rules, 1944. Amber Paints accordingly obtained 19.480 Kilo Litres of toluene at the concessional rate of duty and manufactured 37.419 Kilo Litres of solvent/thinner out of the toluene. They used 15.819 K.Ls of solvent/thinner out of the aforesaid quantity in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Central Government under Section 36(2) of the Central Excises and Salt Act, 1944, the Government examined the records relating to the Order-in-Appeal passed by the Appellate Collector of Central Excise, Bombay to decide for itself whether the order was proper, legal and correct. The Central Government formed the tentative view that the order was not proper, legal and correct inasmuch as the concession under Notification No. 35/73 was prima facie available only to those licensees who used the goods so obtained in manufacturing thinner which was used by them in the manufacture of paints and varnishes in their own factory and not by their customers. Government, therefore, issued a show cause notice bearing No. F. 198/4/212/81-CX.V, date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustan Pvt. Ltd. v. Collector of Central Excise, Calcutta - 1984 ECR 1527. 5. Replying to the preliminary objection, Shri S.N. Khanna, Departmental Representative, stated that the original show cause notice culminating in the present proceedings was the one issued by the Superintendent of Central Excise, Broach on 26-5-1979. The said notice was issued in terms of Rule 196 of the Central Excise Rules, 1944. Shri Khanna contended that the limitation of 6 months with reference to Section II A of the Central Excises and Salt Act, 1944 would not apply to the present review notice dated 5-1-1982. Under Rule 196, there was no time-limit imposed for issue of a notice seeking to recover differential duty. In support of this contention, he relied u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 18,554.25 should not be demanded from them under Rule 196 of the Central Excise Rules. Turning to the adjudication order, dated 30-6-1980 passed by the Deputy Collector of Central Excise, Baroda, it is seen that the adjudicating authority held that Amber Paints had contravened the conditions of the L-6 licence and Notification No. 35/73 and, consequently, he confirmed the demand for duty as in the show cause notice. It is thus clear that the demand for duty was made in terms of Rule 196 and not Rule 10. The Tribunal in the Bajaj Tempo case 1984 (16) E.L.T. 294 = 1984 E.C.R. 1610 - has held that a demand can be made under Rule 196 without any period of limitation. The relevant portion of the Rule reads thus Rule 196(1). - If any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the toluene contained in 400 litres of solvent/thinner, by the Appellate Collector by his order dated 27-6-1981. The Section 36(2) notice was issued. on 5-1-1982, i.e. more. than six months from the date of the order sought to be revised. 8. The 3rd proviso reads thus :- Provided also that where the Central Government is of opinion that any duty of excise has not been levied, or has bees short-levied or erroneously refunded, no order levying or enhancing the duty, or no order requiring payment of the duty so refunded, shall be made under this Section unless the person affected by the proposed order is given notice to show cause against it within the time-limit specified in Section 11A. 9. Can it be said that the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be used within a particular period. In this background, the question of demanding any sum representing the differential duty on the toluene received by Amber Paints could not have arisen till the goods were taken into use a in manner otherwise than as provided or in the event of unsatisfactory accountal of the goods. It will be clear, therefore, that a demand for differential duty on the occurrence of such eventualities would not be the same thing as a demand for duty on account of non-levy or short-levy. In this view of the matter, the 3rd proviso to Section 36(2) of the Central Excises and Salt Act, is not attracted in the instant case and the show cause notice is not consequently hit by the limitation contained in the said provision. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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