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TMI Blog2017 (9) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... to repay the advances and loans out of the additional funds generated out the benefits of those sugar incentive scheme - Whether the Tribunal committed error while interpreting and construing the provisions of Section 11-D of C.E.A., 1944, while ignoring the interpretation and construction of provisions of Section 5-A of C.E.A., 1944, granting exemption from duty of excise to the Appellant / Assessee which is required to be construed liberally while upholding the impugned order passed by the respondent Authority? Held that: - It is not in dispute that when the Government of India, Ministry of Food and Civil Supplies, had issued the said incentive scheme on 4th November, 1987 for new sugar factories and expansion projects, Section 11-D of the Central Excise and Salt Act, 1944 was not introduced by the Central Government. The Constitutional validity of Section 11-D of the Central Excise and Salt Act, 1944 has been already upheld by the Supreme Court. It is held that the incentive scheme is nothing but the executive instructions of the Ministry of Food and Civil Supplies and thus it could not override the provisions of Section 11-D of the Central Excise and Salt Act, 1944, enacted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Customs Act - even otherwise in view of the non obstante clause provided in Section 11-D of the Central Excise and Salt Act, 1944, which was introduced later in point of time, the said provision will prevail over the provisions of the Essential Commodities Act, 1955, having similar non obstante provision in Section 6. Appeal dismissed - decided in favor of Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... ories & expansion projects: (i) For eligibility to incentives under the 1987 Scheme, the respective letter of intent as well as industrial licence should have been issued after 1-10-1980. Where letters of intent had been issued prior to 1-101980 but were converted into industrial licences after the said date, the eligibility to incentives will be governed only by the 1980 Scheme and not the 1987 Scheme. (ii) Limit for commencement of production : In order to become entitled to incentives or the full period as detailed in paragraph 4 of this Scheme, the date of commencement of production for the first time (in respect of new factories) and the date of commencement of production at the expanded capacity (in respect of expansion projects) shall be within a period of 39 months may be granted by the Government in exceptional circumstances based on the merits of individual cases. (iii) Sliding Scale of Incentives:- In the event delay in the ate said commencement production beyond the stipulated period of 39 months from the date of letter of intent or licence whichever is earlier, the grant o incentives would be regulated on a sliding scale in accordance with this Directorate's cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0." 6] Under clause 8 of the said scheme, the new sugar factories and expansion projects which are eligible for incentive under the said scheme, are under obligation to furnish to the Directorate of Sugar, Krishi Bhavan, New Delhi, on completion of their projects all the relevant information and documents in such forms/annexures as may be prescribed by the Government, for verification of their entitlements. 7] It is the case of the appellant that the said sugar incentive scheme was commenced by the Government of India in terms of provisions of section 3 of the Essential Commodities Act, 1955 with an object to encourage indigenous sugar production and to achieve the target envisaged, whereby the said incentives under the said scheme was partly based on higher percentage of free sale sugar quota and partly on excise duty concession/exemptions pursuant to the provisions of section 5-A of the said Act read with Rule 8(2) of the Central Excise Rules, 1944 by issuance of notifications dated 27th April, 1983 to enable the new sugar factories to repay the advances and loans out of the additional funds generated out the benefits of those sugar incentive scheme. 8] During the period betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the learned Collector of the Central Excise and Customs, the appellant herein filed an appeal under section 35-B of the said Act before the Customs, Excise, Gold (Control) Appellate Tribunal (West Region Bench) Bombay. 13] By an order dated 27th October, 2005, the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai (hereinafter referred to "the said Tribunal") dismissed the said appeal filed by the appellant. Being aggrieved by the said order passed by the said Tribunal, the appellant has preferred this appeal under section 35-G of the said Act. 14] Mr. R.M. Sharma, learned counsel for the appellant, invited our attention to the notification dated 4th November, 1987, issued by the Government of India, Ministry of Food and Civil Supplies (Department of Food), which is relied upon by the appellant for the purpose of availing of excise duty concession and would submit that the appellant having established a new factory was entitled to avail of the excise duty concession referred to in Clause 2A(v). He submits that the appellant was thus entitled to retain the difference in excise duty as between levy and free sale sugar and was only liable to pay the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... industry based on the said notification dated 4th November, 1987 and thus the respondent was estopped from taking away such benefit granted under the said notification. In support of this submission, the learned counsel for the appellant placed reliance on the judgment of Andhra Pradesh High Court in case of Cuddapah Cooperative Sugars Ltd. v. Union of India & others (1988 (38) E.L.T., 257 (A.P.) and in particular paragraph nos.10 to 12. He submits that the said notification granting concession in payment of excise duty was issued in 1987 whereas Section 11-D was introduced in the Central Excise and Salt Act, 1944, for the first time in the year 1991. The appellant had already spent substantial amount in establishing its new factory and thus no effect to Section 11-D could have been given by the Central Government to such assessees who had already set up industries based on the notification issued by the Central Government under the provisions of the Essential Commodities Act, 1955. 19] The learned counsel for the appellant placed reliance on the judgment of the Supreme Court in the case of Mahabir Vegetable Oils Pvt. Ltd. & another v. State of Haryana & others (2006 (3) SCC 620) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue had denied the benefit of such exemption and such notification to the assessee. After considering such situation in hand, the Supreme Court granted benefit of such notification to the assessee. He submits that the facts before the Supreme Court in the said judgment in case of Belapur Sugar and Allied Industries Ltd. (supra) are totally different and are clearly distinguishable. 23] Insofar as judgment of the Supreme Court in case of Mahabir Vegetable Oils Pvt. Ltd. & another (supra), relied upon by the learned counsel for the appellant is concerned, he submits that the issue of alleged promissory estoppel raised by the appellant in this appeal could not have been adjudicated by the Collector of Central Excise and Customs. He submits that the appellant did not file any proceedings for enforcement of the said notification dated 4th November, 1987, issued by the Government of India, Ministry of Food and Civil Supplies. 24] The learned counsel for the Revenue submits that the appellant recovered excise duty at the rate of ₹ 85/- per quintal, however, had admittedly paid excise duty at the rate of ₹ 52/- per quintal. The appellant, however, has only shown collection of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he authority that the appellant had collected the excise duty at the rate of ₹ 85/- per quintal and had paid at the rate of ₹ 52/- per quintal to the Government and thus the differential amount of ₹ 33/- per quintal was liable to be deposited by the appellant with the authority. The said show cause notices also indicate that the appellant was directed to produce at the time of showing cause all the evidence upon which it had intended to rely in support of its defence and also to indicate whether the appellant wanted to be heard in person before tis case was adjudicated upon. 29] A perusal of one of the replies, which was identical to all the show cause notices issued by the authority and filed by the appellant, indicates that the appellant had placed reliance upon the notification dated 4th November, 1987, issued by the Government of India, Ministry of Food and Civil Supplies, in its reply. In the said reply, it was alleged by the appellant that the appellant had not charged to its customers at the rate of basic ₹ 34/- plus additional ₹ 37/- and cess of ₹ 14/-, totaling to ₹ 85/- per quintal and had deposited ₹ 52/- per quintal with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il, 1983, to additional excise duty, which was equal to the levy sugar. It is held that both the notifications issued under Rule 8(1) of the Central Excise Rules, 1944, and amended from time to time, did not authorize any sugar manufacturer to collect more amount representing duty of excise as well as retention thereof, but allowed to clear the sugar bags covered under additional entitlement under the incentive scheme at the concessional rates prescribed in the notifications. 33] In the said impugned order, the learned Collector of Central Excise and Customs also held that the said incentive scheme dated 4th November, 1987 was without the support of any statutory provision of the Act of the Parliament making specific provisions for such collection and retention thereof. It was not mentioned in the said notification that the same was issued u/s 3 of the Essential Commodities Act, 1955, as claimed by the assessees. It is held by the learned Collector of Central Excise and Customs that Section 3 of the Essential Commodities Act, 1955, did not permit recovery and retention of duties and taxes in excess of the limits prescribed under the provisions of relevant statutory enactments incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant had retained the differential amount collected by them in accordance with the sugar incentive scheme dated 4th November, 1987 and has not deposited the entire amount with the Revenue. The said Tribunal has followed the principles laid down by the Supreme Court in the case of Kisan Sahkari Chini Mills Ltd. (supra) and has rejected the appeal filed by the appellant. 37] A perusal of the appeal memo filed by the appellant in this appeal indicates that no ground is raised by the appellant contending that though the appellant had produced the relevant documents to show that the appellant had not retained any amount out of the amount recovered as duty from its customers including the rebate, the Collector of Central Excise and Customs as well as the said Tribunal have not considered such documents. In our view, the Collector of Central Excise and Customs has, after granting sufficient opportunity to the appellant, dealt with all the issues and fact as well as law and has rightly upheld the demand raised in the show cause notices issued by the authority. 38] A perusal of the record indicates that no such record was produced by the appellant though in the show cause notices i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant had acted upon the said incentive scheme detrimental to its interest and the said section was in breach of promissory estoppel is concerned, in our view, such issue could not have been raised before the Collector of Central Excise and Customs by the appellant. The appellant did not file any proceedings for enforcement of the said incentive scheme before any Court of law. Be that as it may, in our view, the learned Collector of Central Excise and Customs has rightly held that no such incentive scheme, which was in the nature of executive instructions had in any event was subject to further notification to be issued by the Government could be given effect to while considering the provisions of Section 11-D of the Central Excise and Customs Act. 42] In our view, even otherwise in view of the non obstante clause provided in Section 11-D of the Central Excise and Salt Act, 1944, which was introduced later in point of time, the said provision will prevail over the provisions of the Essential Commodities Act, 1955, having similar non obstante provision in Section 6. 43] So far as the judgment of the Supreme Court in case of Belapur Sugar & Allied Industries Ltd. (supra) relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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