9911796707
TMI Blog1969 (9) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... ision Bench of court dated 1/2 July, 1965 in Appeal No. 69 of 1963 we are about to accept the company's contentions that those notices of demands were beyond the period of limitation prescribed by Rule 10A, we have prevented the company from arguing all other contentions made in the petition. For the very same reasons we do not find it necessary to relate all facts mentioned in the pleadings of the parties in this judgment. The facts which require to be noticed are as follows :- Prior to April 1, 1961 duty of excise was not levied under the Central Excises and Salt Act on "synthetic organic dye-stuffs and synthetic organic derivatives used in any dyeing process". By the Finance Act of 1961, the Schedule to the above Act was amended to include entry 14(D) and on the goods of the description mentioned above, basic and special excise duties were levied respectively at the rates 16 ad valorem and 10% of the basic duty chargeable. 3. Prior to April 1, 1961, the company appears to have become Owners of Naphthol ASBS, Naphthol AS, Naphthol ASG, Naphtol ASD, Base Red KB, Vat Brown BR. Vat Olive Green B. Svm. Indigo, Base Red B, Bordo GP Base and Base Red GG which were all synthetic orga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Rs. 41,152.25 under Rule 10A of the Central Excise Rules as duty on the processed dyes cleared by the company under exemption of duty as per the notification dated November 23, 1961. The case of the Department appears to have been that these processed dyes were not entitled to exemption under the notification dated November 23, 1961. A statement of details as regards the above sum of Rs. 41,152.25 was forwarded to the Company. This statement contains particulars about the basic dyes and the dates of their clearance from the Company's godowns for manufacturing of processed dyes and the particulars of the processed dyes produced and the dates of clearance thereof from the Company's godowns for marketing thereof to the public as also the quantities and values of each item cleared and the basic and special duty in respect of each of such items. These particulars show that the processed dyes in respect whereof the above sum of Rs. 41,152.25 was claimed as excise duty, were cleared from the Company's godown on different dates between April 22, 1963 and December 16, 1964. The Petitioner contends that under Rule 10A of Excise Rules in respect of duty short levied, notice of demand under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch. 9. Before mentioning the findings of the Division Bench and the contention made on behalf of the Respondents it is necessary to quote here the Rule s 10 and 10A on which reliance has been placed by either side. "10. Recovery of duties or charges short levied, or erroneously refunded. - When duties or charges have been short levied through inadvertence, error, collusion or mis-construction 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 …. the person chargeable with the duty or charge, so short-levied …… shall pay the deficiency …….. on written demand by the proper officer being made within three months from the date on which the duty…... was paid or adjusted in the owners account-current, if any....." "10A. Residuary powers for the 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 duty has for any reason been short-levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, such duty, deficiency in duty or sum shall on a written demand made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the amount actually paid and the amount correctly leviable but also the entire amount correctly leviable in ease where no amount at all had been paid. "Deficiency" meant the amount of short-fall which could be even the entire amount of duty leviable in case where no payment at all had been made. It was held that there was no reason why Rule 10 did not apply in cases of short-levy only but not in cases of non-levy. The finding of the Court was that Rule 10 applied when duty was short levied due either to certain factors relating to the owner or due to certain other factors relating to the officer. The factors relating to the owner are mis-statement as to quantity, description or value of the goods (including claim for total exemption from duty). On the above findings the appeal was dismissed and the Petitioners succeeded. 11. Now, in the present case, the contention of the Company is that since the processed dyes admittedly were cleared from the Company's godown in the case of the first impugned notice between April 1963 and December 1964 the period of three months as prescribed by Rule 10 must be held to have expired in respect of each of the items cleared within three months fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment was put up before him and taking a lenient view of the matter, we have decided not to have any contempt notice served on him. Needless to state that all the officers in all the departments must stand warned that in the event of their refusal to follow findings made on question of law by this Court, a very strict view will be taken by the Court and necessary steps will be also taken. 14. Mr. Paranjpe for the Respondents contends that in the finding of the Division Bench it has not been decided that if any goods escaped excise duty by reason of mistake of law, Rule 10A will not be applicable and the provisions in Rule 10 will cover the same. His contention was that though excise duty was not chargeable in respect of the basic synthetic organic dyes which were of the ownership of the Company from a date prior to April 1, 1961, the same had been recovered under mistake of law. That was not an error or inadvertence as mentioned in Rule 10 and, therefore, the impugned notices of demand could legally be issued under Rule 10A. It is sufficient to state that this argument proceeds from failure to appreciate the ratio of the decision of the Division Bench of this Court in the judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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