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TMI Blog1982 (12) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... dia by its judgment dated 4-11-1974, held that duty leviable was Rs. 4.30 per gross of matches of 50 boxes and hence called upon the plaintiff to pay the differential duty of Rs. 33,152.62. The Superintendent of Central Excise, Dharmapuri, threatened the plaintiff with preventing the clearance of matches unless and until the differential duty was paid. Subsequently the plaintiff paid the 1/3rd of the amount of differential duty viz. Rs. 11839.20 under protest. The plaintiff contended that the whole demand was time-barred under the provisions of the Central Excises and Salt Act, hereinafter referred to as the Act, but the same was not heeded to by the authorities. The plaintiff's case was that where there is any short-levy or non-payment of duty Rule 9, Rules 10 and 10A of the Central Excise Rules, 1944, provided for the collection of such duties. Rule 10A has been struck down as invalid by the High Court of Madras. Hence Rule 10 governs the case of non-payment of short-levy and the demand can be made only in respect of the period within three months before the date of demand. Under the law, the authorities have no power to collect any duty beyond the period of three months prior to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . After the decision of the High Court of Madras and in order to avoid contempt of court but nevertheless subject to the result of the appeal in the Supreme Court the department resorted to assess the plaintiff at the lower rate and not that it had given up its right of collection of differential duty. There is no question of time-limit in the matter of collection of duty. The claim is not barred by limitation. It is not correct to say that the collection in the above case is devoid of authority of law. The decision rendered in W.P. 4145 of 1975 is not applicable to the facts of this case. It is incorrect to say that Rule 11 does not apply to the facts of this case. Hence the third defendant prayed for the dismissal of the suit. 3. The written statement filed by the third defendant was adopted by the defendants 1 and 2. 4. The respondents (plaintiff) filed a reply statement asserting the plaint allegations and contending that the payments made by the plaintiff are not voluntary. The plaintiff protested against collection but the defendants refused permission for the removal of matches unless and until the excise duty was paid, Rule 11 will apply only to cases of payment through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this appeal certain facts pertaining to the case will have to be stated. The plaintiff who is the manufacturer and dealer in matches at Dharmapuri was allowed a concessional rate of duty at the rate of Rs. 3.75 per gross of matches of 50 boxes from 22-7-1967 to 31-12-1974, as per Notification No. 162/1967, dated 21-7-1967. The said notification was subsequently amended by Notification No. 205 of 1967, dated 4-9-1967 which introduced certain conditions for concessional amount of duty at the rate of Rs. 3.75 per gross. The plaintiff (respondent) did not satisfy the conditions as per the amended Notification No. 205 of 1967. Hence the rate of duty payable by the plaintiff is Rs. 4.30 per gross. The amended Notification No. 205 of 1967, dated 4-9-1967, was challenged before this Court and this court struck down the provisos introduced by the amended Notification No. 205 of 1967. In view of the judgment of this court the plaintiff was charged with a duty at Rs. 3.75 per gross. On appeal by the Revenue the Supreme Court set aside the judgment of this Court on 4-11-1974, holding that the amended Notification No. 205 of 1967 is valid. In view of the decision of the Supreme Court a notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer of matches. Since excise duty is payable before the goods are removed from the factory and once the goods are cleared and they go outside the factory, the only way under which the department can recover the short-levy or the escaped duty is by resorting to Rule 10. That Rule specifically provided that action could be taken only within three months from the date on which the duty or charge was paid or adjusted which according to the decision of the Supreme Court in N.B. Sanjana v. E.S. and W. Mills, AIR 1971 S.C. 2039 = 1978 (2) E.L.T. (J 399) could be within three months from the date on which the duty ought to have been paid or adjusted. Under the Act, the duty ought to have been paid before the goods are removed from the factory and therefore, the date of removal is unalterably fixed and the date of delivery cannot be shifted on any account. In view of this decision the claim of the Revenue for the escaped assessment in this case which is beyond three months from the date of the removal of the goods is clearly time-barred. Hence the finding of the lower court that the notice of demand as per Ex. A1 is illegal will have to be upheld as per the decision of a Bench of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a tax is paid without protest it is a voluntary payment and therefore cannot be recovered, but with all due respect to the Judges who so held we are of opinion that that enunciates the law too broadly. Whether a payment is voluntary or not is a question of fact and a number of circumstances have to be taken into account. Here it is admitted by the plaintiffs that they received no written notice or demand, nor was there any attachment of their property, nor were any coercive processes levied against either of them or their property. All that happened was that the Bill Collector came and demanded the money and the plaintiffs paid. But though the plaintiffs paid without any formal proceedings taken out it cannot be forgotten that the municipal Committee had the sanction of the law behind it. It was not necessary for it to express any open threat to enforce these sanctions because every one knows, or at any rate every body must be deemed to know that that is what happens when a tax is not paid. Therefore when a demand is made for a tax, whether in writing or orally the person from whom the tax is being recovered is entitled to assume that if he does not pay unpleasant consequence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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