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TMI Blog1985 (12) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... 13-6-1975. 2. On 3-4-1978, the third respondent issued a show cause notice to the petitioners why a sum of Rs. 9,14,370.39, out of Rs. 33,79,904.40 Ps. should not be recovered or readjusted in its personal ledger account in accordance with the Trade Notice No. 95/1975 issued by the Collector of Central Excise, Bangalore. The ground on which the said sum was sought to be readjusted in the running account of the petitioner-company was that the petitioner had availed of the concessional rate of duty in respect of 21,264.274 quintals of sugar which was exported by the Company during the relevant period and further that the sugar exported was exempt from the whole of the duty by the Central Government and that therefore the petitioner was not entitled to the rebate on the very same sugar exported. 3. This show cause notice was issued applying the Notification No. 197/62, dated 17-11-1962 by the Government of India in exercise of its powers conferred by Rule 12 of the Central Excise Rules exempting export sugar from duty. The said notification reads as follows :- "(I) Procedure for grant of rebate of the excise duty paid on excisable goods and exported out of India : In exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for revoking or adjusting the concessional duty which the petitioner had availed of as per Notification 152/74. He, therefore, directed a sum of Rs. 9,14,370.39 to be debited to the Personal Ledger Account of the petitioner. 6. The petitioner has explained in the writ petition that no appeal was filed against the order of the Asst. Collector since the department was bound to follow the Notification 197/62 issued by the Government of India, and hence, it has approached this Court for necessary relief. 7. It is argued by Sri Tilak Hegde that the proforma credit admissible under Notification 152/74 was granted by the Government on 11-6-1975 and the same was credited in the accounts of the petitioner-company on 13-6-1975 and that therefore, the show cause notice issued to withdraw the exemption to the extent indicated in the show cause notice dated 3-4-78 is clearly barred by time. It is further urged, that while giving effect to the Notification 152/74, it is not open to the department to press into service the notification issued under Rule 12 and to withdraw the concessional duty granted as per notification issued under Rule 8(1). 8. It is contended by Sri Shivashankar Bhat o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal of the Rule 132A (2) and (4) was challenged in the said case. It was held that the prosecution launched after the omission of the rule was illegal. It was also further observed that the amendment rules saved action already taken while Rule 132A(2) was in force. The question was whether the action initiated after the rule was omitted, could be justified in law ? On this interpretation the complaint made for the offence under R. 132A (4) of the Defence of India Rules after 1-4-1965 when Rule 132A (2) was omitted, was held invalid. (ii) In Shakthi Sugar Mills and other connected cases, the demand was made more than one year after the amounts were credited in the petitioner's account. The demand made to pay the short-duty after one year from the date of the crediting of the accounts, was resisted by the petitioners on the ground of limitation. Dealing with the question of limitation prescribed by R. 10, His Lordship Justice Varudarajan of the Madras High Court (as he then was), held that demands made by the department beyond one year from the date of crediting the accounts of the petitioners, were barred by limitation. It was the department's case that credit was given err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. The Department realised the mistake that the Notification 152/74 was applied even in respect of export sugar during the relevant period. Therefore, what was sought to be done by the Department was to make an re-computation and readjustment in the running account of the assessee by applying the Notification which exempted the exported sugar from the levy of excise duty. 13. Rule 10 speaks of duty levied or short-levied or erroneously refunded or the duty payable under the Act is not in full and a limitation of six months is provided from the relevant date to call upon the assessee to show cause why action should not be taken under that Rule. 14. Under the proviso (c) to Rule 10, where an erroneous refund had occasioned by reason of omission or mis-direction or suppression of facts by the assessee, an enlarged period of five years is provided for the issue of the show cause notice and to reopen the proceedings. 15. The 'relevant date' for the purpose of this rule means : "(ii) 'relevant date' means- (a) in the case of excisable goods on which duty has not been levied or paid or on which duty has been short-levied or has not been paid in full, the date on which the duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the proposition that whenever there is no assessment at all under the Act, no question of applying limitation arises if the refund is in respect of a duty which was not leviable at all under the Act. 21. The last contention urged on behalf of the respondents is that this is a case of unjust enrichment by the petitioner-company since the petitioner has had the benefit of total exemption in respect of export sugar and also the concessional duty under the notification, Ext. A, in respect of the very quantity of sugar exported. Sri Bhat submits that this Court should not interfere in exercise of its discretionary jurisdiction with the order of the Asst. Collector dated 6-6-1980 and dismiss the Writ Petition. 22. Two notifications that are relevant to be considered in this case are: (i) Notification 152/74 issued under Rule 8(1), and (ii) Notification 197/62 issued under Rule 12. Dealing with the Notification 152/74 first, it may be seen that the Government, in exercise of its powers conferred under Rule 8(1) of the Central Excise Rules, exempted a part of the duty at varying rates leviable on excess sugar in accordance with the Table annexed to the said notification. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of this very sugar, which was exempt from the whole of the duty, was a mistake. Consequently, the proforma credit granted by the Department on applying the Notification 152/74 was sought to be withdrawn. This refund granted in the proforma credit represented the incentive that the petitioner had availed of under Notification 152/74 to which the export sugar was not eligible. 29. The case of the department is that the duty paid on export sugar which was exempt from levy of duty under Rule 12, was a payment made outside the Act. The concessional duty the export sugar suffered under Rule 8 by a wrong application of the Notification 152/74 should be withdrawn and the refund given to the petitioner reversed in the accounts of the company. This submission of the Department has to be accepted on the facts of the case. 30. On a proper interpretation and application of the Notification 197/62 no part of the sugar exported is liable to suffer duty under the Act. 31. On the facts of the present case, the petitioner-company had availed of the rebate on the portion of the excess sugar which was exported. 32. As a result of the enquiry conducted by the Department, it was discovered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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