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TMI Blog1994 (8) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... es in 1975, the value of these products of the petitioner which, he has been captively consuming, was done under Rule 6(b)(ii) of the said Rules. As required under the rules the petitioner submitted a list in the prescribed form before the proper officer for approval and the proper officer determined the rate of duty leviable on the petitioner's products under the Act. Petitioner in this behalf has stated as follows : "I state that 104 EP PVC resin is captively used by the petitioner for manufacture of rigid PVC pipes. The procedure prescribed under the Act and Rules have always been strictly complied with in respect of filing of classification list, price list and determination of value. The petitioner, at the instance of the Central Excise Department was determining the value under Rule 6(b)(ii) of the Central Excise Valuation Rules since 1975 onwards and the price list submitted under Rule 174(C) had been approved by the 2nd respondent from 1975 to 1980 after examining all the relevant facts and details. There has been no suppression of any kind". "Price list for 104EP was filed on the same basis even after 1980 and the 2nd respondent had accorded provisional approval of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issued another show-cause notice bearing No. 49 dated 28-6-1984 stating that the petitioner had filed three final price lists in respect of captively consumed resins viz., 104EP, 106M and 438 grade resins for the years 1980-81, 1981-82 and 1982-83 furnishing the relevant year's cost of production and manufacturing profits for each grade of resin and that the same had been taken on the second respondent's file and that necessary final approval had been granted under Rule 6(b)(ii) of the Central Excise Valuation Rules, 1975. Under this show cause notice, the petitioner was required to show cause to the second respondent as to why for determining the value under Rule 6(b)(ii) of the Rules, the relevant year's cost of production and gross profit should not be taken into account and the differential duty payable as a result of such determination should not be demanded under Section 11A of the Act. 5.Petitioner, however, has replied to the said notice explaining the difference between the different types of resin and gave details therefor. It has, however, been served with a letter dated 20-3-1985 from the second respondent raising fresh allegations in connection with the show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inally and has been left open for a reconsideration of the whole matter unaffected by any action taken under other provisions of the Act and Rules framed thereunder. 8.Competing contentions thus on behalf of the petitioner and the respondents respectively give rise to the question whether Section 11A is a provision under which the competent authority can call upon any assessee to make good the alleged loss of revenue on the ground of not levied or short levied or not paid or short paid and demand from the assessee payments thereof on such determinations which conflicted with the determination as to the value of the goods as well as the rate and the price thereof. 9.In Advani Oerlikon Ltd. v. Assistant Collector of Central Excise [1993 (63) E.L.T. 427 (Mad.)], I have considered along with Arumugham, J. how when Modvat credit is claimed, Section 11A of the Act is used and observed after quoting Section 11A as follows : "It says clearly that when any duty of excise has not been levied or has been short-levied, when any duty of excise has not been paid or has been short-paid, or when any duty of excise has been erroneously refunded, a Central Excise Officer may, within six months ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit, should not be recovered from them, before issuing a written demand, as contemplated under sub-rule (2) thereof". "We are thus of the opinion that notwithstanding the rule, which did not contemplate any notice or any period of limitation for the demand, the rule of limitation as found in Section 11A of the Act, has still to be applied to the case of the petitioners. We have come to this conclusion following the rule of strict construction of a taxing statute. It is said in Maxwell on the Interpretation of Statutes 10th Edition, page 284, "The tendency of modern decisions, upon the whole, is to narrow down materially the difference between what is called a strict and beneficial construction". No doubt one has to look merely on what is clearly said in a taxing statute. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing has to be read in, nothing has to be implied, one can only look fairly at the language used. (See Cape Brandy Syndicate v. I.R.C. (1921) 1 K.B. 64). Even so the fundamental rule of construction is the same for all statutes, whether fiscal or otherwise. To arrive at the real meaning, it is alway ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the situations of this kind, in our opinion, apart from what is stated in Sec. 11A, shall be hit by the principle of audi alteram partem, one of the three well recognised rules of the principles of natural justice." 10.We were not concerned in that case with the application of Rule 173-B of the Central Excise Rules, 1944 and the order passed by the Collector under the Act approving the classification of the price list. Section 3 of the Act, which is the charging provision states that there shall be levied and collected in such manner as may be prescribed duties of excise excisable on all goods other than salt which are produced or manufactured in India ......... The manner how the duty shall be levied and collected is prescribed under the Central Excise Rules, 1944, which rules have contemplated for removal of excisable goods on determination of duty by producers, manufacturers or private warehouse licencees under Chapter VII-A thereof. Rule 173-A states that the provisions of this Chapter (VII-A) shall apply to such excisable goods as the Central Government may, by notification in the Official Gazette, specify in this behalf and "where there is a conflict between the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of assessment of duty thereon; or (iii) where an assessee has produced all the necessary documents and furnished full information for the assessment of duty, but he deems it necessary to make further inquiry (including the inquiry to satisfy himself about the due observance of the condition imposed in respect of the goods after the removal) for assessing the duty. These rules as such disclosed; (i) the assessee is required to file with the proper officer for approval a list in the prescribed proforma giving description of the excisable goods produced/manufactured by him, etc. and the rate of duty leviable on each of such goods and the proper officer is required to approve the same after such inquiry as he deems fit. The goods shall be cleared only after the approval of the list by the proper officer; the proper officer, however, can allow the assessee to avail himself of the provisional assessment to duty under Rule 9B. In case there is likelihood of delay in according the approval, in case there is a dispute as to the rate of duty approved by the proper officer, the assessee is given the option to pay the duty under protest. Rule 9B has to be read in such a way that it d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of different Collectors of Central Excise or Assistant Collectors of Central Excise or (vi) submits a fresh price-list or an amendment of the price list already filed with the proper officer and which has the effect of lowering the existing value of the goods. Sub-rule (3) gives to the proper officer power to approve the price-list after making such modifications as he may consider necessary so as to bring the value shown in the said price-list to the correct value for the purpose of assessment as provided in Sec. 4 of the Act and sub-rule (4) says that in case of assessees other than those specified in sub-rule (2), the duty payable on the goods shall be determined by the assessee himself on the basis of the price-list filed by him, subject to the provisions of sub-rule (6). Sub-rule (6) says that "in respect of assessees other than those specified in sub-rule (2), the assessment of the monthly return filed by such assessee under sub-rule (3) of Rule 173G may be made by the proper office without the need for conveying specific approval to the price-list filed by the assessee. In case the proper officer is of the opinion that on account of any enquiry to be made in the matter or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise Officer would be empowered to issue show cause notice and call upon the assessee to show cause as to why the amount specified in the notice be not recovered from him. In the instant case, short payment of excise duty has been proved. In fact it is not even urged that there was no short payment of excise duty. Once this condition is satisfied, the provisions of Section 11A of the Act can be invoked. If there is no fraud, collusion or any wilful misstatement or suppression of facts or contravention of any of the provisions of the Act, the notice may be issued within a period of six months from the relevant date. In case of fraud, collusion or wilful misstatement or suppression , it could be issued within a period of five years from the relevant date. The approval of the price list may be a quasi-judicial function. But that fact does not debar the department from invoking the provisions of Section 11A of the Act. Section 11A of the Act empowers the Excise officer to reopen the assessment in cases where duty may be short levied, short paid, not levied, not paid or erroneously refunded. If the contention of the learned counsel for the petitioner is accepted that the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which pertain to approval of classifications and Rule 173C which pertain to approval of price list. The only distinction sought to be made out is that in the provisions of Rule 173C the assessee is required to be heard by the department if the price list is to be modified or changed. This is no distinction at all because in all actions or decisions that may be taken by the department and which are likely to adversely affect the assessee, the department would be required to afford an opportunity of being heard to the assessee unless there is an express provision dispensing with the applicability of the principles of natural justice. Thus the decision of the Supreme Court in the case of Tata Iron Steel Co. Ltd., 1988 (35) E.L.T 605 (S.C.) (supra) which pertains to classification would also apply to the case of reopening of assessment as provided under Section 11A which has its roots in price list". (para 26) "It was contended that the Collector could not have invoked the proviso to Section 11A of the Act in as much as there was no fraud or suppression. The contention cannot be accepted. In the instant case, there is, to say the least, well designed misstatement of facts and supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subsequent period the classification list was accepted and approved on this basis by the Assistant Collector, Central Excise, MOD-II. So, the question is whether a show cause notice can at all be issued to re-open this question with respect to the same period". (para 5) and as a principle of law concluded as follows : "It was contended by the learned counsel for the respondent and also stated in the affidavit in reply that the approval was given provisionally by the Assistant Collector, Central Excise, MOD-IV. We think that this position is not tenable. The approval had already been given by the Assistant Collector, Mod-II and it was not stated therein that this was provisional. It may be mentioned here also that a provisional assessment is done under Rule 9B which is a different procedure from an approval under Rule 173B. According to Rule 173B, the assessee has to file for approval before the proper officer, a list contained in a particular form in accordance with the rule, and that officer may make enquiry and then approve the list. All this has been done earlier by one Assistant Collector and for an earlier period the Assistant Collector had approved only two of the it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of excise duty. He accordingly fulfilled all the conditions of duty in respect of the goods manufactured by him and availed the exemption in respect of the unmachined iron castings. The Superintendent of Central Excise, however, insisted that the assessee must submit the classification list afresh and if it was not agreeable to the rate, pay the duty under protest. The assessee moved the Court and under orders of the Court was allowed to clear the goods till appropriate orders were passed by the third respondent, i.e., the Superintendent of Central Excise. Rejecting the assessee's objections, the Superintendent classified the goods as under the heading or sub-heading of Chapters 84, 85, 86, 87 of the Tariff Act. The assessee moved the Court once again. The Court, however, permitted the assessee to withdraw the petition in order to enable it to prefer an appeal and directed the respondents in the petition to allow it a period of ten days from that date to clear the goods on the basis of the earlier approved classification list and directed the assessee to keep accounts of goods. The assessee preferred an appeal before the Collector of Central Excise (Appeals). The Collector allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .L.T. 516 (Pat.)] (supra) which appear to conflict with each other, in my view, on the facts that were before the courts respectively, are correctly decided. I have dilated into the issue by referring to the relevant rules exhaustively only to clarify that provisional assessment of the goods under Rule 9B as contemplated for clearance before the list is approved under Rule 173B of the Rules in the circumstances as stated in sub-rule (2A) thereof. In the matter of approval of the price list under Rule 173C, duty is paid before clearance by the assessee on approval of the price list filed by it by the proper officer in the case falling under sub-rule (2) thereof; otherwise on his own assessment as contemplated under sub-rule (b) thereof. When the various sub-rules of Rule 173C are read together it is not possible to miss the mention in sub-rule (3) thereof, the words, "on receipt of price list under sub-rule (2), the proper officer may approve the price-list .................. He shall, thereafter return one copy of the list approved by him to the assessee who shall, unless otherwise directed by the proper officer, determine the duty payable on the goods intended to be removed in acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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