9911796707
TMI Blog2000 (9) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... num, which amounted to Rs. 21,94,461.70. The appeal filed by the party against the order of the Assistant Collector was rejected by the Collector (Appeals). Hence the present appeal before the Tribunal. 2.We have carefully examined the records of the case. We find that the show-cause notice is based on two orders of the Supreme Court. While the demand of duty is based on the interim order dated 28-4-1988 passed by the Supreme Court in a batch of Civil Appeals including Civil Appeal No. 430/83 filed by the present appellants, the claim of interest on the alleged dues of Central Excise duty appears to be on the basis of the order dated 11-9-1985 passed by the Apex Court in a batch of writ petitions (including W.P. No. 3625/83 filed by the present appellants). For a proper appreciation of the background of the show-cause notice, we think, it is necessary to glance through the history of the relevant legal proceedings before the Supreme Court and the High Court of Delhi. 3.The present appellants had filed writ petition No. 1269/81 in the Delhi High Court contending that no duty of excise was leviable on yarns captively consumed for manufacture of fabrics and not removed from the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought to be realised by the SCN dated 10-9-1988. 5.In the show-cause notice, Department also sought to levy interest on the dues of duty @ 12% per annum on the basis of order dated 11-9-1985 of the Supreme Court. This order of the Supreme Court was passed while granting stay of demands in the aforesaid W.P. No. 3625/1983 and connected writ petitions of other parties, filed under Article 32 of the Constitution. The Court directed continuation of earlier order of stay of recovery of 50% of the past dues upon condition of bank guarantee being kept alive. The Apex Court, in that order, clarified further that there would be no stay in regard to payment of excise duty for future periods. The court, further, noted that, if the petitioners failed in the writ petitions, they would pay the amount representing 50% of the past dues (in respect of which stay was granted) together with interest thereon @ 12% per annum. It appears, it was this part of the order of the Apex Court that was relied on by the Department for demanding interest on the past dues of Central Excise duty @ 12% per annum. 6.On a careful examination of the orders of the lower authorities and a close perusal of the orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the particular case was not to be taken as binding on the assessees in relation to Departmental claims of interest on past dues of basic duty of excise. The above order of the court was given in a case involving special/additional duties of excise. Ld. Counsel submitted that the claim of interest raised in the show-cause notice, being without the authority of law, was liable to be rejected. In support of this argument, Counsel relied on the decision of the High Court of Andhra Pradesh in the case of Delta Paper Mills Ltd. v CCE, Guntur [1995 (77) E.L.T. 544 (AP)]. 9.Referring to the orders of the lower authorities, ld. Advocate submitted that mere entries or endorsements of duty liability in RT-12 returns was not to be equated with a notice of demand for short-levy, short-payment, non-levy or non-payment of duty as under Section 11A of the CESA. On this ground, he contested the view taken by the lower authorities to the effect that there was a demand of duty against the appellants as reflected by entries in the R.T.12 returns; that the appellants were aware of this position and that they were liable to satisfy such demand of duty even without the requirement of a formal no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order was passed by the Assistant Collector on 21-11-88 regarding finalisation of provisionally approved/assessed R.T-12s and classification lists with the appropriate rates of duties. Entire action taken by the Assistant Collector, Central Excise Division, Ujjain was quite correct in terms of Rule 9B of Central Excise Rules, 1944. Under the circumstances, question of invoking Section 11A does not arise." Ld. DR, therefore, contended that, since Section 11A was not sought to be invoked, there was no question of the demand being time-barred and, therefore, the orders of the Assistant Collector and the Collector (Appeals) should be upheld. Ld. DR also argued that the apex Court's order dated 11-9-1985 was binding on the Departmental authorities in the matter of levy of interest @ 12% p.a. on the duty dues covered by the SCN. He prayed that the appeal be rejected. 11.Ld. Advocate, in his rejoinder, submitted that the case law cited by ld. DR was not relevant to the issues at hand. He also submitted that the cross-objections filed by the Department were not maintainable and, therefore, nothing contained therein could be relied on. 12.We have carefully considered the rival submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is liable to be set aside. 14.The reasoning of the lower authorities that the Department had raised demands of duty from time to time in R.T.12 returns of the party while making provisional assessments thereof and that the show-cause notice in question was issued for enforcing the demands only cannot be accepted. No entry in any R.T.12 return can be a substitute for a demand notice under Section 11A of the Act. The decision of the Hon'ble Supreme Court in the case of Kosan Metal Products Ltd. (supra) 1988 (38) E.L.T. 573 (S.C.) cited by ld. Advocate is quite apposite to this context and the same supports the appellants' arguments on the point. In that case, the court had upheld the Tribunal's order holding that an entry on R.T. 12 for short payment did not amount to demand of duty and a demand had to be made by way of notice under Section 11A of the Act. The court also affirmed the Kerala High Court's decision in Good Shepherd Rubber Company v. Inspector of Central Excise [1978 (2) E.L.T. (J 66)] which was to the effect that Rule 173-I, which enabled the proper officer to assess returns (filed under Rule 173G) for determining the duty liability, was of no avail against a plea tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt though not maintainable as such under Section 35B(4) of the Act, have been considered by us as a record of submissions of the respondents in this appeal. 18.It appears from the cross-objections that the Supreme Court dismissed C.A. No. 430/83 of the appellants as per judgment/order dated 4-1-1989 directing Central Excise authorities to finalise assessments after serving notice on the assessees and considering their responses, etc. No text of the judgment has, however, been made available to us. The respondents have further submitted in their cross-objections as under :- Therefore, after disposal of C.A. 430/83, for the recovery of dues it was unavoidable for the Assistant Collector to make the assessment final. This is what the Assistant Collector had done by issuing SCN dated 10-9-88 and finally passed order on 21-11-88. We are afraid, the above submission is fallacious on its face inasmuch as the Apex Court's final decision in C.A. No. 430/83 was available only subsequent to the issuance of the SCN and even the passing of adjudicatory order by the Assistant Collector. It is also pertinent to note that the Collector (Appeals) too did not take note of the apex Court's d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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