TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Supreme Court limits excise duty exemption, sets time limit for excess duty recovery.</h1> <h3>PRAVARA PULP & PAPER MILLS Versus COLLECTOR OF CENTRAL EXCISE</h3> PRAVARA PULP & PAPER MILLS Versus COLLECTOR OF CENTRAL EXCISE - 1997 (96) E.L.T. 497 (SC), 1998 (9) SCC 573, 1998 (9) JT 154 Issues:1. Interpretation of excise duty exemption notification.2. Validity of demand notice and time limit for recovery.3. Definition of 'value' under Section 4(4)(d) of the Central Excises & Salt Act, 1944.4. Impact of retrospective application of the explanation on excise duty calculation.5. Consistency of interpretation with previous court decisions.Interpretation of excise duty exemption notification:The case involved M/s. Pravara Pulp & Paper Mills seeking partial exemption from excise duty under a specific notification. They claimed that since the notification did not mandate passing on the benefit to customers, they were entitled to retain it. However, authorities found that the mills had recovered the full excise duty amount from customers, leading to a demand notice for the excess duty collected. The courts upheld that the mills could only exclude 50% of the duty paid, as per the effective duty of excise, from the value of goods for excise duty calculation.Validity of demand notice and time limit for recovery:A show cause notice was issued to the mills for recovering excess excise duty, which they contested as time-barred. The Assistant Collector confirmed the demand, but the Collector of Central Excise ruled that recovery for the period beyond six months from the notice date was not valid. This decision was upheld by the Central Excise & Gold (Control) Appellate Tribunal, limiting the recoverable amount within the statutory time limit.Definition of 'value' under Section 4(4)(d) of the Act:The judgment referred to Section 4(4)(d) of the Central Excises & Salt Act, 1944, which defines the 'value' of excisable goods. It specifies the components to be considered in determining the value, including the effective duty of excise payable and trade discounts. The courts applied this provision to calculate the excise duty value in the case of M/s. Pravara Pulp & Paper Mills.Impact of retrospective application of the explanation on excise duty calculation:The Finance Act, 1992, inserted an explanation with retrospective effect from 1-10-1975, affecting the exclusion of duty from the value of goods for excise duty calculation. This retrospective application influenced the calculation method in the present case, allowing only 50% of the duty paid to be excluded from the goods' value.Consistency of interpretation with previous court decisions:The judgment referenced decisions from the High Courts of Bombay and Karnataka, which supported the interpretation of excluding only 50% of the paid duty from the value of goods for excise duty calculation. The Supreme Court concurred with these decisions, upholding the order of the Tribunal and dismissing the appeal filed by M/s. Pravara Pulp & Paper Mills.
TaxTMI 