1996 (12) TMI 83 - SC - Central Excise

Supreme Court Upholds Duty Levy, Circular Enforceable

The Supreme Court dismissed the appeal regarding short levy of duty on rectified spirit used in manufacturing medicinal and toilet preparations. The High ... Applicability of Rule 11 of the Medicinal and Toilet Preparation (Excise Duties) Rules, 1956 - Levy of duty under the Bihar and Orissa Excise Act, 1950 - Estoppel arising from prior High Court order regarding retrospective application of administrative circularApplicability of Rule 11 of the Medicinal and Toilet Preparation (Excise Duties) Rules, 1956 - Levy of duty under the Bihar and Orissa Excise Act, 1950 - Whether Rule 11 of the Medicinal and Toilet Preparation (Excise Duties) Rules, 1956 barred the Superintendent's notice demanding duty on rectified spirit consumed during the period 2nd December, 1974 to 5th March, 1975. - HELD THAT: - The Court held that the duty on rectified spirit is leviable under the Bihar and Orissa Excise Act, 1950 and not under the Medicinal and Toilet Preparations (Excise Duty) Act, 1955; consequently the recovery provisions contained in Rule 11 of the Medicinal and Toilet Preparation (Excise Duties) Rules, 1956 do not apply to duty exigible under the Bihar and Orissa Excise Act. As Rule 11 was therefore inapplicable, the Superintendent's notice could not be treated as barred by that Rule. [Paras 3]Rule 11 of the Medicinal and Toilet Preparation (Excise Duties) Rules, 1956 is not applicable to duty on rectified spirit charged under the Bihar and Orissa Excise Act, 1950; the notice was not barred by that Rule.Estoppel arising from prior High Court order regarding retrospective application of administrative circular - Whether the appellants were estopped from challenging the notice on the ground that the earlier High Court order had held retrospective enforcement of the Excise Commissioner's circular not collectable and provided for issuance of a revised demand. - HELD THAT: - The Court noted that the High Court had dismissed the challenge to the circular insofar as it applied prospectively and held retrospective liability not collectable while permitting, where appropriate, a revised demand for liabilities arising after the circular. The respondents asserted in their counter that the notice dated 16th January, 1978 was such a revised demand; the appellants' rejoinder did not dispute that assertion. Given those circumstances, the plea of estoppel based on the High Court's ruling was rejected. [Paras 4, 5]The appellants are not entitled to succeed on an estoppel plea arising from the prior High Court order; the challenge to the notice as a revised demand was rejected.Final Conclusion: The appeal is dismissed; no order as to costs. The Supreme Court dismissed the appeal regarding short levy of duty on rectified spirit used in manufacturing medicinal and toilet preparations. The High Court judgment was upheld, stating that the notice for duty payment fell within the six-month recovery period. The circular on duty levy was found to be enforceable prospectively, and the appellants were estopped from challenging the revised demand notice. The appeal was dismissed with no costs.