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Issues: Whether the demand raised on stock-taking shortages under Rule 223A was barred by limitation under Section 11A of the Central Excises and Salt Act, 1944.
Analysis: The case concerned shortages noticed during annual stock taking of excisable goods. The Government held that Rule 223A could not be read as excluding the limitation prescribed by Section 11A of the Central Excises and Salt Act, 1944. It adopted the principle that the parent Act overrides the Rules, and that where duty becomes payable on the date of stock taking, that date is the relevant date for computing limitation under Section 11A. On that basis, the six-month period applied to the demand.
Conclusion: The show cause notice was time-barred and the demand could not be sustained.
Final Conclusion: The orders of the lower authorities were set aside on limitation and the revision application was disposed of in favour of the assessee.
Ratio Decidendi: Where duty becomes payable on the date of stock taking under Rule 223A, limitation under Section 11A of the Central Excises and Salt Act, 1944 runs from that date, and the Rules cannot displace the statutory time bar in the Act.
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