Cess recovery through excise machinery: notified rates prevail until formally amended, and executive instructions cannot override them.

Section 15(4) of the Oil Industry (Development) Act, 1974 permits levy and collection of cess through the Central Excises Act, 1944 machinery, including recovery and exemption provisions, so show-cause notices under Section 11A were legally maintainable. The notified cess rate continued to apply until formally amended, and administrative letters or Ministry directions could not alter that statutory notification. Payment at a reduced rate without amendment was therefore unauthorised in law, and the differential cess remained recoverable. The stated principle is that executive instructions cannot displace a valid notification when a statute prescribes collection through excise machinery.

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Issues: Whether the Central Excise authorities could invoke the provisions of the Central Excises Act, 1944 for levy and recovery of cess on crude oil under the Oil Industry (Development) Act, 1974, and whether payment of cess at a reduced rate pursuant to administrative directions of the Ministry could override the notified rate.

Analysis: Section 15(4) of the Oil Industry (Development) Act, 1974 authorises the levy and collection of cess through the machinery of the Central Excises Act, 1944 and the rules made thereunder, including provisions relating to recovery and exemption. The show-cause notices under Section 11A were therefore legally maintainable. The notified rate of cess remained effective until amended; administrative letters or directions from the Ministry could not alter the statutory notification. Payment at a lower rate without amendment to the notification was unauthorised in law, and the differential amount was recoverable.

Conclusion: The Central Excise authorities were competent to recover the cess under the Central Excises Act, 1944, and the demand for the differential cess was valid. The finding of doubt regarding the legality of the show-cause notices was set aside.

Ratio Decidendi: Where a statute directs that cess be levied and collected through the Central Excise machinery, the notified rate continues to govern until formally amended, and executive instructions cannot displace the notification.

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