Statutory limitation and notice requirements govern duty recovery on warehoused goods despite recovery under the Rules.

Duty recovery on warehoused goods for excess storage loss was treated as subject to Section 11A of the Central Excises & Salt Act, 1944, even where recovery was sought under Rule 160 of the Central Excise Rules, 1944. The Act prevailed over the Rules, so the limitation period under Section 11A applied and was linked to the filing of the return under Rule 173-G through the statutory definition of "relevant date". Section 11A also required notice to the person chargeable with duty before recovery of any short levy. On that basis, a demand raised without notice was unsustainable and barred by limitation.

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Issues: Whether the demand of duty on warehoused goods for excess storage loss was governed by Section 11A of the Central Excises & Salt Act, 1944, so as to require notice and be subject to limitation, notwithstanding Rule 160 of the Central Excise Rules, 1944.

Analysis: The return filed under Rule 173-G of the Central Excise Rules, 1944 furnished the relevant facts, and the statutory definition of "relevant date" under Section 11A took account of the filing of the return. The Act prevails over the Rules, and therefore the period of limitation prescribed by Section 11A applied even to recovery of duty under Rule 160. Section 11A also required issuance of notice to the person chargeable with duty before recovery of any short levy.

Conclusion: The demand was barred by the applicable statutory procedure and limitation, and the order levying duty without notice was not sustainable. The appeal succeeded in favour of the assessee.

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