TaxTMI 
TaxTMI 
2009 (8) TMI 664
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....ing the respondents to withdraw the attachment order dated 6-7-1992 for the recovery which was issued in consequence to the show cause notice dated 5-6-1992 for the recovery of the amount mentioned in the show cause notice. 2. The background facts essentially in a nutshell are as follows:- The petitioner is a limited company engaged in manufacture and sale of sugar. From time to time, the Central government granted incentive rebate with regard to the central excise duties on the excess sugar provided by the sugar factory during the lean periods of low recovery as well as low supply of the cane. The aforesaid incentives had been granted for maximizing the consumption of sugar cane for production of sugar and also for facilitating the payment of remunerative price to the sugar cane growers and also to make it available to the consumer at reasonable price. The aforesaid incentive has also got the purpose of compensating the sugar factories of the country for wear and tear of their plant and machinery on account of excess production as also for the losses incurred on account of low recovery. 3. The amount claimed as rebate relate to the years 1977-78, 1980-81,1982-83 and 1987-....
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....on of 5 years) be applicable in the case of the petitioner. 8. On the other hand Learned Standing Counsel appearing on behalf of the respondent has contended as follows :- (i) The petitioner company has no statutory power to take credit in the PLA on its own, without any specific executive order by the competent authority. Even when the Court orders in favour of the petitioner, specific executive order is required and the amount to be credited in PLA is to be quantified by the competent authority and petitioner can not make unauthorized entries in the PLA on its own. (ii) The petitioner has failed to specify the order by which they were authorized to take the credit and no scheme and rules authorized the petitioner to take the credit of an amount in PLA on its own. (iii) The petitioner's contention that the incentive rebate scheme is analogous to Rule 56A and 56AA of the Rules, 1944 is misleading as these are altogether different schemes. (iv) Neither the Supreme Court nor this Court or any authority has quantified the amount of rebate admissible to the petitioner and the petitioner has claimed rebate on the basis of its own interpretation of the orders passed by the....
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....Hon'ble Supreme Court. 16,01,371.93 1878 Rebate claim for the year 1982-83 as submitted to the Assistant Collector of Moradabad Division as per interpretation of Hon'ble Supreme Court. 25,19,587.10 1879 Rebate claim for the year 1987-88 as submitted to the Assistant Collector as per interpretation of Hon'ble Supreme Court's order. 48,70,644.84 Total 90,40,574.50 (The balance of Rs. 125.555/- shown against PLA entry No. 1874 raised Rs. 99,66,129.55 showing against entry No. 1879)" (2)(b) They also appeared to have readjusted the credit in respect of Basic Excise Duty and. by debiting the amount of Rs. 77,81,624.61 in basic excise duty and taking simultaneously the credit of the same amount in additional excise duty vide entry No. 1894 dated 27-7-1991 as noted below:- Date & Entry No. Particulars of credit/debit as per Col. No. 2(i) of the PLA. Basic Duty Debit (Col. 3 (ii) of PLA BalanceCol. 3 (iii) of PLA Additional Excise Credit (Col, 4 (i) of PLA BalanceCol. 4 (ii) of PLA 7-7-91 Entry No. 1394 In entry No. 1875 to 1879 dt. 24-7-91 we had wrongly taken credit of Rs. 99,....
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....ssional rights would have been allowed for excess production for certain parties, in same cases. All that is necessary in such cases is to deter mine the entitlements and by deciding the quantities and the amounts to the extent of concessions conferred, by the balance, if any, may be created the present ledger account." (Emphasis supplied) 15. Thus, the aforesaid notification itself provides that the entitlement claimed by the petitioner should be determined by deciding the quantities and the amounts to the extend of concessions conferred, and only then the amount can be credited to the PLA. 16. The bare perusal of paragraph 2-a and 2-b of the impugned notice dated 5-6-1992 goes to show that the order of the Supreme Court has been made the basis for crediting the impugned amount in the PLA. The petitioner has filed the order of the Supreme Court dated 7th May, 1991, 8th January, 1991 and 9th January, 1991. A perusal of the aforesaid orders clearly indicate that the Supreme Court has not determined the quantum of the basic excise duty/additional excise duty to be granted to the petitioner. The controversy raised before the Apex Court related to the entitlement of additional....
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....s the amount of the alleged claims were credited in PLA without any authorization of the Competent Authority as provided under the Act, as such the provisions of the Act and Rules made thereunder were contravened by the petitioner. 20. Much emphasis has been given by the petitioner, that the scheme of rebate is analogous to the provisions of Rule 56A of the Excise Rules 44. We are not all impressed by the submissions of the petitioner. The notification dated 20-11-1963/14-12-1963 does not help the petitioner in any way for the following reasons:- (a) Firstly, as already we have noticed hereinearlier that the petitioner has not appended the detailed procedure as provided in paragraph 3 of the said notification dated 20-11-1963 for granting incentive rebate as excess production of sugar through proforma credit in the PLA. (b) Secondly, paragraph 4 of the said notification itself provides that the entitlement has to be determined. (c) Thirdly, the Rule 56A does not permit the petitioner to take credit in PLA on its own. Rule 56A prescribes procedure for movement of duty paid materials or components for use in the manufacture of finished excisable goods or for more convenie....
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.... of by them on 24-7-1991 as aforesaid related to their claims as revised and submitted in consequences of certain issues decided by the Supreme Court in favour of the appellant including parties other than the factory (viz M/s. Dhampur Sugar Mills Ltd., Dhampur, as referred to in their letter dated 2-12-1991). The party however did not refer to any specific order of the Court/authorizing them to assume the powers of the Statutory Authority and to outright take the credit of the amounts representing their revised claim as stated to have been submitted to the proper officer of Central Excise for necessary sanction in accordance with the provisions of the Central Excise & Salt Act, 1944. They also failed to refer to such a specific order or authority in their letter dated 2-12-1991 ad dressed to the Superintendent Range while referring to the issues decided by the Hon'ble Supreme Court in identical cases (without citing specifically the relevant orders) and not in any case relating to the. specific amount allegedly claimed as revised and taken credit of by them in their PLA as aforesaid. The authorized representative of the aforesaid factory, during the course of enquiries by the Assi....
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....d 56AA of the Central Excise Rules, 1944 just to counter the charge of unauthorized credit. The higher Appellate Court had only upheld the claim of the petitioner qua basic and additional excise duty and it had no occasion to quantify the amount of re bate admissible to them. The petitioner has no statutory power to take credit on its own without any specific executive order by the Competent Authority/Appropriate Authority even in case any benefit had accrued to the petitioner as a consequence of any order of any of the Court, specific executive order is required for taking such benefits under the provisions of law. 23. The next contention of the petitioner is that the claim with regard to the rebate was countersigned by the Superintendent as such he was authorized to take credit in the PLA. This argument of the petitioner is totally misconceived as Superintendent is not the Competent Authority to finalize the rebate/refund claim. It is admitted to the petitioner that the claims of the petitioner were countersigned by the Superintendent on 31st July 1991 and received in the office of Asstt. Collector of Central Excise, Moradabad on 2-8-1991 whereas, the petitioner had taken the ....
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....agent, the pro- visions of this sub-section shall have effect, [ if for the words "Central Excise Officer" the words "Collector of Central Excise", and for the words "six months" the words "five years" were substituted.] Explanation : Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of six months or five years, as the case may be." 26. It is the contention of the petitioner that the show cause notice is time barred since the period of six months is to be calculated as per the first part of the provisions of Section 11A(1) of the Act, since the credit was taken in July, 1991 but the notice was issued to the petitioner on 5-6-1992, which was after the expiry of six months. 27. The contention of the petitioner is totally misconceived. Bare perusal of section 11A (1) of the Act goes to show that it is only when there is no fraud, collusion or any willful misstatement or suppression of facts etc., The limitation for issuing show cause notice is six months, however, when the excise has not been levied or paid or has been short levied or short paid or erroneously refunded by reason of fra....
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....m, apart from rendering themselves liable to a penalty under Rule 9 (2) and 173-Q of Central Excise Rules, 1944, as extended period as provided under the said Rule read with Section 11A of Central Excise & Salt Act, 1944 for the recovery of the amounts as aforesaid shall apply in this case. 7. The said M/s. Dhampur Sugar Mills Ltd., Dhampur, are therefore, hereby required to show cause to the Collector of Central Excise, Meerut, as to why a penalty may not be imposed upon them under rule 9(2) and 173Q of the Central Excise Rules, 1944 and also why the amount of basic/additional excise duty un-unauthorizedly taken credit of in their PLA and debited towards payment of duty on excisable goods removed thereafer, may not be recovered from them under rule 9(2) of Central Excise Rules, 1944." 32. Thus the petitioner without any basis after resorting to misstatement and suppression of facts has taken the credit in PLA and as such contravened the provisions of this Act and the Rules made thereunder with intent to evade payment of duty. 33. The petitioner has also placed reliance upon the following decisions of the Apex Court in support of his contention; Commissioner of Central Exc....