TaxTMI 
TaxTMI 
TaxTMI 
2009 (8) TMI 664
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....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 1987-88. 4. The controversy involved in the matter is whe....
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....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 courts. The show cause notice has been issued in accordance with law and the pro....
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....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. 99,40,574.55 to head basic excise duty whereas it should have been taken as :- (Rs.) 7781624.61 (Rs.) 2136564.94 (Rs.) 7781624.61 (Rs.) 7846123.61 Entry No....
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....r 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 excise duty, and secondly, whether the orders passed by the excise authorities were provisional or final in nature. Apex Court had no occasion to advert and adjudicate upon the actual quantum of the excise duty. As such, the contention of the petitioner that the rebate claimed by them is on the basis of the order....
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.... 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 convenient distribution of such goods. It provides for proforma credit of duty already paid on materials/components brought for use in the manufacture of specified finished excisable goods. 21. In this regard, paragraph-4 of the show cause notice dated 5-6-92 is very re1 and is reproduced as under "The said M/s. Dhampur Sugar Mills, Ltd., Dha....
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....ny 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 Assistant Collector, Central Excise Moradabad on 18-12-1991 (copy of his statement dated 18-12-1991 already supplied to him) also failed to refer to any specific order relating to the amounts taken credit of showing as alleged to be revised benefits accruing to them on the interpretation of the Hon'ble Supreme Court in their favour. He however, admit....
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....pecific 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 credit in the PLA much prior to that i.e. 24th July, 1991 and 27th July, 1991 in complete disregard to the provisions of statute. Therefore, the petitioner can not take any advantage on this count. This apart, claims were for warded to the Collector of Central Excise, Moradabad on 1-8-91 who was Competent Authority to sanction the rebate. Petitioner had ....
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....said 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 fraud, collusion or any willful misstatement or suppression of facts or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment of duty by such persons or agent, in that event notice can be issued within 5 years from the relevant date. 28. Learned counsel for the petitioner has contended that the petitioner does not ....
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....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 Excise and Customs, Mumbai v. M/s. Bell Granito Ceramic Ltd. 2006 (198) E.L.T. 161 (S.C.) = 2006 AFR SCW 281; Commissioner of Central Excise, Chandigarh v. M/s. Punjab Laminates (P) Ltd. 2006 (202) E.L.T. 578 (S.C.) = 2006 AIR SCW 4848; Collector of 4 Central Excise, Hyderabad v. M/s. Chemphar. and Liniments, Hyderabad 1989 (40) E.L.T. 276 (S.C.) = (1989) 2 SCC 127; M/s. Continental Founda....