TaxTMI 
TaxTMI 
2013 (8) TMI 225
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.... Supreme Court in Commissioner v. T.V.S. Whirlpool Ltd., 2010 (119) ELT A177 (SC) and of this Court in Kwality Ice Cream Company and Anr. v. UOI and Others, W.P. (C) 14414-15/2006?" 2. The appellant herein is a manufacturer of DDT powder and Malathion TG. During the periods 2001-02, 2002-03, 2003-04 and 2004-05 they had sold DDT 50% WDP and Malathion TG to the Government, Department of Health under National Vector Borne Disease Control Programme (NVBDCP). The appellant calculated the assessable value on the sale price and accordingly duty and education cess was paid at the time of removal. 3. Subsequently, the Ministry of Health and Welfare with retrospective effect revised and enhanced the prices for the supplies made in 2002 to 2005. On the basis of revised enhanced sale price, the petitioner paid differential duty as per details given below:- Supplies made Year Revision of fair price by letter dated Differential duty paid on 2001-02 12.9.2003 14.11.2003 2002-03 10.2.2005 7.3.2005 2003-04 18.10.2006 21.8.2004 2004-05 5.2.2007 30.3.2007 4. The respondent issued two show cause notices both dated 4th September, 2008 for levy of i....
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....the limitation period prescribed under Section 11A(1) of the Act. As noticed below, Section 11A(1) of the Act prescribes period of one year for recovery. This period of one year is for recovery of excise duty, which has not been levied or paid or has been short levied, short paid or erroneously refunded. Section 11A, as it then existed, in the proviso prescribed a longer period of five years where short levy, short payment or erroneous refund was by reason of fraud, collusion, wilful mis-statement, suppression of facts or contravention of any provision of the Act or Rules with the intention to evade payment of duty. Section 11A, therefore, postulated two separate periods of limitation for recovery in cases of short-levy, short payment etc. Normal period was one year but in cases of fraud, collusion, wilful mis-statement, suppression of facts or when there was contravention of the Act or Rules with the intent to evade duty, an enhanced or longer period of five years was provided/stipulated. A Division Bench of Delhi High Court in Kwality Ice Cream Company and Another versus Union of India and Others reported in (2012) 281 ELT 507 has examined a similar contention. In the said case, ....
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....gh that letter was in respect of a demand for differential duty, the demand would still be beyond a period of three years. 6. In view of the fact that we have taken a decision, as indicated above, we are not examining the other point raised by the learned counsel for the petitioner that the duty itself was not payable in view of the decisions of the Supreme Court in respect of its sister concerns in relation to common agreements. However, the learned counsel for the respondents in that regard has submitted that the Commissioner's order dated 12.09.2001 had become final and, therefore, that aspect of the matter ought not to be looked into. In any event, as we have indicated above, since we have decided this writ petition only on the question of limitation, we have not gone into the second aspect of the matter." 7. The aforesaid order makes reference to order of the Supreme Court in Commissioner versus TVS Whirlpool Limited, 2000 (119) ELT A177 (SC). The order passed by the Supreme Court is a short one and records that it is only reasonable that the period of limitation that applies to the claim for the principal amount should also apply to the claim for interest thereon.....
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....of duties not levied or not paid or short-levied or short-paid or erroneously refunded.-(1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, whether or not such non-levy or non-payment, short-levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder, a Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice:- Provided that where any duty of 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 wilful mis-statement 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 ....
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....as held as under:- "From the perusal of the said statutory provision, it can be seen that under sub-section (1) period of limitation for issuing notice for recovery of duty not paid, short paid or erroneously refunded is one year unless, of course, such non-payment, short payment, or erroneous refund of duty arises by the reason of fraud, collusion or wilful misstatement or suppression of facts or contraventions of the provisions of the Act or the Rules with intent to evade payment of duty. In other words, in absence of such circumstances, normal period of limitation for issuance of notice for recovery of unpaid duty is 1 year. 8. Sub-Section (2B) of Section 11A of the Act provides that with respect to such unpaid, short paid or erroneously refunded duty, if the manufacturer pays the sum on the basis of his own ascertainment before issuance of notice by the Central Excise Officer, the Officer, on receipt of such information, shall not serve any notice under sub-section (1) in respect of duty so paid. In other words, upon voluntary payment of duty by the manufacturer, no show cause notice for recovery thereof would be issued to the extent of duty so paid. ....
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....would fall under sub-Section (2B) of Section 11A of the Act. Sub-Section (2B) of Section 11A of the Act applies in a case where there is voluntary payment of unpaid duty before issuance of show cause notice under sub-Section (1) of Section 11A. When the provision refers to show cause notice, it means a show cause notice which could have been validly issued and surely not a notice which had become time barred. If by efflux of time and in absence of availability of extended period of limitation, such show cause notice itself had become time barred, any payment made voluntarily by the manufacturer cannot be viewed as one made under sub-Section (2B) of Section 11A of the Act. 11. In the present case, we have already held that time for issuing such a notice was one year, which period had already expired. 12. Accepting the stand of the Department that even in such a case once the payment of duty is made, interest liability would follow would bring about an incongruent situation. The recovery of the unpaid or short paid duty would become time barred. If the manufacturer does not pay it voluntarily, it would not be possible for the Department to recover the same. But if h....
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....accordance with the assessment order, the assessee has deposited the entire amount of tax amounting to Rs. 15,236.98 paise on 30.8.1986 and Rs.2,817/- on 26.6.1982. However, on 30.7.1990, the assessing authority passed an order imposing interest against the respondent. Thus the demand was after nearly four years. There was no demand of interest in the assessment order which, in our opinion, form part of the assessment order. As the assessment order did not include a claim for interest, the demand for interest had to be made within a reasonable period thereafter. To be noted that for rectification of the assessment order, a limitation period of three years is laid down. Since the demand of interest was made after almost four years, we hold that the demand is not within a reasonable period and the assessee is not liable to pay the interest as demanded. The Department is not entitled to recover the interest from the assessee-respondent but is at liberty to recover the amount of interest demanded from the Assessing Officer concerned who have not taken steps for four years." 14. A reading of the aforesaid paragraph would show that in the said case notice of payment for interest was i....