AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 483
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....., cut tobacco while paying duty on the finished product i.e. Cigarettes or is a notification granting exemption, simplicitor from payment of excise duty to Cigarettes? (ii) Whether the Board Circulars dated 06/07/1990 and 01/04/1981 and the Trade Notice dated 08/08/1986 did not establish that Notification No.355/86 in effect conferred benefit on the manufacturer in the nature of Set Off and the same was not in the nature of an exemption notification simplicitor? (iii) Whether by virtue of the operation of Notification No.355/86-CE dated 24/06/1986, the appellants had in fact paid the full effective duty on the final products and hence were within their rights to recover the full duty from their customers? (iv) Whether the provision of Section 11D of the Central Excise Act, 1944 could be invoked in respect of payment of duty under Notification No.355/86 when the duty collected from the buyer of the finished products was not more than the duty already paid on the input and the duty paid on the finished product at the time of removal cumulatively? (v) Whether the Tribunal did not err in treating a delay of six years as reasonable on the ground that this is a mere technicality....
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....ime of clearance of machine rolled cigarettes. The assessee therefore availed of partial exemption under Notification No.355/86-CE dated 24/06/1986 and accordingly paid duty after subtracting the amount of concessions available to them. The Officers observed that though the assessee actually paid duty at concessional rates under Notification No.355/86-CE dated 24/06/1986 in respect of machine rolled cigarettes, they indicated on the duty paying documents the entire amount of excise duty as per the rates prescribed under Notification No.3/94-CE dated 01/03/1994 and consequently recovered the entire amount of excise duty from the customer, and therefore, it was fond that the said extra amount was charged to their customer representing excise duty and it was equal to the amount of concession availed by them under Notification No.355/86-CE. Therefore, appropriate authority issued notice upon the assessee dated 05/12/2000 in exercise of powers under Section 11D of the Act. It was found by the Officer that the assessee recovered total amount of Rs. 3,08,33,015/- from their customers as representing central excise duty without crediting the same to the Central Government for the period fr....
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....viz., cut tobacco while paying duty on the finished product i.e. Cigarettes or is a notification granting exemption, simplicitor from payment of excise duty to Cigarettes?:- [3.2] Shri Uday Joshi, learned advocate appearing on behalf of the assessee has vehemently submitted that in the facts of the case the learned tribunal has materially erred in not properly appreciating and /or interpreting Notification No.355/86-CE dated 24/06/1986. [3.3] It is vehemently submitted by Shri Joshi, learned advocate appearing on behalf of the assessee that the learned tribunal has materially erred in treating Notification No.355/86- CE as exemption notification /general exemption notification. It is submitted that as such Notification No.355/86-CE is an exemption notification granting set off paid on the inputs viz Cut Tobaco, while paying duty on the finished product i.e. Cigarettes and is unlike majority of notifications, where the extent of exemption granted to the finished product is quantified and indicated as a particular percentage or amount. It is submitted that such amount of set off of duty paid on the input was as such utilized while making payment of excise duty on the finished prod....
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....uch reliance has been placed upon Trade Notices Nos.153/86 dated 02/07/1996 and 174/86 dated 08/08/1986 and relying upon the aforesaid Trade Notices it is the case on behalf of the assessee that even the Department understood that Notification No.355/86-CE is notification granting set off of duty paid on inputs, namely, Cut Tobaco. It is submitted that the said Trade Notices are binding to the Department. In support of his above submissions, Shri Joshi, learned advocate appearing on behalf of the assessee has relied upon the followed decisions of the Hon'ble Supreme Court; (i) Desh Bandhu Gupta and Co. Vs. Delhi Stock Exchange Association Ltd. reported in (1979) 4 SCC 565; (ii) Collector of CE, Guntur Vs. Andhra Sugar Ltd. reported in 1988 (38) ELT 564; (iii) State of Tamilnadu Vs. Mahi Traders reported in 1989 (40) ELT 266; (iv) UCO Bank, Calcutta Vs. Commissioner of Income Tax, W.B. reported in (1999) 4 SCC 599; (v) Collector Central Excise, Vadodara Vs. Dhiren Chemical Industries reported in 2002 (139) ELT 3. [4.2] Making the above submissions and relying upon the above decisions, it is requested to answer question no.(ii) in favour of the assessee and against the revenue....
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....tment or at the best, a show cause notice ought to have been issued within reasonable time as held by the Hon'ble Supreme Court in catena of decisions. It is therefore submitted that as such show cause notice was either beyond the period of limitation and /or was issued after unreasonable period /time, and therefore, the same ought not to have been confirmed. In support of his above submissions, Shri Joshi, learned advocate appearing on behalf of the assessee has relied upon the following decisions of the Hon'ble Supreme Court; (i) Easland Combines Vs. CCE, Coimbatore reported in 2003 (152) ELT 39; (ii) CCE, Kanpur Vs. Flock (India) Pvt. Ltd. reported in 2000 (120) ELT 285; (iii) Government of India Vs. Citadel Fine Pharmaceuticals reported in (1989) 3 SCC 483; (iv) Ani Elastic Industries Vs. Union of India reported in 2008 (222) ELT 340. [6.2] Making the above submissions, it is requested to allow the present Appeal and answer question no.(iv) in favour of the assessee and against the revenue. [7.0] The present Appeal is opposed by Shri Sudhir Mehta, learned advocate appearing on behalf of the revenue. [7.1] It is vehemently submitted that as such Notification No.355/86-CE....
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....le Supreme Court as is there in the present Appeal. It is submitted that therefore the aforesaid decision shall not be applicable to the facts of the case on hand and /or the same shall not be of any assistance to the assessee. It is submitted that similar decisions of the tribunal, which are relied upon also shall not be applicable to the facts of the case on hand. [7.3] Now so far as the contention on behalf of the assessee that the show cause notice was either beyond the period of limitation and /or issued after unreasonable period is concerned, it is submitted that Section 11D of the Act has been amended by Finance Act, 2000 making it applicable retrospectively effective with effect from 20/09/1991. It is submitted that therefore it can be said that the cause of action to issue notice under Section 11D of the Act can be said to have been arisen when Section 11D of the Act is amended. It is submitted that therefore starting point of limitation can be said to be from the date on which Section 11D of the Act is amended, by Finance Act, 2000. It is submitted that any other contrary view will lead to make Section 11D of the Act, as amended by Finance Act, 2000, applicable retrospec....
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....ion it can be said to be and rightly held to be exemption Notification, and therefore, while making payment of excise duty leviable on Cigarettes, excise duty is required to be reduced to the extent equivalent to the duty of excise already paid on "Cut Tobaco". It cannot be disputed and as per the settled position of law, exemption Notification is required to be construed strictly and having regard to the language employed therein. Under the circumstances, we are of the opinion that no error has been committed by the learned tribunal in holding Notification No.355/86-CE dated 24/06/1986 as exemption Notification. It may be a different thing that while making the payment of excise duty on the final product - Cigarettes the assessee might use such credit of the duty of excise already paid on Cut Tobaco. However, by that, it cannot be said that Notification No.355/86-CE is a Notification granting set off of excise on the duty already paid on Cut Tobaco as sought to be contended on behalf of the assessee. [8.2] Now so far as the reliance placed upon the decision of the Hon'ble Supreme Court in the case of H.M.M. Ltd (Supra) is concerned, on considering the controversy raised before th....
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....ee paid Rs. 20/- towards excise duty on input, namely, Cut Tobaco. As per exemption Notification No.355/86-CE excise duty liability would be Rs. 80/- only. In the present case though the assessee paid the excise duty at Rs. 80/- (after debiting Rs. 20/- paid on input, namely, Cut Tobaco) they recovered excise duty at Rs. 100/- from the customer. Thus, Rs. 20/- was recovered by the assessee in excess of the duty payable, and therefore, to that extent, Rs. 20/- can be said to be enrichment, which is not permissible, that is exactly for which Section 11D of the Act has been introduced. The principles underlying Section 11D is the principle of enrichment. Section 11D as per Finance Act, 2000 reads as under; Section 11D Duties of excise collected from the buyer to be deposited with the Central Government. (i) Notwithstanding anything to the contrary contained in any order or direction of the appellate tribunal or any Court or in any other provisions of this Act or the Rules made thereunder, (every person who is liable to pay duty under this Act or Rules made thereunder, and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under t....