TaxTMI 
TaxTMI 
2023 (6) TMI 145
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....8 in excess of the average production of the corresponding period of the preceding three years. On 14.08.1978, the earlier notification was modified and the rebate was now applicable on excess production between 01.05.1978 to 15.08.1978. Petitioner too submitted his claim for rebate on excess production for the relevant period. The same was allowed vide order dated 04.10.1978 and a rebate of Rs. 16,79,339.65 was credited into the Personal Ledger Account of the petitioner mill. On 08.04.1980 a demand cum show cause notice under Rule 10 of Central Excise Rules, 1944 (hereinafter referred to as Rules of 1944) was served upon the petitioner for recovery of Rs. 1,65,878.34 allegedly claimed and received by petitioner in excess of actual rebate due to the petitioner mill. On the basis of petitioner's reply, by impugned order dated 26.08.1992 demand of Rs. 1,65,878.34 is confirmed against the petitioner and appellate authorities have also rejected his appeals by impugned orders dated 08.01.1993 and 05.02.1999. 3. Counsel for the petitioner challenges the impugned orders on the ground that the order dated 04.10.1978, approving petitioner's claim for rebate of Rs. 16,79,339.65 is final and....
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....ory limitation provided under Rule 10 of the Rules of 1944 was invoked by the petitioner against the demand notices. Rejecting the contention of the petitioners, the Bombay High Court held that the order approving the rebate was only a provisional assessment and therefore the demand notice is not barred by limitation. 5. I have heard counsel for the parties and perused the record with their assistance. 6. A perusal of the demand notice dated 08.04.1980 shows that there is no reference to fraud, collusion, wilful misstatement or suppression of facts by petitioner as grounds for obtaining the rebate by the petitioner. The only ground taken in the demand notice is that exemption from duty can not exceed the leviable duty itself. Relevant portion of the demand cum show cause notice dated 08.04.1980 reads, "Whereas it appears that M/S Oudh Sugar Mills Ltd., Hargaon Distt. Sitapur (L.4 No. 15/Sug/Bly/54) have contravened the provisions of Rule 10 of Central Excise Rules, 1944 in as much as they have claimed and received excess rebate of Rs. 1,65,878.34 Paise on 23379.83 Qtls. on free sale of sugar during the year 1977-78 under Notification No. 108/78 Dated 28.4.78 as per details give....
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....have informed the department about this fact and also should have themselves paid the excess amount by making a debit entry in the P/L A/C and the .206 free sale sugar which they have cleared as levy sugar and enjoyed the rebate @ Rs 54 instead of Rs 9.60 was incorrect. This fact they should have also informed the department and by concealing all these facts they have made wilful misstatement and suppressed the fact with the intention to evade payment of duty. The show-cause notice issued under Rule 10 was also correct as the same was in force at the time of issue of show-cause notice." ..... ..... 9. We have set out the relevant parts of the show-cause notice. It speaks of an erroneously granted rebate. There is no mention in it of any collusion, wilful misstatement or suppression of fact by the appellants for the purposes of availing of the larger period of five years for the issuance of a notice under Rule 10. The party to whom a show-cause notice under Rule 10 is issued must be made aware that the allegation against him is of collusion or wilful misstatement or suppression of fact. This is a requirement of natural justice. It is also the law, laid down by this Court in CC....
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....lowed rebate on the quantity as noted on reverse of sugar produced in excess during the months of May 78 to Sept.78 against levy sugar and free sale sugar respectively. The amount should be credited in the Personal Ledger A/c. by the factory as basic excise duty. 2. It should be ensured that the entire quantity produced during the months May to Sept. 78 is cleared from the factory and if there is any loss due to any reason the quantity of rebate may be reduced accordingly. 3. The particulars of adjustment of rebate claim in personal ledger account may please be reported to this office as well as the Supdt. Central Excise MOR II Sitapur and the Chief Accounts Officer Central Excise, Allahabad. 4. Before the rebate is credited to the Personal Ledger account the jurisdictional superintendent may please be approached for the purpose." 11. A perusal of 1st & 2nd paragraphs of the said order dated 04.10.1978, shows that the order is provisional only to the extent it states to clear the entire quantity produced during the months of May to September, 1978 is concerned and in case any lesser quantity is cleared from the factory than the quantity produced during the months of May to S....