TaxTMI 
TaxTMI 
1988 (4) TMI 63
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....y the Assistant Collector of Central Excise, hereinafter referred to as "the respondent" he being the 2nd respondent in this petition, are without the authority of law, inasmuch as a notice of the type issued by him could have been issued only within six months after the date on which credit was taken by the petitioner. The petition involves interpretation of Rule 56A and in particular sub-rule (2) and sub-rule (2A) of the said rule. 3. Facts must now be necessarily stated in order to understand the basis of the challenge made by the petitioner to the impugned notice. In January 1981, the petitioner imported tape deck mechanism and for the said purpose, he had filed an advance bill of entry on or about 31st of January 1981. Admittedly, the said goods, namely tape deck mechanisms, are classified under Tariff Item No. 68. The goods arrived sometime in April 1981 and the petitioner paid a sum of Rs. 76,684.84P as countervailing duty which was leviable on goods under Tariff Item No. 68. The duty was accordingly paid to the Customs. Thereafter, on 2nd of May 1981, the petitioner wrote to the 2nd respondent, requesting the latter to allow the petitioner to take credit of the counterva....
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....ssued the impugned notice which is dated 25th of March, 1982. In this notice, as already mentioned earlier in the judgment, the 2nd respondent informed the petitioner that the petitioner had already taken credit of Rs. 76,684.84P. In the month of May 1981 and the credit taken by him was illegal, since the permission was not granted, presumably under sub-Rule (2) of Rule 56A. The 2nd respondent pointed out to the petitioner that his case was covered by the provisions contained in sub-rule (2A) of Rule 56A. Since the permission had not been granted, it was necessary that the amount for which credit was taken by the petitioner under sub-rule (2) of rule 56A ought to be paid to the department. Hence the following notice to the petitioner :- "In view of above, you are not eligible for 56A credit in the instant case. Therefore, the amount in question utilised by you should be paid within two days, otherwise action under Rule 230 will be taken." 7. On 27th of March 1982, the petitioner replied to the said notice and had taken up contentions, which have been the contentions in this petition and to which reference will naturally be made later in this judgment. Subsequently, by another....
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....sallowed to utilise such credit, or why the amount equivalent to such credit should not be recovered from him, if the credit has already been utilised." The period of limitation of six months is extended to five years of credit has been allowed under sub-rule (2) on account of wilful mis-statement, collusion or suppression of facts on the part of the manufacturer. It is nobody's case, says Mrs. Mody, and here she is demonstrably on sound ground, that there has been wilful mis-statement, collusion or suppression of facts on the part of the manufacturer. In all the documents to which I have already made reference, the petitioner has mentioned that the tape deck mechanisms which have been ultimately utilised in the manufacture of stereo cassette recorders were imported and the countervailing duty had been paid under Tariff Item No. 68 of the First Schedule to the Central Excises and Salt Act. About this there is no dispute. Therefore, says Mrs. Mody that the notice, which has been given and which, according to her, is under sub-rule (5) of Rule 56A, on 25th of March, 1982 is clearly beyond the period of limitation mentioned in sub-rule (5) and, therefore, is illegal. 10. The res....
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.... behalf of the manufacturer before clearing the goods. It is also true that no provisional assessment was made under Rule 9B. From this Mrs. Mody wants me to infer that the authorities necessarily must be deemed to have granted the permission contemplated under Rule 56A(2). 13. Mr. Bhatia, the learned Advocate appearing for the respondents, has pointed out the provisions contained in sub-rule (2A) and has canvassed the view that unless permission is specifically granted under sub-rule (2), it must be deemed to mean that the grant of permission is still pending. If the grant of permission is still pending, naturally the provisions under sub-rule (2A) will come into operation. If that is so, then the action taken by the respondents under the proviso to sub-rule (2A) is permissible. 14. I am inclined to accept the contention of Mr. Bhatia in this regard. If permission is granted under sub-rule (2) of Rule 56A, naturally the provisions under sub-rule (2A) will not come into operation. The question is whether, in the instant case, permission has been granted under sub-rule (2) or is deemed to have been granted under the said provision. Mrs. Mody says that the answer to this questi....
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....in this behalf by the manufacturer concerned. In the instant case, the petitioner was fully aware that an application has to be made and he did in fact make such an application on 2nd of May, 1981. He did not receive any intimation from the Collector that the permission for which he had applied has been given or the Collector has allowed him credit of the duty already paid on the tape deck mechanisms imported by him and utilised by him or to be utilised by him in the final product manufactured by him. He proceeded as if the Collector would allow him the credit of the duty paid by him. One may, at best, proceed on the basis that the Collector permitted him to receive the component parts in his factory because a document annexed to this petition shows that such permission was granted. But at no point of time, either by an order passed or by any communication addressed to the petitioner, the Collector had allowed him to take credit of the duty already paid on the components. 16. When an application for permission to take proforma credit under sub-rule (2) has been made and when such permission has not been given, the provisions contained in sub-rule (2A) must necessarily come into ....
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.... goods cleared. In the instant case, since I have held that it cannot be said that the permission can be inferred from the clearance of the goods by the petitioner or from the physical acceptance of various forms submitted by the petitioner, the consequences contemplated under the proviso to sub-rule (2A) must necessarily follow. 18. This position is not affected by the argument made by Mrs. Mody based upon the provisions contained in Rule 9B. Mrs. Mody says that if the clearance of the goods was provisional subject to the petitioner undertaking to pay any additional excise duty that would become payable, the authorities would have resorted to the procedure prescribed under Rule 9B. Rule 9B provides for provisional assessment to duty. If the authorities, in the instant case, thought that the permission has not been granted, then they would not have cleared the goods absolutely without resorting to the procedure prescribed under Rule 9B. They would have insisted that the petitioner should comply with the procedure prescribed under Rule 9B if, according to them, the petitioner was allowed to take only provisional proforma credit under sub-rule (2) read with sub-rule (2A) of Rule 5....