TaxTMI 
TaxTMI 
1990 (4) TMI 60
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....nd on March 2,1966 demanding differential duty at a rate of Rs. 50/- per metric tonne. It was alleged that no separate duty was payable on the rails as under Item No. 26-AA(i) of the Tariff, duty had already been paid on the purchase of rails. The said item pertained, to semi-finished steel including blooms, billets, slabs, sheet bars, tin bars etc. on which duty at Rs. 75/- per metric tonne plus excise duty leviable on steel ingots was payable. According to the plaintiffs the rails were manufactured from blooms and billets by M/s. Hindustan Steel Ltd. The Inspector of the Central Excise Department had been attending the plaintiffs' factory and it was never pointed out that any extra duty was payable on the rails or the products manufactured there from in the factory of the plaintiffs. Thus, the plaintiffs did not charge any duty from their own customers to whom the manufactured goods were supplied. Rule 10 of the Central Excise Rules, 1944, applied to the case in hand and demand could not be raised for short levy after three months. Thus, in the suit while challenging the demand they prayed for permanent injunction restraining Union of India from recovering the amount of Rs. 1,28,....
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....ceed. However, at no stage, i.e. either before the authorities including appellate authorities or in the present suit any evidence was produced regarding articles which were manufactured by the plaintiffs from such rails. Thus, it is a case which would attract Rule 10-A of the Rules, then in force. Rules 10 and 10-A as existed in 1964-65 read as under :- "10. Recovery of duties or charges short-levied, or erroneously refunded:- (1) When duties or charges have been short-levied through inadvertence, error, collusion, or misconstruction on the part of an officer, or through mis-statement as to the quantity, description or value of such goods on the part of the owner, or when any such duty or charge, after having been levied, has been owing to any such cause, erroneously refunded, the proper officer may, within three months from the date on which the duty or charge was paid or adjusted in the owner's account-current, if any, or from the date of making the refund, serve a notice on the person from whom such deficiency in duty or charges is or are recoverable requiring him to show cause to the Assistant Collector of Central Excise why he should not pay the amount specified in the ....
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.... It was held in the above case, that in the case of short levy Rule 10 and not Rule 10-A would be attracted. In that case at the time of removal of manufactured goods from the factory, necessary forms were filled up on which the Inspector of the Excise Department made endorsement of 'NIL assessment' and subsequently notice was issued making demand of differential excise duty. In such circumstances, it was held that Rule 10-A did not contemplate that some amount must have been assessed, and collected to contradict its applicability. In the case of nil assessment, Rule 10 would be attracted as it would also be a case of short levy. On the same point, reliance has been placed on the decision of the Bombay High Court in Acme Metal Industries Pvt. Ltd. v. S.S.Pathak, the Inspector, Central Excise and Others, 1980 (6) E.L.T. 156 (Bom.). In that case also, the necessary papers were produced for getting approval of the Excise Authority at the time of the removal of the manufactured goods and it was held that it was a case of nil assessment. The decision in N.B. Sanjana's case (supra) was relied upon. On the facts of the present case, the ratio of the decisions referred to above cannot b....
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....989 (41) E.L.T. 3 (SC). It was observed as under: "Section 37(1) of the Central Excises and Salt Act, 1944 enables the Central Government to make rules 'to carry into effect the purposes of this Act'. Sub-section (2) of said Section 37, enumerated the matters the rules might provide for 'in particular' and without prejudice to the generality of the foregoing powers'. Thus this section did not require that the enumerated rules would be exhaustive. Any rule if it could be shown to have been made 'to carry into effect the purposes of the Act', would be within the rule making power. Chapter II of the Excise Act provides for the levy and collection of excise duty in such manner as may be prescribed. It could not, therefore, be said that Rule 10-A was not covered by the above provision. Scrutinising the provisions of Rule 10A there is no doubt that the said Rule 10A, as it existed at the relevant time, was valid and not ultra vires the rule making power." Almost similar provision existed in Rule 12 of the Medicinal Toilet Preparations (Excise Duties) Rules, 1956. The said rule was held to be intra vires by the Supreme Court in Government of India v. Citedal Fine Pharmaceeuticals , ....