TaxTMI 
TaxTMI 
TaxTMI 
2006 (10) TMI 149
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....ode of valuation for the purpose of levy of excise duty. By a judgment and order dated 19-7-1995, this Court opined that excise duty should be paid on the wholesale dealers price to their customers and not on the price of Respondent No. 1 to its wholesale dealers. 4. A show cause notice was issued on 10-4-1986 as to why Respondent and its wholesale dealers, being related persons, the cost of Corrugated Fibre Containers (CFCs) should not be added to the manufacturing cost. A show cause notice was also issued on 10/11-8-1983 asking the respondent to show cause as to why differential duty of Rs. 57,22,63,857.70 for the period from 1-7-1980 to 31-3-1982 shall not be directed to be paid. Another notice was issued on 8-10-1984 demanding the differential duty of Rs. 43,53,137.70 for the period 1-4-1982 to 30-6-1983. One show cause notice was furthermore issued on 13-4-1987 demanding Rs. 34 crores claiming freight, administrative charges collected by Respondent herein to be added as additional consideration. 5. Indisputably, the issue between the parties as regards valuation of the goods was decided in favour of Respondent by CEGAT by an order dated 18-3-1994. 6. By reason of the order....
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....inst which was marked as Appeal No. 267/M-I/98. 8. Yet again a show cause notice during pendency of the said appeal was issued on 31-3-1998, purported to be in terms of order dated 16-12-1997 whereby Respondent No. 1 was asked to make payment of the differential duty amounting to Rs. 1,38,00,035.76. An appeal was preferred against the said second show cause notice as also the demand notice dated 31-3-1998 before the Commissioner (Appeals) which was registered as 571/M-I/98. On an application filed therein for waiver of the requirements of pre-deposit of duty demanded and stay of operation of the said notice of demand during pendency of the appeal, by an order dated 29-12-1998, the Commissioner (Appeals) directed Respondent to deposit an amount of 50% of the disputed duty demanded, as a condition precedent for entertaining the appeals within a period of 15 days therefor. Against the said order, a writ petition was filed before the High Court of Bombay which was allowed by an order dated 22-1-1999 directing the Commissioner (Appeals) to dispose of the stay application afresh by a speaking order within six weeks. 9. The Commissioner (Appeals) by a common order dated 26-2-1999 dispos....
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....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, a Central Excise Officer may, within six months 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 misstatement 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 such person or his agent, the provisions of this sub-section shall have effect as if, for the words "six months", the words "five years" were substituted." 13. Rule 9B of Central Excise Rules, 1944 (for short "the Rules") reads as under : "Rule 9B. Provisional assessment to duty. - (1) Notwithstanding anything ....
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....e purport and object for which Section 11A of the Act was enacted and read with the definition of "relevant date", the jurisdiction thereunder can be invoked even after a provisional assessment is made and before a final assessment is completed. 16. Mr. Ravinder Narain, learned counsel appearing on behalf of Respondents, however, would submit that a bare perusal of Section 11A of the Act would clearly show that the impugned show cause notices were illegal. 17. Section 11A of the Act provides for a penal provision. Before a penalty can be levied, the procedures laid down therein must be complied with. For construction of a penal provision, it is trite, the golden rule of literal interpretation should be applied. The difficulty which may be faced by the Revenue is of no consequence. The power under Section 11A of the Act can be invoked only when a duty has not been levied or paid or has been short-levied or short-paid. Such a proceeding can be initiated within six months from the relevant date which in terms of sub-section (3)(ii)(b) of Section 11A of the Act (which is applicable in the instant case) in a case where duty of excise is provisionally assessed under the Act or the Rule....
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.... undertaking of exercises by the assessing officer to complete the assessment proceeding as contemplated under the Rules. 23. On a plain reading of the provisions of the Act and the Rules framed thereunder, we have no doubt in our mind that the Tribunal was correct in its finding that the impugned show cause notices were illegal. 24. The question came up for consideration before this Court in Serai Kella Glass Works Pvt. Ltd. v. Collector of C. Excise, Patna [1997 (91) E.L.T. 497 = (1997) 4 SCC 641] wherein this Court clearly opined : "Section 11A deals with recovery of duty not levied or not paid or short-levied or short-paid or erroneously refunded. Proceedings under Section 11A have to be commenced with a show-cause notice issued within six months from the relevant date. "Relevant date" has been defined under sub-section (3)(ii) to mean in a case where duty of excise is provisionally assessed under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof. After final assessment, a copy of the order on the return filed by the assessee has to be sent to him. Duty has to be paid by the assessee on the basis of the final assessment....