TaxTMI 
TaxTMI 
2006 (3) TMI 181
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....ernment to import the recovery provisions contained in the Customs Act, 1962 and, therefore, Notification No. 48/97 issued by the Central Government empowering the excise authorities to invoke the recovery provisions contained in sub-clause (ii) of clause (c) of sub-section (1) of Section 142 of the Customs. Act, 1962 in respect of the duties imposed by Section 3 is ultra vires Section 12 of the Excise Act. It is further contended that at the material time there was no provision under the Excise Act to demand interest on the delayed payment of duty and, therefore, the impugned order in original dated 24-12-91 in so far as it purports to demand interest on delayed payment of duty is illegal and contrary to law. Alternatively, it is contended that assuming the revenue is entitled to recover interest pursuant to an order passed by the Delhi High Court then, such interest levied by the Court has to be recovered as a decree of a Civil Court and not by resorting to the recovery provisions contained in the Excise Act or the Customs Act applied to Excise Act. In other words, the submission is that, where any amount is due to the Government pursuant to an order of the Court and not under th....
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....ey enjoyed and consequently deprived the respondents of their lawful revenues during the period stay operated against them. During the course of hearing of these petitions we were informed by the learned Additional General that a sum of Rs. 700/- crores has become due from the petitioners towards the additional duties of excise because of the stay. The amount is really staggering. Because of the view we have taken the petitioners were not entitled to withhold this amount after having collected duties of excise and then utilise the same for their own business purposes. We are told that the bank rate of interest is 17% per annum on commercial transactions as it was and we are of the opinion that not only that the respondents should be allowed to encash the bank guarantees forthwith, they should also be entitled to interest on these amounts at the rate of 17½% per annum from the date the duty became payable but was stayed under the orders of this Court. Though when the interim orders were made there was no direction of payment of interest but we find that under writ jurisdiction we have no such powers to bring the parties to the same level once the petitions are dismissed and interim....
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.... Recovery of Customs Dues Rules, 1995 ('1995 Rules' for short) as made applicable to the Central Excise matters by Notification No. 68/63-C.E. dated 4-5-1963 as amended by Notification No. 48/97-C.E. dated 2-9-97. 10. As the petitioner failed to pay the interest amount, on 9-3-01 the Excise Authorities attached the immovable properties belonging to the petitioner. Thereafter by a letter dated 31-7-01 the respondents quantified the interest payable at Rs. 25,85,109.18 ps. and called upon the petitioner to pay the same immediately. Thereupon, the petitioner filed the present petition to challenge the validity of the Notification No. 48/97-C.E. dated 2-9-97, as well as the action initiated by the respondents for recovering the interest. 11. To complete the narration of facts, it may be noted that on 2-9-03 [2005 (183) E.L.T. 419 (Bom)] this Court while admitting the petition directed that if the petitioner deposits in Court the entire amount of interest within 4 weeks, the attachment levied on the petitioner's property shall stand lifted and if the petitioner fails to deposit the amount as directed, then the petition shall stand automatically dismissed without reference to the C....
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....ut it extends to other categories also, then it would render the categories specifically enumerated in the section redundant or otiose. Such a construction which renders the express words used in the section nugatory/redundant or otiose must be avoided. 14. Mr. Sridharan further submitted that wherever the Parliament intended to apply all the provisions of the Act and specified some of the categories as and by way of illustration, then the legislature has used the word "including". In this connection, counsel for the petitioner referred to Section 3(3) of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and Section 3(3) of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978. In those enactments, it is provided that the provisions of Central Excises and Salt Act, 1944 and the Rules made thereunder, including those relating to refunds and exemption from duty shall, so far as may be, applied in relation to the levy and collection of the additional duties of excise. By using the word 'including' in those enactments, the legislature has made it amply clear that the categories enumerated therein are only by way of illustration. However, in ....
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....eclared as illegal and contrary to law. 17. Mr. Sridharan further submitted that the adjudicating authority was in error in holding that the interest was payable pursuant to the Delhi High Court decision dated 9-7-91, as the said decision was not rendered in the Writ Petition filed by the firm in which the petitioner was a partner. The Writ Petition filed by the firm was dismissed by the Delhi High Court on 22-1-92, wherein the court has referred to the order dated 9-7-91, but refrained from directing the firm to pay duty with interest. Therefore, in the absence of any specific order for payment of interest passed by the Delhi High Court in the Writ Petition filed by the firm, the Assistant Collector of Central Excise could not have demanded interest. 18. Alternatively, Mr. Sridharan submitted that, assuming the revenue was entitled to recover interest on delayed payment of duty based on the order passed by the Delhi High Court on 9-7-91, even then, to recover such interest the proper course was to adopt the recovery proceedings contained in the Code of Civil Procedure and it was not open to the respondents to initiate proceedings under the Act and the rules made thereunder. ....
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....ted to the recovery proceedings under the Act. Accordingly, Mr. Sridharan submitted that in the present case neither the demand for interest nor the procedure adopted for recovery of such interest are authorised by law and, therefore, the demand as well as the action initiated by the revenue are liable to be quashed and set aside. 22. Mr. R.V. Desai, learned senior counsel appearing on behalf of the respondents on the other hand, submitted that Section 12 of the Excise Act empowers the Central Government to apply the recovery provisions contained in the Customs Act in respect of the duties imposed under Section 3 of the Excise Act. The written arguments submitted by Mr. Desai in this context reads as under : "Notification No. 48/97 dated 2-9-1997 issued by the Central Government in exercise of powers conferred by Section 12 of the Central Excise Act, 1944 which in turn includes Section 3 inter alia makes the provisions of Section 142 of the Customs Act, 1962 applicable whereby the Officers are empowered to collect/recover duty etc." 23. With reference to the demand for interest, Mr. Desai submitted that while disposing of a group of petitions on 9-7-91 the Delhi High Court....
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....gument is that the word 'levy' in Section 12 of the Excise Act does not include 'recovery/collection' and, therefore, the Central Government cannot invoke the recovery provisions of the Customs Act in respect of the duties imposed under Section 3 of the Excise Act. Section 12 of the Excise Act reads thus:— "12. Application of the provisions of Act 8 of 1978 to Central excise duties. - The Central Government may, by notification in the Official Gazette, declare that any of the provisions of the Customs Act, 1962 (52 of 1962) relating to levy of and exemption from customs duties, drawback of duty, warehousing, offences and penalties, confiscation, and procedure relating to offences and appeals shall, with such modifications and alterations as it may consider necessary or desirable to adapt them to the circumstances, be applicable in regard to like matters in respect of the duties imposed by Section 3." 28. Under Section 12, the Central Government is inter alia empowered to invoke the provisions of the Customs Act relating to levy and other provisions specifically set out therein, in respect of the duties of excise imposed under Section 3 of the Excise Act. Section 12 of the E....
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.... collecting, as of money or troops, by authority or force. one who or that which is raised or collected in this manner, as a body of troops or a tax. to make a levy of; collect (taxes contribution, etc.) to impose (a tax)." 33. Kania, J. in Sir Byramjee Jeejeebhoy v. Province of Bombay (A.I.R. 1940 Bom. 65) while construing the Bombay (Amendment) Finance Act, 1939 held that the word "levy" in Section 24 of the staid Finance Act must be construed as meaning "take recovery steps to collect". 34. Chagla, C.J. while construing the provisions of the Sales Tax Law observed in the case of Dialdas Parmanand v. P.S. Talwalkar & Ors. reported in AIR 957 Bombay 71 at para 15 as under :- "Therefore, "leyy" in our opinion in this context must mean any step taken or any proceeding initiated for the ultimate purpose of determining the liability of the assessee and finally collecting the tax. In every taxing statute the various processes are the imposition of the tax by the Legislature itself, the determination of the quantum of tax to which the subject is liable for which usual1y a machinery is set up, and finally a machinery for the summary recovery of the tax." 35. The Apex....
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....assessed". The words "levy and collection" in sub-section (3) cannot be construed differently from the words "levied and collected" used in sub-section (1). S. 3(3), therefore, also covers the entire gamut of S3 (1) and cannot be construed as becoming operative at a somewhat later stage. Its operation cannot be excluded in determining the scope of the charge." 38. From the above, it is clear that the ordinary and natural meaning of the word 'levy' is to collect. Even judicially the word 'levy' has been construed to mean determination of liability as well as collection of tax. Thus, the word levy is a wide and generic expression and unless the context otherwise requires the word 'levy' takes in all the three stages of charge, quantification and recovery of duty. The question, therefore, to be considered is, in the Context of Section 12, whether the word "levy' is to be given its ordinary and natural meaning or a restricted meaning as contended by the petitioner. 39. The Apex Court in the case of the New Central Jute Mills Co. Ltd. v. The Asstt. Collector of Central Excise [1978 (2) E.L.T. (J 393) (S.C.) = AIR 1971 S.C. 454)] ('N.C.J. Mills case 'for short) had an o....
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....lied by the Central Government because Section 12 is enacted to -implement, and enforce the duties imposed under Section 3 of the Excise Act. 41. It may be noted that Section 12 of the Excise Act not only refers to 'levy' but also refers to other provisions such as exemptions, drawback, warehousing, offences and penalties, confiscation and the procedure relating to offences and appeals. Thus, various categories set out in Section 12 clearly show that the said section is enacted to facilitate implementation and enforcement of the duties imposed under Section 3. In other words, as per Section 12, the Central Government is empowered to import the provisions of the Customs Act relating to levy and other specific provisions which are all related to the enforcement of levy. Therefore, in the context of Section 12 and the categories specifically set out therein, it is evident that the word 'levy' has been used in Section 12 to mean charge as well as collection. If the word 'levy' in Section 12 is construed narrowly to mean 'charge' and not 'collection', in our opinion, it would run counter to the very purpose for which section 12 is enacted. 42. The fact that the charging Section 3 ....
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....erein. The argument of the revenue in that case before the Apex Court was that Rule 10 applies to cases where some duty has been paid pursuant to an assessment order and in cases where there is Nil assessment, Rule 10 would not apply. In other words, the submission was that the word 'levy' in Rule 10 means actual collection and in cases of Nil assessment the question of paying duty does not arise and, therefore, in such cases Rule 10 would not apply. In that context, while rejecting the contention of the revenue that the expression 'levy' in Rule 10 means actual collection of some amount, the Apex Court held that under the Excise law the word ' levy.' has not been used as meaning actual collection. In other words, the Apex Court held that in the context of Rule 10 which deals with the power of the proper officer to issue show cause notice for recovery of the duty short levied, the word 'levy' would obviously relate to the imposition of duty and would not relate to collection of duty. Thus, the context in which the word 'levy' is used in Rule 10 is totally different from the context in which the word 'levy' is used in Section 12. As stated earlier, the word 'levy' in Section 12 of t....