PETITIONER:
COLLECTOR OF CENTRAL EXCISE, CHANDIGARH
Vs.
RESPONDENT:
DOABA CO-OPERATIVE SUGAR MILLS LTD.,JALANDHAR
DATE OF JUDGMENT16/08/1988
BENCH:
MUKHARJI, SABYASACHI (J)
BENCH:
MUKHARJI, SABYASACHI (J)
RANGNATHAN, S.
CITATION:
1988 AIR 2052 1988 SCR Supl. (2) 458
1988 SCC Supl. 683 JT 1988 (4) 28
1988 SCALE (2)477
ACT:
Central Excises and Salt Act, 1944: Sections IIA, IIB,
35A(2) and 35L(b)- Excess production rebate- Erroneously
granted- Show cause notice issued for recovery- Whether
valid and permissible- Refund of duty recovered without
authority of law- General law applicable- Refund claims
before departmental authorities- Limitation provided under
Customs/Central Excise Act and Rules thereunder applicable.
%
Limitation Act, 1963: Limitation- Corporation of- Duty
levied without authority of law- General law applicable-
Starting point- When mistake or error comes to light.
HEADNOTE:
The Superintendent of Central Excise issued a show cause
notice on November 15, 1981 to the respondent for recovery
of `excess production' rebate erroneously granted under
Notification No. 108/78. The Assistant Collector, however,
on July 31, 1982 held that there was no excess Production
because of wilful incorrect statement or suppression of
facts and so held that the notice was barred by lapse of
time and dropped the demand.
The Collector of Central Excise exercising powers under
Section 35A(2) of the Central Excises and Salt Act, 1944
issued a review show cause notice on October 6, 1982 and
adjudicated the case thereafter.
The Central Excise and Gold (Control) Appellate Tribunal
having allowed the appeal of the respondent, the Revenue
challenged the said order in this Court.
Dismissing the Appeal,
HELD: 1. Section IIA of the Act would come into
operation only when the demand is on account of Central
Excise duty short levied or not levied or refunded
erroneously. The issue in the instant case, was not any of
the said reasons. [460E]
PG NO 458
PG NO 459
2. Where the duty has been levied without the authority
of Law or without reference to any statutory authority or
the specific provisions of the Act and the Rules framed
thereunder have no application, the decision will be guided
by the general Law and the date of Limitation would be the
starting point when the mistake or the error would come
into light. [460F]
3. In making claims for refund before the departmental
authority as assessee is bound within the four corners of
the Statute and the period of limitation prescribed in the
Central Excise Act and the Rules framed thereunder must be
adhered to. The authority functioning under the Act are
bound by the provisions of the Act. If the proceedings are
taken under the Act by the department the provisions of
limitation prescribed in the Act will prevail. [460G1
4. It may, however, be open to the department to
initiate proceedings in the Civil Court for recovery of the
amount due to the department in case such a remedy is open
on the ground that the money received by the assessee was
2not in the nature of refund. L460H]
Miles lndia Ltd. v. Assistant Collector of Customs,
[l985] ECR 289 referred to.
JUDGMENT:
CIVlL APPELLATE JURISDlUTION: Civil Appeal No. 283 of
1988.
From the Order dated 9. 10. 1987 of the Customs Excise
and Gold Control Appellate Tribunal, New Delhi in Appeal No.
F-l744/83-D [Order No. 808/87-D ).
M.K. Banerjee, Solicitor General? R.P. Srivastava and
Mrs. Sushma Suri for the Appellant.
M.G. Ramachandran for the Respondent.
The Judgment of the Court was delivered by
SABYASACHI MUKHARJI, J. This is a statutory appeal
against the decision of the Customs, Excise and Gold
(Control) Appel-late Tribunal, under Section 35L(b) of the
Central Excises & Salt Act, 1944 [hereinafter called ‘the
Act’).
A sum of Rs.5,60,679.40 was sanctioned to the respondent
on the basis of Notification No. 108/78 as an incentive for
excess production. On 18.5.1979, the said sum was credited
to the Personal Ledger Account of the dealer. On 5th
November, 1981, the Superintendent of Central Excise issued
a show cause notice asking the respondent to show-cause as
to why the sum of Rs.66,306.62, granted in excess under the
aforesaid notification, be not recovered from it.
On 31.7.1982, the Asstt. Collector, however, held that
there was no excess production because of wilful incorrect
statement or suppression of facts by the respondent. In the
premises, he held that the notice was barred by lapse of
time according to the statute and, accordingly, dropped the
demand.
On 6th October, 1982, the Collector of Central
Excise, Chandigarh, while exercising his power under Section
25A(2) of the Act as it stood at the material time, issued a
review show-cause notice against the order of the Asstt.
Collector. The case was adjudicated thereafter by the
Collector who found that the statutory time limit under
Section 111 of the Act would come into play only where the
demand is on account of the central excise duty short levied
or not levied or refunded erroneously .
Aggrieved thereby, on or about 9th October, 1987, the
respondent preferred an appeal before the Tribunal. The
Tribunal allowed the appeal. The propriety of. the said
decision is being sought to be challenged in this appeal. It
appears that Section 11 of the Act would come into operation
only when the demand is on account of central excise duty
short levied or not levied or refunded erroneously. In the
instant case the issue was not for any of the said reasons.
It appears that where the duty has been levied without
the authority of law or without reference to any statutory
authority or the specific provisions of the Act and the
Rules framed thereunder have no application, the decision
will be guided by the general law and the date of limitation
would be the starting point when the mistake or the error
comes to light. But in making claims for refund before the
departmental authority, an assessee is bound within four
corners of the Statute and the period of limitation
prescribed in the Central Excise Act and the Rules framed
thereunder must be adhered to . The authorities functioning
under the Act are bound by the provisions of the Act. If the
proceedings are taken under the Act by the department, the
provisions of limitation prescribed in the act will prevail.
It may, however; be open to the department to initiate
proceedings in the Civil Court for recovery of the amount
PG NO 461
due to the department in case when such a remedy is open on
the ground that the money received by the assessee was not
in the nature of refund. -This was the view taken by the
Tribunal in a previous decision .in the case of Miles India
Ltd. v. The Asstt. Collector of Customs, but it was assailed
before this Court. The appeal was withdrawn. This Court
observed that the Customs Authorities, acting under the Act,
were justified in disallowing the claim for refund as they
were bound by the period of limitation provided therefor in
the relevant provisions of the Customs Act., 1962. If really
the payment of the duty was under a mistake of law, the
party might seek recourse to such alternative remedy as it
might be advised. See the observations of this Court in
Miles India Ltd. v. The Assistant Collector of Customs,
[1985] E.C.R. 289.
In the aforesaid view of the matter the Tribunal was
right. The appeal, therefore, has no merits and it is
accordingly not entertained and dismissed. There is no order
as to costs.
N.V.K. Appeal dismissed.