Customs, Excise and Gold Tribunal - Mumbai
The Simplex Mills Company Ltd. vs Commissioner Of Central Excise, ... on 7 November, 2001
Equivalent citations: 2001(78)ECC799
JUDGMENT Jyoti Balasundaram, Member (J)
1. The brief facts of the case are that the appellants herein are engaged in the manufacture of various types of yarns and fabrics falling under the erstwhile Tariff Item 18A, 18-III, 18E as well as cotton fabrics falling under Tariff Item 22 of the schedule to the erstwhile tariff. During the period in dispute, namely, May, 1981 to April, 1984 they cleared yarn manufactured by them in their composite textile mill for captive consumption within the same premises. The classification list filed by them claiming nil rate of duty was rejected by the department. Subsequently the appellant filed a writ petition 1064 of 1981 in the Delhi High Court challenging the levy and the High Court passed an interim order on 08/05/1981 staying the recovery of the disputed excise duty subject to the appellant giving a bond to pay the disputed duty supported by a bank guarantee.
2. On 20th February, 1982 Rule 9 and Rule 49 of the Central Excise Rules were amended retrospectively and in the challenge to the amendment made before the Delhi High Court, the court in its judgment dated 11/11/1983 held that Excise authorities cannot recover any dues beyond six months from the relevant date in terms of the provisions of Section 11A of the Act. Appeal against this judgment was filed before the Hon'ble Supreme Court which (sic) recovery of 50% of the duty and directed the appellants to pay the balance 50% in instalments and to continue the bank guarantee. Thereafter in the case of J.K. Cotton & Spinning and Weaving Mills v. Union of India 1987 (32) ELT 234 (SC) the apex Court upheld the validity of the retrospective amendment to Rules 9 and 49 subject to the provisions of Section 11A and Section 11B. The department made the assessments provisional under Rule 9B and necessary endorsement to this effect was made in the classification list and the RT-12 returns.
3. A specific order in respect of the appellant was passed by the apex Court on 17/1/1996. The final assessment of the RT-12 returns was taken up and consequently duty amounting to over Rs. 53 lakhs was found to be payable by the assessees. Accordingly notice dated 28/06/1995 was issued to show cause as to why bank guarantee issued for the said amount should not be encashed by the department; the adjudicating authority confirmed the demand and directed the assessee to pay the amount; the Commissioner (Appeals) upheld the order of the adjudicating authority and hence this appeal by the assessees.
4. We have heard both sides. The contention of the appellants counsel is that the demand raised by the notice dated 28/06/1995 is barred by limitation and he relies upon the judgment of the Hon'ble Supreme Court in the case of J.K. Cotton & Spinning & Weaving Mills Ltd. v. CCE reported in 1998 (99) ELT 8 (SC) wherein the apex Court has held that the assessment cannot be treated as provisional solely on the premise that the matter was subjudice, in the absence of express order of provisional assessment as required under Rule 9B, and on the judgment of the Tribunal in the case of Morarji Gokuldas Spinning & Weaving Mills Ltd. v. CCE, Mumbai reported in 2000 (40) RLT 364 wherein an identical plea, that the demands was time barred, was upheld by the Tribunal.
5. The contention of the appellants is opposed by the learned DR who submits that since the party was put on notice by rejection of the classification list filed by them claiming nil rate of duty the absence of specific show cause notice would not make the demand time barred.
6. We however, are unable to bring ourselves to agree with this submission in view of the decisions cited by the learned counsel and we also find that in the case of CCE v. Kosan Metal Products Pvt. Ltd. 1988 (38) ELT 573 (SC) the apex Court has held that the endorsement on RT-12 returns for short payment is not sufficient nor does it amount to a proper notice. Therefore in the absence of any stay of issue of notice by the High Court or the Supreme Court the department ought to have kept the issue alive by issuing the show cause notice from time to time. Therefore the notice issued in the present case namely in June, 1995 is clearly barred by limitation.
7. We therefore set aside the demand and allow the appeal with consequential relief to the appellants.