Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs Tulsipur Sugar Co. Ltd. on 5 February, 1988
Equivalent citations: 1988(17)ECR494(TRI.-DELHI), 1988(34)ELT687(TRI-DEL)
ORDER K. Prakash Anand, Member (T)
1. In this case the facts are that M/s. Tulsipur Sugar Co. Ltd., respondents, are manufacturers of V.P. Sugar. They were allowed a proforma credit of Rs. 2,69,260/-under the orders of the Assistant Collector of Central Excise, Gorakhpur dated the 7th May, 1973 in respect of excess production of 13,463 quintals of sugar, including 5530 quintals of Raw Sugar for the period from 1-3-1973 to 30-4-1973. After more than 4 years, the Inspector of Central Excise issued upon the respondent company a D.D.2 dated 31-5-1977 bearing the remark "recovery of excess rebate allowed on sugar exported without payment of duty from the rebatable quantity of sugar; period of production being March, 1973". The matter was adjudicated by the Assistant Collector of Central Excise, Gorakhpur, who held that as no duty had been paid on the quantity of sugar exported, there was no justification in granting any advance credit. Accordingly, rebate already sanctioned and credited in their PLA was held to be refundable.
2. When the matter came up in appeal before the Collector of Central Excise (Appeals), he upheld the submission made before him that the demand of duty was barred by time limit Under Rule 10 as it was issued long after the sanction of rebate. Accordingly, the order of the Assistant Collector was set aside. It is against this order that the department has come up in appeal before the Tribunal.
3. We have heard Shri Balbir Singh, SDR for the department and Shri D.N. Kohli, consultant for the respondents.
4. The main ground of appeal taken by the department is that the amount of duty in respect of which recovery was sought to be made could not be termed as recovery of duty "not levied, not paid, short levied or erroneously refunded". It is stated that the amount paid by the Government to the respondent company was in the nature of advance credit which could not be treated as an erroneous refund. Accordingly, it is submitted that recovery of the said amount by issue of demand cannot be treated as time barred in terms of the provisions of the erstwhile Rule 10 of the Central Excise Rules.
5. It is further submitted that the factory did not intimate that they were claiming rebate in respect of goods which were exported. In view of suppression of this fact, it is submitted that Rule 10-A of the Central Excise Rules is clearly attracted in this case and the demand was not barred by limitation.
6. Shri D.N. Kohli, consultant has made two principal submissions; firstly, that the demand of duty is barred by limitation as this was made many years after credit of duty had been given. Secondly, it is submitted that the whole proceedings were vitiated by the fact that no Show Cause Notice was issued to the respondents and the department straightway issued a D.D.2 to raise the demand of duty.
7. While the learned consultant has also made submissions on merits of the case and various related issues, we find that the order of the Collector (Appeals) has allowed the appeal of the respondents merely on grounds of limitation. We, therefore, do not consider it necessary to go into the merits of the case unless we could be persuaded that this decision of the Collector (Appeals) is not maintainable.
8. The advance credit had been taken on 7-8-1974. Thereafter, for so many years, no action is taken by the department and it is only on 31-5-1977 that proceedings are issued by issue of D.D.2 by way of what the department call recovery of excess rebate allowed. We entirely agree that the proceedings initiated by the department are vitiated by their failure to issue a Show Cause Notice to the party and that on this ground alone, the appeal of the department merits to be rejected. Coming now to the argument of time bar on the basis of which the Collector (Appeals) has allowed the appeal of the respondent company, submissions made by the department in their appeal before us are self-defeating and mutually contradictory. On the one hand, it is submitted that the advance credit cannot be considered as a "refund of duties" and it cannot, therefore, be treated as time barred in terms of the provisions of the erstwhile Rule 10 of the Central Excise Rules, and, on the other hand, recourse is sought to Rule 10-A on the ground that there was suppression of facts on the parts of the respondents. We do not know how the latter argument is at all admissible, unless, in the first instance, it is accepted that the amount in question relates to duty refunded.
9. So far as the nature of rebate is concerned, this Tribunal had repeatedly held that rebate is nothing but refund of duty. [Collector of Central Excise, Chandigarh v. Malva Sugar Mills Co., Dhuri, 1986 (23) E.L.T. 1944 & Collector of Central . Excise, Allahabad v. Tulsipur Sugar Co. Ltd., 1987 (12) ECR 1210].
10. We have considered the submission that there was suppression of facts on the part of the respondent company inasmuch as they did not inform the department that they were taking credit of duty in respect of the goods which were being exported. Even if it were to be assumed that the advance credit of duty was not payable in respect of the goods exported - a point we are not going into - we cannot accept that these exports have taken place without the knowledge of the department. It is not at all claimed that these were clandestine exports. The exports had taken place after following due procedure and on the basis of prescribed documentation subject to checks by the departmental officers. The department cannot, therefore, claim that the fact of export of the impugned goods was not in their knowledge or suppressed from them.
11. In view of these findings, we uphold the decision of the Collector (Appeals) that the demand of duty in this case is barred by limitation.
Appeal dismissed.