Customs, Excise and Gold Tribunal - Calcutta
Balaji Fasteners vs Collector Of Central Excise on 23 August, 1989
Equivalent citations: 1990ECR398(TRI.KOLKATA), 1990(46)ELT543(TRI-KOLKATA)
ORDER S.K. Bhatnagar, Member (T)
1. The learned Counsel stated that the appellant is engaged in the business of manufacture and sale of Steel Bolts and Nuts falling under Item No. 52 of the First Schedule to the Central Excises and Salt Act, 1944 duly authorised under Central Excise licence L4 No. 5/AIR-5/BNS/CAL-V/80.
2. The Government of India Notification No. 83/83-C.E., dated 1-3-1983 issued under Rule 8(1) of the Central Excise Rules, 1944 provided for full exemption of duty leviable on the excisable goods specified therein upto the value of Rs. 7.5 lakhs during the financial year 1983-84. The Bolts and Nuts falling under Item No. 52 of the Central Excise Tariff was specified in the notification. Accordingly, the benefit of exemption under Notification No. 83/83, dated 1-3-1983 was available to the manufacturers of bolts and nuts.
3. The total value of the excisable goods cleared by the appellant during the preceding financial year ending 31-3-1983 being far less than Rs. 25 lakhs, the appellant was entitled to clear bolts and nuts without payment of any duty upto the value of Rs. 7.5 lakhs during the financial year ending 31-3-1984.
4. The appellant in accordance with the provision of Rule 173B(1) filed a classification list effective from 1-4-1983. In the said list the appellant declared its products and claimed the exemption of duty under Notification No. 83/83, dated 1-3-1983 during the financial year ending 31-3-1984. The proper Central Excise Officer after due verification of the declaration approved the list on 19-8-1983 without any modification.
5. The appellant manufactured and cleared bolts and nuts in the month of January 1984 without payment of duty in accordance with the approved classification list. In the month of February, 1984, the appellant did not clear any goods from its factory. But on 14-3- 1984 it cleared from its factory 6875 kgs. of bolts and nuts valued at Rs. 65,600/- under Gate Pass No. 10. The appellant inadvertently paid duty on the said consignment of bolts and nuts by debiting the PLA to the extent of Rs. 10,332/- as Basic Excise Duty and Rs. 492/- as Special Excise Duty. This payment was made by the appellant under a mistake of law thinking that the total clearance value has exceeded Rs. 7.5 lakhs.
6. By its letter dated 8-9-1984, the appellant requested the Jurisdictional Superintendent of Range No. VI to assess the goods cleared on 14-3-1984 at Nil rate of duty as such rate would be in conformity with the approved classification list. A photocopy of the said letter has been annexed to the memorandum of appeal as Annexure "B".
7. On 12-12-1984, the appellant received the assessed copy of the monthly returns in Form RT-12 for the month of March, 1984 alongwith a forwarding letter dated 10-12-1984. The Range Superintendent had assessed Nil Duty on the goods cleared and advised the appellant to file an application for refund.
8. In compliance with the said advice of the Range Superintendent the appellant submitted an application for refund of the amount paid in excess.
9. The learned Assistant Collector rejected their refund claim as time barred. Their appeal against the said order was rejected by the Collector (Appeals).
10. Their contention was that their refund claim arose out of an assessment on RT-12 on March, 1984. Since the Superintendent had assessed RT-12 at Nil rate, therefore, he ought to have allowed adjustment of the amount mistakenly paid in excess.
11. The Superintendent had erred in advising them to file a refund application and they had erred in following the said advice. The Assistant Collector, therefore, should have merely ordered the correction and asked the Superintendent to allow adjustment by crediting the amount in PLA. It was their contention that the Assistant Collector has erred in rejecting their claim as time barred and the Collector (Appeals) has erred in upholding the order of the Assistant Collector.
12. It was their contention that the provision of Rule 173I was framed under the authority of Section 37(2) and the same Clause under Section 11B(4) excluded refund by adjustment contemplated under Rule 173I from the purview of the same section.
13. It is also their submission that the assessed copy of the RT12 return was received by them on 12-12-1984 and they had filed refund claim as per advice of the Superintendent on 27- 12-1984, i.e. within 15 days of communication of the order.
14. It was also their submission that according to the prevalent practice also, the Superintendent used to allow credit or debit in the PLA in case of over-payment and under payment.
15. In support of his contentions, he has filed two sets of RT12s - in one, the Superintendent has by way of his order dated 10-10-1980 indicated the short payment of duty and in another by way of order dated 24-3-1983, he has indicated the excess payment and in the latter case he has allowed the assessee to take credit and no appeal has been filed by the department against these orders and these have been duly complied with by them.
16. He would also like to cite the case of Digvijay Cement Company Limited v. Collector of Central Excise, Baroda [1986 (25) E.L.T. 994 (Tribunal)] in support of his contention that the date of completion of RT12 by the Superintendent constitutes the date of finalisation of the assessment and, therefore, the relevant date for the purpose of claiming refund.
17. The learned SDR stated that the provisions of the Section 11B have to be kept in view and the relevant date in terms of this provision is the date of payment of duty by debiting the PLA and only arithmatical errors could be corrected by the Superintendent in terms of Section 173(1). In this connection, he would like to cite the judgement of the West Regional Bench reported in 1986 (25) E.L.T. 821 (Siemens India Ltd.). Insofar as the documents viz. RT12s submitted today, apparently the Superintendent has allowed the credit in one case and debit in another but it was their contention that this action of the Superintendent is not in conformity with the law.
18. The learned SDR stated that the learned Counsel has mentioned some of the orders in the list of case laws given by him but has neither cited the publication nor given a copy. So, he was not in a position to comment with reference to it. That apart, he has also cited cases pertaining to the period prior to the amendment in the Central Excise Act and, therefore, it was his contention that pre-1980 cases were not relevant because in November that year the law was amended.
19. The learned Counsel agreed to give copies of the cases cited and relied upon by him.
20. The learned Counsel also drew attention to Section 11B(4) which states that 'save as otherwise provided by and under the Act' no claim for refund of duty shall be entertained. He would like to emphasise on the words 'save or otherwise provided by and under the Act', and it was his contention that there was no conflict between Section 11B and Rule 173(1) and he would also like to emphasise that there is a difference between Sections 11A & 11B as Clause corresponding to 11B(4) is not there in 11A.
21. The learned SDR stated that whereas Section 11B talks of refund, Rule 173(1) talks of only adjustment and the two terms are different in meaning and the phrase cited by the learned Counsel only means that no claim shall be entertained because of specific provisions made therein.
22. The learned Counsel stated that only the credit to be allowed in terms of Superintendent's order passed on RT12 and it was his contention that in these circumstances no separate refund application is called for as Section 11B was not attracted and the case was squarely covered by Rule 173(1).
23. The learned SDR opposed this view and reserved further submissions.
24. On 23-2-1989, Shri S.K. Saha, the learned Consultant for the appellant stated that they have since checked up some legal dictionaries and they find that in the Legal Glossary issued by the Government of India, Ministry of Law, Justice & Company Affairs, 1979 at page 227, the phrases "Save as otherwise provided" and "Save as otherwise prescribed" have been explained : (1) "Save as otherwise expressly provided": except when otherwise expressly provided [Section 12(1) Contempt of Courts Act] and (2) Save as otherwise prescribed": except when otherwise prescribed [Or. 21, R.65, C.P.C.].
25. They have also found that the law lexicon 1987 edition by P. Ramnath Aiyer also mentions, inter alia, that a Saving Clause is an exception of a Special thing out of general thing mentioned in a statute. "Otherwise", by either like means, contrarily, different from that which relates, in a different manner, in another way, in any other way, differently in other respects, in other respects, in some other like capacity. They would also like to draw attention to the Supreme Court judgment in the case of Indramani v. W.R. Natu reported in AIR 1963 SC 274. They would draw attention to Para 15 where the expression "by the Act" "under the Act" have been discussed. They are filing a photocopy of the judgment which may be taken on record. The learned Counsel further stated that in this case, the Assistant Collector himself has approved the classification at 'nil' rate of duty but by mistake they had paid the amount in question and it was reflected in the RT12 return. As soon as they realised the mistake they had informed the Superintendent and requested him to correct the position in the RT12 assessment by virtue of their letter dated 8-9-1989 and this letter was written within six months of the date of payment of duty. The Superintendent, however, took nearly nine months to complete the assessment.
26. At the time of this completion, he noted the mistake but instead of correcting it and allowing credit, as he had done in some other cases, he directed them to file a refund claim before the Assistant Collector which they did, but the Assistant Collector rejected the same as time barred.
27. It was their contention that they had filed a letter within six months and it was for the Superintendent to take cognizance of the mistake and order its correction and allow consequential adjustment in terms of Rule 173I which provides for assessment by proper officer and a Superintendent has been declared as proper officer under this Rule. In any eventuality, the Collector (Appeals) has not contradicted these facts.
28. It was also their alternative submission that Sections 11B and 173I are independent provisions and by virtue of sub-clause (4) of 11B the provisions in other rules could be taken into account and that is where the importance of the phrases "Save as otherwise provided by or under the Act" assumes significance. In view of this provision, it was their contention, that the action should have been taken in terms of Section 173I which does not provide any time limit.
29. The learned SDR stated that as a matter of fact, under the Central Excise Act and Rules it is the Assistant Collector who is the assessing officer inasmuch as it is he who approves the classification, valuation and rate of duty. The Superintendent is a subordinate officer who is merely required to see at the time of checking the RT12 returns that the quantum of duty is correctly paid in accordance with the Assistant Collector's order and if he finds any arithmatical or clerical error, he can order rectification of the same or adjust, but he is not competent to act as an independent officer in his own right.
30. It is also his contention that all refund applications which are required to be filed in terms of Section 11B which provides for a time period of six months from the relevant date and the relevant date has been indicated as the date of payment of duty and not the date of completion of the RT12. In this connection, he would like to draw attention to the differing provisions in Section 11A and Section 11B because in demand cases the date of filing the return RT12 is also one of the relevant dates but this is not the position in case of refund.
31. The learned SDR further stated that he would like to emphasise in particular the language of Clause (1). He would also like to submit that sub-clause (4) is independent and is a different provision and it is noteworthy that the time limit has been indicated only in the Clause (1) and not in the other clauses, and the cases where the time limit can be relaxed have been indicated in the proviso to Clause (1). Therefore, insofar as the question of time period is concerned it is Clause (1) read with its proviso which is required to be applied and even in sub-clause (4) the emphasis is on the fact that no claim would be otherwise entertained.
32. It was also his alternative submission that in any case payment by mistake was not covered by Rule-173I which only allows adjustment.
33. The learned SDR further stated that in this case the Assistant Collector who is the proper officer under Section 11B received the refund claim after six months and, therefore, their claim is hit by time limit under Section 11B(1). In support of their contention that it is the date of payment of duty or adjustment in PLA or debit in PLA which is the relevant date and not the date of completion of the RT12, he would like to cite the judgment and orders of the various Benches of the Tribunal, viz. -
(1) Indian Oil Corporation v. Collectors - 1983 E.L.T. 1050 CEGAT (WRB) (2) 1986 (25) E.L.T. 821 CEGAT (NRB) (3) 1986 (26) E.L.T. 756 CEGAT (SRB) (4) 1988 (18) ECR 653 CEGAT (SB-'A')
34. The learned Counsel stated that Rule 173I does not use the words "arithmatical errors" and is not confined to such errors or mistakes and it uses the words "and the provision clearly covers payment in excess or deficiency".
35. The learned SDR contended that the Act and the Rules have to be read in harmony and in case of conflict the Act will prevail. However, it is also their contention that as a matter of fact, in this case, this contingency does not arise as the matter is squarely covered by Section 11B.
36. The learned Counsel stated that undoubtedly the principle of harmony has to be taken into consideration and that is why Section 11B(1) and Section 11B(4) both have to be read together along with Rule 173I.
37. We observe that the submissions of the learned Counsel have strong force. We notice in this connection that the basic facts are not in dispute. In other words, the classification list had been admittedly approved by the Assistant Collector allowing the appellants the benefit of exemption Notification claimed by them. The nett result was that they were entitled for clearance at nil rate of duty. This fact was noticed by the departmental officers themselves and accordingly the Superintendent had finalised the RT12 indicating nil rate of duty. In the circumstances, any payment in excess of the amount assessed as duty could not be categorised as duty and was, therefore, not covered by Section11B, which relates to cases of refund of duty, and only such other sums as have been specified therein. In fact, the present case is apparently one of correct assessment but incorrect payment of a sum in excess of the amount assessed and is, therefore, merely in the nature of an error apparent on the part of the assessee, which was simply required to be rectified.
38. In the circumstances, the Superintendent was fully within his competence to allow credit of the amount due in the PLA as soon as he noticed this mistake (or the mistake was brought to his notice).
39. In fact, the Superintendent was duly bound to allow this adjustment in terms of Rule 173I and has failed in his duty in not allowing such adjustment.
40. The learned SDR is of course right in pointing out that it was the job of the Superintendent to follow the order of the Assistant Collector but then the order subsisting at that time was the order of approval of classification list allowing exemption and, therefore, in pursuance thereof, the Superintendent was required to assess the duty correctly and allow the consequential adjustment.
41. Further, the Superintendent has clearly erred in advising the appellant to file a refund application to the Assistant Collector as no such application was called for in the circumstances of the case and adjustment could be ordered by him straightaway (even suo motu).
42. The learned Counsel has drawn our attention in this connection to the fact that in the past such credits and debits have been allowed by the Superintendent and, therefore, there was no apparent reason as to why he departed from this good old practice which was obviously correct. We also wonder as to why the Assistant Collector instead of directing the Superintendent to follow the correct procedure has compounded the error by rejecting the claim as time barred. As a matter of fact, there was no question of time limit being involved in this case and the appellant was clearly entitled to return of such amount paid in excess which was due to him in terms of the Assistant Collector's order of approval of the classification list. It is noteworthy that the Assistant Collector himself was also bound by his own order i.e. once he had approved the classification list, he could only take further action accordingly and could not refrain from giving consequent benefit.
43. That apart, we also find substance in the learned Counsel's submission that Rule 173I has been framed with reference to Section 37 and is an independent provision. Section-11B also confirms this position by virtue of Clause 4 which significantly uses the phrases 'Save as otherwise provided by or under this Act'. In this connection, the learned Counsel has drawn our attention to the case of Indramani v. W.R. Natu reported in AIR 1963 SC 274 wherein the meanings of the expression 'By the Act' and 'under the Act' have been clearly stated and we are in respectful agreement with the same.
44. The learned Counsel has also drawn our attention to the Legal Glossary 1979 Edition which is a Government of India publication in which the phrases "Save as otherwise expressly provided" has been shown to mean "Except when otherwise expressly provided". This shows that refund could also be claimed under other provisions if they provided for the same. Rule 173I framed under Section 37 is one such provision which provides for payment to the Government/Assessee by way of debit/credit in the PLA and it was within the authority of the Superintendent to allow this adjustment. In fact, the sole idea of 173I is verification with a view to check, inter alia, the calculation etc. and ensure the payment of correct amount of duty in terms of Assistant Collector's order.
45. We also note that the learned SDR has drawn our attention to Caluse (1) of Section 11B and pleaded that the time limit provided therein applies to all the clauses; And where the time limit can be relaxed have also been indicated in the proviso to Clause (1). He has emphasised that Clause (1) has to be read with clause (4). While we agree that a section has to be read as a whole, we find that in this particular case, clause (4) is an excluding clause, i.e. it indicates as to what is or will be outside the purview and therefore whatever goes out of the purview of Section 11B by virtue of this clause, goes out of purview of clause (1) and the time limit prescribed therein.
46. We are also unable to agree with the contention of the learned SDR to the effect that the date of payment to the Government by adjustment or debit in PLA is the relevant date for purpose of calculating the time bar under Section 11B, inasmuch as there is no provision to this effect under Section 11B. The learned SDR here is merely lifting the words mentioned in Section 11A, and applying them to 11B. But this cannot be allowed. Provisions of Section 11A and 11B are distinct provisions and each one must be followed in respect of the cases to which it is applicable and not otherwise. Since the relevant date(s) for the purpose of 11A (demand) and for purpose of 11B are different this difference cannot be wished away.
47. The learned SDR has cited a number of Tribunal orders in support of his contention. However, this Bench had also occasion to examine this issue in another case (Appeal No. E-150/86 - Oriental Insulated Conductor Pvt. Ltd. v. Collector of Central Excise, Bhubaneswar) at length and it would suffice for our purpose to mention that Rule 173 C(c) read with Rule 173F only allows self-determination of 'duty liability' and the amount so determined is only in the nature of 'deemed duty' and cannot be categorised as 'assessed duty', for the power of assessment has been vested only in the officers of the department in terms of Rule 173B read with Rule 173C and 173I. The difference be tween deemed duty and assessed duty becomes clear if we read 173C(c), 173F and 173I together and note, inter alia, that -
(i) Rule 173C(c) actually uses the words "Deemed to be the duly"
(ii) 173F uses the words -
"Determine his liability for the duty"
and in the first line of Rule 173I (2) the reference to duty determined and paid by the assessee is to the aforesaid deemed duty liability determined with reference to 173F and. in the second line thereof the reference to duty assessed by the proper officer, is to assessed duty determined by the Superintendent under Sub-rule (1) of Rule 173; Further, once the 'deficiency' or 'excess' had been noted by the Superintendent the assessee could himself debit/credit the PLA on receipt of 'assessment order' 'passed on RT12 by the Superintendent in terms of 173I'. Thus, the process of assessment which begins with the approval of classification list (by the Assistant Collector) ends only with the completion of RT12 (by the Superintendent). In our opinion, the time limit can be determined only,, with reference to the date of completion of assessment, in the absence of any provision to the contrary
48. The learned SDR has of course drawn our attention to the case of Siemens India Ltd. reported in 1986 (25) E.L.T. 821 Tribunal. In this case, there was a difference of opinion between the Members and the appeal was dismissed in view of the majority opinion. First and foremost, this was a case with reference to Rule 11 read with Rule 173J whereas the present case is with reference to distinct provisions of Section 11B and 173I, and, therefore, distinguishable.
49. The learned SDR has also referred to the case of Meteur Chemicals Industries Ltd. -1986 (26) E.L.T. 756 Tribunal (SRB). However, with due respect to the views expressed by our Brothers in SRB, we would like to mention that in our view the assessment by proper officer under Rule 173I cannot be equated with the work of the computist in the Customs, as under Rule 173I, the officer has to apply his own mind and is required to complete the assessment after such further enquiry as may be considered necessary. It is noteworthy that this rule directs the provision to 'assess the duty' and not merely to compute the same although computation is (also) naturally involved and is indeed necessary to conclude the process.
50. We also hold that adjustment was not assessment but it was our opinion that it was consequential to completion of assessment and this completion by the Superintendent is the tail end of the process of assessment which was spread over, distinct, selfcontained stages beginning with the approval of classification list by Assistant Collector and ending with the completion of RT12 by the Superintendent. The action of the Superintendent is thus the concluding part of the process and ultimately the matter reaches a finality only on the date and time of passing of the assessment order on the RT12 by the Superintendent of Central Excise in terms of Rule 173I.
51. As a matter of fact, the procedure prescribed for assessment under the Customs Act is quite different from the one prescribed under Central Excise Act and even within Central Excise it is different for the items under physical control and the items under SRP, and therefore, it would not be correct in our view to apply the procedure of one category in respect of another. In fact the very concept and mode of assessment has undergone a fundamental change after introduction of SRP, inasmuch as under this scheme, the goods could be cleared in anticipation of finalisation of assessment which was unthinkable prior to introduction of this "system. It will be erroneous, therefore, to read the new provisions in the light of old ones or in the context of old concept, which must be given a go by in view of the new situation.
52. We feel that the provisions of Rule 173F under which the assessee determines the liability for duty and the deemed duty concept incorporated in 173C(c) have hitherto not received the attention they deserve but are nevertheless required to be duly taken into account.
53. We also note that provisions of Rule 9 (which prescribes the time and manner of payment of duty) have been mentioned by the learned SDR without apparently realising that they have to be read with Rule 713A, which clearly lays down under Clause A-1 as follows:- "Rule 173A. Application (1) Except as hereinafter provided, the provisions of this Chapter shall apply to such excisable goods as the Central Government may, by notification in the Official Gazette, specify in this behalf, and where there is a conflict between the provisions of this Chapter and the provisions contained in any Chapter; in relation to such excisable goods the provisions of this Chapter shall prevail:
Provided that from amongst the excisable goods as are specified under this sub-rule, the Central Government may, by notification in the Official Gazette, declare certain excisable goods as declared excisable goods and the provisions of the Chapter shall, subject to such modifications as are indicated in relation to such declared goods in any rule under this Chapter, apply.
Explanation:- The expression 'declared excisable goods', wherever it occurs, in this Chapter means the goods declared under this proviso."
54. Therefore, Rule 9 has to be read along with provisions of Chapter VIIA and not in isolation and has to be interpreted and applied in the context of changes introduced by Chapter VIIA and in the event of conflict, provisions of Chapter VIIA must prevail (in respect of items to which it is applicable). Therefore, Rule 9 must be read with 173B, 173C, 173C(c) and 173f and when so read in view of the provisions of Rule 173C(c) and (0 towards which we have already drawn attention, the word 'duty' used in Rule 9 can only be taken to refer to the deemed duty determined by the assessee under 173f in cases covered by SRP. Actually, in such cases, it can in no circumstances be 'assessed' 'duty' as under the provisions of Chapter VIIA assessment by the proper officer follows clearance and does not precede it (as used to happen in the days of physical control and is now confined to the few items still left under that system).
55. The fact that the old concept of assessment prior to clearance has been replaced by the system of clearance in anticipation of finalisation of assessment has to be in our view accepted in view of the changes in law introduced under SRP and incorporated in Chapter- VIIA. We are, therefore, not persuaded by the views expressed in the aforesaid order (cited by learned SDR).
56. We are not labouring this point further as we have already shown that in this particular case Section 11B is not attracted at all and the matter is required to be considered and decided in terms of Rule 173I itself.
57. To sum up, the present case merely boils down to a question of implementation of the initial order of the Assistant Collector approving the classification list allowing benefit of exemption Notification No. 83/83. Since the amount in question was inadvertently paid in excess of the amount assessed as duty, therefore, it was payable by adjustment by the Superintendent in terms of Rule 173I. No refund application was called for and no question of time bar arises in the circumstances and the departmental authorities action is misconceived and the authorities below have erred in passing the impugned orders.
58. We, therefore, set aside the aforesaid orders and accept the appeal.
T.P. Nambiar, Member (J)
59. I have perused the order of my learned Brother. I entirely agree with him in the conclusions that the present case merely boils down to a question of implementation of the initial order of the Assistant Collector approving the classification list allowing benefit of Exemption Notification No. 83/83, but since the amount in question was inadvertently paid in excess of the amount assessed as duty, it was payable by adjustment by the Superintendent in terms of Rule 173I. In such circumstances, no refund application is necessary and the question of time bar does not arise in the circumstances of this case. The adjustment was not an assessment but it was consequential to completion of the assessment and this completion by the Superintendent is the tail-end process of the assessment which was spread over, distinct, self-contained stages beginning with the approval of the classification list by the Assistant Collector and ending with the completion of RT12 by the Superintendent. Thus, the Superintendent reaches a finality on the date and time of passing of the assessment order on the RT12 in terms of Rule 173I.
60. I also agree with my learned Brother that the contention of the learned SDR to the effect that the date of payment to the Government by adjustment or debit in PLA is the relevant date for the purpose of calculating the time-bar under Section 11B inasmuch as there is no provision to this effect under Section 11B.
61. Since the claim is not one of refund but one of assessment, I may like to add that Rule 173I applies to this case. No doubt, under Section-11B the authorities are bound by the time limit prescribed, which is six months from the date of payment of duty, but in the facts and circumstances of this case, Section 11B of the Central Excises & Salt Act, 1944 is not attracted and on this ground, I entirely agree with my learned Brother's view that this case is covered under Rule 173I.
62. In the result, the impugned order is set aside by accepting this Appeal.