Customs, Excise and Gold Tribunal - Mumbai
Vidarbha Paper Mills Limited vs Collector Of Central Excise on 13 June, 1991
Equivalent citations: 1992(91)ECR45(TRI.-MUMBAI)
ORDER R. Jayaraman, Member (T)
1. This is an appeal directed against the order in appeal bearing No. PPM11609/NG-15/88 dated 10.8.1988, rejecting the appeal of the appellants.
2. The undisputed factual position is that certain demands were raised on RT-12 returns pointing out short levy, which were not paid by the appellants. The Asstt. Collector, without issuing a show cause notice for confirming the demands, extended personal hearing to the appellants and passed an order dated 17.9.1986 to the effect as below:
I have no hesitation to say that for reasons set out by the Hon'ble Nagpur High Court in their judgment dated 20.1.1986 on this assessee's W.P. No. 2250 of 1983, the amounts indicated as short payments; on various RT 12's from time to time are payable by the assessee. The assessee should forthwith pay the same.
3. Against this order, the appellants went in appeal before the Collector (Appeals), who has dismissed their appeal stating that the RT-12 assessment is also an order and on that order no appeal has been filed. Since the appellants failed to file the appeal against the RT 12 assessments within the stipulated period, the appeal is dismissed as time barred.
4. After hearing Shri Parthsarathy, we heard the elaborate arguments of Shri Mondal. The main thrust of his arguments can be summed up as below:
RT 12 assessment is done under the provisions of Rule 173I, which does not contemplate issue of show cause notice. It is an assessment order and this order can be appealed against before the Collector (Appeals). In this case, these demands for the short levy, have been endorsed on the RT 12, in view of the High Court's dismissal of the writ petition. Hence, if the appellants have felt aggrieved with this order of the assessment, they should have filed an appeal against RT 12 assessment before the Collector (Appeals). Having failed to do this and since they have not made the payment, the Asstt. Collector has extended the personal hearing and passed the impugned order, which cannot be taken to be a confirmation of the demands made on the RT-12. Even if it is held that in terms of the Supreme Court decision in Kosan Metal Product that short endorsement on the RT 12 cannot be treated as a valid notice under Section 11A and on that ground, the assessment order endorsing short levy is held to be void, it has not been voided by an appellate order and hence it is enforceable.
5. We have carefully considered the aforesaid arguments of Shri Mondal. We find that in the case of Kosan Metal Products , the Supreme Court held that short endorsement on the RT 12 cannot save the limitation of time. The Special Bench has also followed the ratio of the judgment of the Supreme Court in the case of Vipul Dyes reported in 1988 (44) ELT 74. In view of the aforesaid decisions, the short endorsements made on the RT 12 returns, denying the eligibility of the exemption notification is not a legally valid order. But Shri Mondal's argument is that though this is a void order, it has not been voided by an appellate order and the order remains unchallenged. If that be so, the Asstt. Collector should have taken action for recovery of the dues under Section 11 of the Central Excise Act. Obviously, this has not been done. On the contrary, the Asstt. Collector has given the personal hearing and finally directed the appellants to make the payment of amounts ordered by way of short endorsement on the RT 12 returns, forthwith. His plea is that because the writ petition is dismissed, they have to make the payment. We have also had an occasion to look into the same issue in the case of Mafatlal Industries Ltd. (Order No. 1187-1214 dated 27.12.1987), where we have held that during the pendency of the W. Petition, endorsement made on the RT 12 returns pointing out such differential duty cannot be said to save the limitation, in view of the Supreme Court specific direction in that case and also in the light of the general observation made in the case of Kosan Metal Product supra. Hence it cannot be said that the such endorsement could cover the limitation of time. The Department should have taken care to issue show cause notices simultaneously. In this case, the undisputed position is that no show cause notice has been issued at any stage and ultimately, the Asstt. Collector directed to enforce the demands issued by way of short endorsement on the RT 12 returns and that is the order which has been taken in appeal before the Collector (Appeals). The Collector (Appeals) ought to have entertained the appeal in accordance with law and pass orders holding that the Asstt. Collector's order is bad in law. Instead of doing that, he has held that no appeal has been filed against the assessment order on RT 12 and the appeal has become time barred. Such an order is not sustainable, since the Asstt. Collector's order has been appealed against and it has been filed in time. The question to be considered is whether short endorsement made on RT 12 is legally valid or not and when that is the issue before him, he cannot get away from that by saying that no appeal has been filed against the assessment order and the appeal has become time barred. In this view of the matter, we allow the appeal and set aside the orders of the authorities below.
(Pronounced in the open court).