Customs, Excise and Gold Tribunal - Delhi
Salem Cooperative Sugar Mills Ltd. vs Collector Of Central Excise on 13 April, 1987
Equivalent citations: 1987(13)ECC65, 1987(12)ECR176(TRI.-DELHI), 1987(30)ELT599(TRI-DEL)
ORDER V.T. Raghavachari, Member (J)
1. The captioned appeal was originally filed as a revision application before the Central Government, which, under Section 35P of the Central Excises and Salt Act, 1944, has come as transferred proceedings to this Tribunal for disposal as if it were an appeal filed before it.
2. The facts of the case, briefly stated, are that the appellants are engaged in the manufacture of sugar, an excisable commodity. On 17th December, 1979, they cleared 2,175 quintals of sugar at the tariff value of Rs. 225/- per quintal and paid basic excise duty at 24.25% aci valorem, special excise duty at 5% of the basic excise duty and additional excise duty at 6% ad valorem. It appears that on 17-12-1979, the Government of India, in pursuance of certain changes in its sugar policy, issued three Notification Nos. 313, 314 and 315 of 1979 all dated 17-12-1979. The effect of these notifications was that the tariff value of free sale sugar was fixed at Rs. 307/- per quintal and. the rate of basic excise duty on such sugar was fixed at 15.5% ad valorem, the special excise duty remaining at 5% of the basic excise duty. The additional excise duty went up to 7.5% ad valorem. However, the aforesaid quantity of 2,173 quintals of sugar had been cleared applying the tariff value and the rates of duty as obtaining prior to the issue of the above said notification. As a result, the Department alleged that there was a short payment of Rs. 20,697.83p. on account of additional excise duty. A show cause notice was issued to the assessee and, on adjudication, the demand was confirmed by the Assistant Collector by his order dated 24-3-1982. In appeal, the Appellate Collector by his order dated 24-7-1982, held that the Assistant Collector should have taken into account not only the increase in the rate of additional duty but also made due allowance for the reduction in the basic excise duty (and the consequent modification in special excise duty) on the goods. In this view, he set aside the Assistant Collector's order with the direction that the latter should decide the issue afresh taking basic excise duty, special excise duty and additional excise duty both for excess and short payment. Both the lower authorities did not accept the assessee's contention that the notifications having been published only on the 18th December, 1979 and the sugar in question having been cleared prior to this event, the assessee could not be foisted with the aforesaid extra liability. It is against the aforesaid order of the Appellate Collector that the appellants are presently before us.
3. We have heard Shri V. Sridharan, C.A. for the appellants and Shri K.C. Sachar, J.D.R. for the respondent.
4. Shri V. Sridharan, for the appellants, submitted that it was not sufficient that notifications were issued but they should be published and the date of such publication or making the copy of the gazette available to the public would be the date from which the notification would take 'effect- In this context, he relied on the judgment of the Madras High Court in Asia Tobacco Co. Ltd. v, U.O.I. and Ors. [1984 (18) ELT 152]. In; this case Central Excise Notification No, 284/82, dated 30-11-1982 which rescinded Notification No, 30/79, dated 1-3-1979 was made avilable to the public on 8-12-1982 on which date the Government gazette containing the notifications were offered for sale. The Court did not accept the contention of the Revenue that once a notification was published in the gazette on a certain date, it should be legally presumed to have been given publicity on that date itself. Relying on the Supreme Court judgments in the case of Harla v. State of Rajasthan [AIR 1951-SC-467], and Mahender Lal v. State of U.P. [AIR 1965-SC-722], the High Court held that it was not sufficient that the notification was printed in the gazette bearing a certain date but that it should be made available to the public. The D.R. stated that the judgment of the Madras High Court had been stayed by the Division Bench although he could not state the exact position or produce the order of the Division Bench staying the judgment of the Single Judge.
5. Shri Sridharan further submitted that though the notifications in question provided that they would come into effect on the 17th December, 1979, this provision would be subject to the condition of publication of the notifications in the official gazette as enjoined by Section 38 of the Central Excises and Salt Act, 1944 and such publication could be said to have taken place only on 18-12-1979.
6. Shri K.C. Sachar, D.R. for the Revenue, on the other hand contended that the notifications specifically provided for their coming into effect on 17-12-1979. As such they, had to be given effect to from that date and from no other date.
7. We have carefully considered the submissions of both sides. The issue is whether the changes effected under the three Notification Nos. 313, 314 and 315 of 1979, all dated 17-12-1979 should be applied with reference to the removals effected on 17-12-1979 even if the Gazette notifications had been issued from the press on 18-12-1979 only or later. That is to say, the issue is as to the date or time when the notifications should be deemed to have come into operation. I may note that all the three notifications read that they shall come into force on the 17th day of December, 1979.
8. So far as any statute enacted by Parliament is concerned it can have retrospective operation, provided it is specifically declared to be retrospective in operation or at least would impiiedly have that effect in view of the terms of the statute. Similarly, the power to make the rules (under the statute) retrospective could be conferred under the rule making powers in the statute. Similarly, in respect of notifications issued under a statute they cannot have retrospective effect unless there has been power conferred under the statute to issue notifications with retrospective effect. The Supreme Court has observed in the case of The Cannanore Spinning and Weaving Mills Ltd., [1978 (2) ELT (J 375)] at page 378 that the rule making authority had not been vested with the power under the Central Excises and Salt Act to make rules with retrospective effect. It had therefore held that the retrospective effect purported to be given under the notifications in issue in that case was beyond the powers of the rule making authority. The position is therefore clear that so far as rules or notifications issued under the Central Excises and Salt Act are concerned they cannot have retrospective effect. That is to say, they cannot govern events that had preceded the time when the rule or notification would, in the normal course, come into operation,, It is with reference to this principle that, it appears to us, the decision in the appeal will have to be taken.
9. Section 5 of the Central Clauses Act provides as to when any Central Act or regulation would come into operation. Sub-section (1) provides that where any Central Act is not expressed to come into operation on a particular day, it shall come into operation on the day on which the assent is given by the competent authority. Sub-section (3) further provides that unless a contrary intention is expressed a Central Act shall be construed as coming into operation immediately on the expiration of the day preceding its commencement. If in the present instance, the three notifications are to be held to have come into operation on the 17th day of December, 1979, as expressed in the notifications, and if, further, the rule laid down in Section 5(3) of the General Clauses Act is made applicable thereto, then the notifications shall be deemed to have come into effect on the midnight of 16/17-12-1979. In that event the assessee in the present instance would have no case to put forward. The question therefore is whether the notifications should be held to have come into effect on 17-12-1979, since the notifications express the date of commencement as 17-12-1979 and, if so, the time of commencement should be midnight of 16/17 December, 1979 in the manner abovementioned.
10. The question whether the provision contained in Section 5(3) of the General Clauses Act could be applicable to the notifications issued under an Act had been considered in the case of Maloji Rao v. Matkar [AIR 1953 Madhya Bharat 245 Full Bench]. It had been held that the said provision is applicable only in case of Acts of Parliament or Regulations and not in respect of notifications.
11. As to when a notification should be held to have come into force, irrespective of the provision in the notification itself as to when it shall become operative, the question has been the subject matter of debate in several decisions of High Courts. This question had come up before the Andhra Pradesh High Court in the case of Narayan Reddy v. State of Andhra Pradesh [Vol. 33 (1975) STC 319] and Yemmigenur Spinning Mills Ltd. v. State of Andhra Pradesh [Vol. 37 (1976) STC 314]. In the first case the rate of tax was enhanced by a notification dated 1-12-1966 which was published in the official Gazette dated 1-12-1966. But it was established that the Gazette was released to the public on 12-12-1966 only, though dated 1-12-1966. The court held that the notification could not be given effect between 1-12-1966 to 11-12-1966, both days inclusive. In the second case an earlier notification under which exemption had been granted in case of sales of hank yarn was rescinded by another notification dated 18-5-1971. Relying upon the first decision mentioned supra, and also various other decisions, the High Court held that the rescinding notification would be effective on and from 1-7-1971 only, since the notification was published in the Gazette on 1-7-1971 only. These decisions therefore held that irrespective of the date of the notification, and the date of the Gazette in which the notification was published, the notification could come into operation only on and from the date when the Gazette was actually issued to the public.
12. The same question came before the Madras High Court in the case of Asia Tobacco Ltd. cited by Shri Sridharan. Notification No. 30/79, dated 1-3-1979 had been rescinded by a subsequent Notification No. 284 of 1982, dated 30-11-1982. The result of the rescinding notification was that the benefit available under the earlier notification was being withdrawn. The court held that since the issue of the Gazette containing Notification No. 284 of 82, was proved to have been made available to the public on 8-12-1982 only the said rescinding Notification No. 284 of 82, though dated 30-11-1982, would be effective from 8-12-1982 only.
13. I may also refer in this connection to the decision of the Allahabad High Court in U.S. Awasti v. Inspecting Assistant Commissioner [Vol. 107 (1977) 1TR 1796]. The earlier judgment of a Full Bench of the same High Court in the case of Heera Lal v. District Magistrate was referred to and it was noted that the Full Bench had held that the publication of a notification was complete only when the Gazette containing the notification became available to the public. The Full Bench had held that mere printing of the notification in the Gazette was not publication thereof. Relying on the said Full Bench decision the High Court held, in the cited case, that the same would be the result in the said case also. That case dealt with the publication of a notice in the Gazette under Section 269D of the Income Tax Act, 196L The Court held that the notice had not been published in the Gazette within the 9 months from the date of registration of the sale deed, which was 29-12-1973. It was pointed out that though the notice was dated 19th August, 1974 the Gazette in which it was published was not available to the public before 14th October, 1974 and hence the competent authority under Section 269D did not acquire jurisdiction to continue the proceedings as the proceedings had not commenced within the statutory period.
14. We may further note that recently the same matter came up before the Gujarat High Court in the case of General Fibre Dealers Ltd. v. Union of India [1986 (26) ELT 494]. The Gujarat High Court distinguished the decision of the Allahabad High Court cited supra, But the following observations in paragraph 28 thereof are relevant :-
"In the instant case it is not Mr. Gupta's contention that the impugned notification dated 30th March, 1981 did not become operative at the time of the clearance of the goods on account of its not having been actually published in the official gazette on that very ate and that being so, it is immaterial whether it was made available to the public simultaneously or not,"
15. Therefore, it appears that there was no proof in the said case of the actual publication in the gazette on the required date and therefore the Gujarat High Court held that the question whether it was made available to the public simultaneouly or not was not relevant.
16. Another case to which we may make reference in this connection is In Re. Court fees [AIR 1924 Madras 257]. Under a notification published in the official Gazette on 5-5-1922 the table of fees payable on proceedings on the Original Side of the High Court and the City Civil Court were revised upwards. The admitted fact was that the said notification was received in the High Court at 5 P.M. only on 5-5-1922. The notification read that the amendment thereunder of the schedule of fees was to come into force from the date of publication in the gazette. The issue was whether fees were liable to be paid at the enhanced rate on plaints filed on 5-5-1922 before the receipt of the notification in the High Court. As already stated, the notification was received in the High Court at 5 P.M. at the close of the working hours for receipt of plaints. The majority decision of the Special Bench which heard the matter was to upheld the contention of the Government that fees was to be paid at the higher rate even on plaints filed on 5-5-1922 before the receipt of the notification in the High Court. In coming to this conclusion the majority relied on the rule in English Common Law as to whether the first day of the period is to be included or excluded, the rule in English Common Law being that if period was fixed at either end the first date is to be excluded whereas if the period had not prescribed any date for the conclusion thereof the first date has to be excluded. It may be noted that in this decision also the Special Bench held that the provisions of the Section 5 of the General Clauses Act are not attracted to notifications issued but only to Statutes. It may be further noted that Section 9 of the General Clauses Act lays down general rules as to commencement and termination of time but this again applies to Central Acts and Regulation and, therefore, not to notifications.
17. It is therefore, clear that almost all the judgments of the High Courts, as discussed earlier, have laid down that irrespective of the date mentioned in the notification itself, as to its coming into operation, or the date given for the gazette in which the notification is published, it is the actual date when the gazette containing the notification is made available to the public that would be the date when the notification would come into operation.
18. It would therefore, be necessary in the present case also to go into the question as to on what date the gazette was published, that is, it was printed and issued, in order to ascertain the date when the notifications would have come into effect. If that date is ascertained to be later than 17-12-1979 the effect of holding that the notifications came into effect on 17-12-1979 itself would be to claim restrospective operation thereof. As earlier mentioned, the Supreme Court has itself held that notifications issued under Central Excises and Salt Act cannot have such restrospective operation.
19. The question may also arise whether when the notifications themselves provided that they would come into effect on 17-12-1979 it would be open to this Tribunal functioning under the Act to hold otherwise. It appears to us that while it may not be open to this Tribunal (functioning under the Act) to strike down any notification issued under that Act as ultravires it would be open to the Tribunal, while enforcing the notification, to declare from what date it would be effective, irrespective of the date mentioned in the notification itself as to the date of commencement thereof.
20. In this case the appellants had been pleading from the inception that the notifications were made available to the public on 18-12-1979 only. This probably even without reference to the publication in the gazette, copies of the notification having been sent by other modes of communication to persons likely to be affected thereby. We may note that they had referred before the Appellate Collector to representations made in this regard to the Government. The appellants have filed before us copy of opinion obtained from senior legal counsel, on the basis that the press note announcing the decision of the Government for reintroduction of partial control, and the consequent notifications, were issued late in the evening on 17-12-1979 and the decisions were communicated to the mills on the morning of 18-12-1979 only. It has been urged therein that the gazette could not have been issued before 18-12-1979. But this factual aspect of the matter has not been gone into either by the Assistant Collector or by the Appellate Collector, who had both proceeded on the basis that it would be the date mentioned in the notifications as to the commencement thereof that would be final and conclusive. In the view we have taken as mentioned earlier, it would be necessary for this factual aspect to be gone into before a decision could be taken on the contention of the appellants as to whether the demand for differential duty in respect of removals effected on 17-12-1979 could be enforced against them.
21. Since this has not been done by the lower authorities it would appear to us that this would be a case where the appeal should be allowed and the orders of the lower authorities set aside, remitting the matter to the Assistant Collector for going into the above factual aspect also before passing suitable orders; Accordingly this appeal is allowed on the above terms.
G. Sankaran, Vice-President (T)
22. I have carefully gone through the order proposed by Brother Raghavachari. Much to my regret, I am not in a position to agree with the conclusion reached therein.
23. The Gujarat High Court in Commissioner of Income Tax v. Shilaben Kanchan Lal Rana [1980 (124) l.T.R. 420] held with reference-to Section 269D(1) of the Income Tax Act. 1961 (which lays down : "The Competent Authority shall initiate proceedings for the acquisition, under this Chapter, of any immoveable property referred in Section 269C by notice to the effect published in the official gazette:") that the proceedings could be initiated by the Competent authority only by a notice published in the official gazette. There is, however, no requirement that the gazette in which the notice is published is made available to the concerned persons within the stipulated period. In that case, the competent authority initiated acquisition proceedings by a notice on 18-5-1974 which was published in the official gazette on 31-8-1974. It was held by the Court that the acquisition order eventually passed could not be treated as invalid on the ground that the gazette was not available to the interested parties within time. The contention that till the gazette in which the notice was said to have been published was made available and known to the persons concerned, there was no publication, was rejected by the Court as ill founded.
24. The above decision of the Gujarat High Court and several other decisions were considered by the Calcutta High Court in the case of General Fibre Dealers Ltd., and Another v. Union of India and Ors., [1986 (26) E.L.T. 494 (Cal.)]. Paragraphs 26 and 27 of the judgment are reproduced below :-
"26. In my judgment the Gujarat View seems to be more reasonable at least so far the publication of a notification under Section 25 of the Customs Act is concerned. The official gazette is printed and published from Delhi and it may become available to the public at different times in different places. To accept the Allahabad view as referred to earlier that the publication is not complete unless the official gazette publishing the notification becomes available to the public, the purpose of issuing such notification in public interest may very often be frustrated due to the long delay that normally intervenes between the actual publication of the notification in the official gazette and its becoming available to the public. Public interest may sometime demand issuance of notification under Section 25 of the Customs Act within the shortest possible time. But the Allahabad view of publication is very likely to make the matter difficult. As a matter of fact the Allahabad view, if accepted, may sometime frustrate the very purpose and object of Section 25 of the Customs Act.
27. Thus, at least for the purpose of Section 25 of the Customs Act, publication of a notification in the official gazette should be deemed to be sufficient to make it operative and its availability to the public cannot be made a condition precedent for the same."
25. The above are weighty considerations that cannot be overlooked., If the effect of a given notification is to reduce the duty burden, I would be loath to hold that the notification cannot have, or will not have, effect till the notification is made available to the public. By the same token, I would be loath to hold that the present notifications do not take effect from 17-12-1979.
26. In the above context, one has to bear in mind also the fact that in all the authorities cited in support of the appellant's contention, the notifications concerned were shown to be either printed on a date subsequent to the date shown in the notifications themselves or, as in the Cannanore Spinning and Weaving Mills Ltd. case [1978 ELT (J 375)], purported in so many words to come into effect from a date prior to the date of the notification itself. The latter is not the case in the present instance and, apart from the appellant's say so, there is no evidence herein to show that the subject notifications were printed/published on a date subsequent to 17-12-1979. Nothing prevented the appellants from securing evidence having a bearing on this aspect as the Asia Tobacco Co. did in the case reported in 1984 (18) E.L.T. 152. The present is the second appeal stage and in the original adjudication as well as the first appeal stage, no evidence on the point appears to have been led by the appellants. Nor even before us at this the second appeal stage,. In my view, the present is not a case, therefore, in which a factual investigation should be ordered by way of a remand.
27. The notifications in question provide in so many words that they shall take effect from the 17th December, 1979. This Tribunal, an authority functioning under the provisions of the statute, cannot be called upon to apply the provisions of these notifications to the assessments made in the appellant's case as if the aforesaid provision did not exist. That would be exceeding our mandate. In this view of the matter, it is not possible to accept the appellants' contention that the notifications should be given effect to only from the 18th December, 1979 or that the provision to the effect that the notifications take effect from the 17th December, 1979 should be deemed to be not effective or operative even though the Tribunal may not, and cannot be called upon to, strike down that portion of the notification. As such, I would reject the appellants' contention in this behalf and, consequently, the present appeal.
K. Prakash Anand, Member (T)
28. There are two questions on which detailed views have been expressed by my learned Brothers Sankaran and Raghavachari; the first is as to whether a notification issued by the Government in exercise of its rule making powers should come into effect from the date on which it has been made available to the public or any prior date which may be either specifically provided in such a notification, or, which may be the date of issue of the notification itself; and secondly, whether this Tribunal is the competent forum for challenging the provisions contained in a notification.
29. So far as the first issue is concerned I have seen the decisions of the Gujarat High Court in the case of Commissioner of Income Tax v. Shilaben Kanchan Lal Rana (supra) as well as that of the Calcutta High Court in the case of General Fibre Dealers Ltd., and Another v. Union of India and Ors. (supra). In both these decisions a view has been taken that publication of a notification should be deemed to be sufficient to make it operative and that its availability to the public cannot be made a condition precedent for the same. As against these two decisions there are very many others which have been cited in which a contrary view has been taken, that is to say, that a notification cannot take effect prior to the date on which it can be shown to have been made available to the public I feel that we should, perhaps, more profitably rely on the judgment of the Madras High Court in Asia Tobacco Co. Ltd. v. Union of India and Ors. (supra) which relies on the Supreme Court judgments in the case of Harla v. State of Rajasthan (supra) and Mahender Lal v. State of U.P. (supra).
30. Having agreed with the view of Brother Raghavachari as regards the date on which a notification should be held to be effective, and holding that such date of effect cannot be prior to the date on which it is shown o be made available to the public, I come to the other aspect as to whether in a case where the notification itself provides a prior date, that is to say prior to the date either of its being made public or, say prior even o the date of notification, the Tribunal is an appropriate forum for challenging the provisions of such a notification. I am quite clear in my mind that the Tribunal is constituted only for interpretation of Acts, Rules as well as notifications issued in persuance thereof. It is not vested with any power to go into questions of the vires of the statutory provisions or the Rules or the notifications. I don't think we can take the view that the Tribunal is competent in this case merely because the determination of date of effect of notification is a short or simple matter which does not call into question otherwise the relevant provisions of the notification. The holding of effective date of the notification to be other than that specifically provided in the notification in any such case may negate its entire purpose and may result in unintended serious detriment or windfall benefit to either side, that is the Government or the assessee. Where an assessee. seeks to challenge the vires, or otherwise the validity of The contents, of any provisions of the statute, rules or the notifications, it should take recourse to other remedies provided under the law and he Tribunal cannot provide any relief in such matters.
31. In accordance with the foregoing views the appeal is dismissed.
32. In view of the majority opinion, the appeal is dismissed-
EDITOR'S COMMENTS The requirement under Section 38 of the Central Excise and Salt Act is for publication of a notification in the Gazette of India and not merely its printing in the Gazette of India. There is a considerable distin-ction between the words 'publication' and 'printing'. The act of publication cannot be said to have been completed unless the material is put into circulation or is made available for issue to public. Therefore, the decision of the Member (Judicial) and the Member (Technical) that the date of effect of a notification shall be the date on which the relevant Gazette is made available to public and not the date printed on the Gazette carries more weight.
The Gujarat High Court in the case of Jayant Calander Factory v. Assistant Collector = S.C.A. Nos. 151 and 239 of 1969, decided on 4-3-1971, has held that generally a notification comes into force on the day of its publication in the official Gazette unless the contrary is expressed. Since the notifications in question contained provisions as to the date from which they would come into force, the date of publication of the notifications in the Gazette of India becomes irrelevant in the contest of present case. In this connection, decision of the Vice-President and Member (Technical) seems to be appropriate. The Supreme Court decision in the case of Cannanore Spinning and Weaving Mills [1978 (2) E.L.T. J. 375)] has no application to the present case inasmuch as the notifications in question were issued by the Central Government were dated 17-12-1979 and the date from which they were come into force was also specified to be 17-12-1979. Therefore, these notifications were not given any retrospective effect but rather were prospective in their operation. The issue of notification, its publication in the Gazette and date of its enforcement are three different matters. The vital clue in this respect can be found in Section 38(1) of the Central Excises and Salt Act which provides that all the notifications issued shall be published in the official gazette. In view of these' provisions the publication of a. notification in the Gazette must be preceded by issue of that notification. Since the notifications were issued on 17-12-1979 and were effective from 17-12-1979, there is no question of issue of a notification with retrospective effect.
"It has been a settled proposition that a Tribunal being a creation of statute cannot look into the vires of the statutory provisions"; But recently, the Supreme Court in the case of J.B. Chopra and Ors. v. Union of India [1987 (28) E.L.T. 3 (S.C.)], has held that a question relating to the validity of laws can be considered by the Administrative Tribunal and it can strike down a notification. The Administrative Tribunal in relation to which this pronouncement was made by the Supreme Court is hot a Tribunal created under the constitution, but is a Tribunal created by a statute i.e. Administrative Tribunal Act, 1985. The Special Benches of CEGAT are at par with the Benches of Administrative Tribunal as appeal against their order lies directly to the Supreme Court. Thus is view of this Supreme Court decision the Special Benches of the CEGAT, can now also examine the validity of statutory provisions.