Gauhati High Court
Commissioner Of Central Excise vs M/S. Jellalpore Tea Estate on 15 March, 2011
Author: Madan B. Lokur
Bench: Madan B. Lokur, A. K. Goswami
IN THE GAUHATI HIGH COURT
(THE HIGH COURT OF ASSAM, NAGALAND, MEGHALAYA,
MANIPUR, TRIPURA MIZORAM AND ARUNACHAL PRADESH)
CENTRAL EXCISE REFERENCE NO. 2 OF 2005
Appellant:
Commissioner of Central Excise,
Shillong
By Advocates:
Mr. DC Chakraborty,
Central Govt. Counsel.
Respondents:
M/s. Jellalpore Tea Estate, P.O. Jallalpore, Dist. Cachar, Assam By Advocates:
Mr. N Choudhury, Mr. SP Choudhury, Mr. SC Koya, Mr. R Das Mr. SK Ghosh Date of hearing & Judgment and Order : 15.3.2011 BEFORE HON'BLE THE CHIEF JUSTICE MR. MADAN B. LOKUR HON'BLE MR. JUSTICE A. K. GOSWAMI JUDGMENT & ORDER (Madan B. Lokur, CJ) This appeal has been filed by the Revenue under Section 35-G of the Central Excise Act, 1944 (for short the Act). According to the Revenue, a substantial question of law arises out of the order dated 18.6.2004 passed Central Excise Reference No.2 of 2005 Page 1 of 6 by the Customs, Excise & Service Tax Appellate Tribunal, East Zone Bench, Calcutta (for short CESTAT) in Appeal No.EDM-472/2003.
2. Broadly, the assessee had set up a unit for the purposes of manufacturing tea. In terms of Notification No.33/99-CE dated 8.7.1999 exemption from duty was granted to units set up in the North East after 24.12.1997 and also to existing units making an expansion of 25% or more of the installed capacity. According to the assessee, it had increased its installed capacity by more than 25% and therefore, claimed the benefit of Notification No.33/99-CE dated 8.7.1999.
3. The entitlement of the benefit to the assessee came to be considered by the Assistant Commissioner of Central Excise, Silchar. By his order dated 29.4.2002 it was held that the assessee is eligible for the exemption under Notification No.33/99-CE dated 8.7.1999. It was also held that the assessee had completed the expansion work on 30.9.2000 and therefore, the benefit would be available to the assessee only with effect from 1.10.2000. This order has since attained finality inasmuch as it has not been challenged by the Revenue.
4. Based on the aforesaid order dated 29.4.2002, a consequential provisional sanction order was issued in favour of the assessee on 30.4.2002 for an amount of `16,09,585/- as admissible refund for the period under consideration. We are told by learned counsel for the assessee that the amount has since been received by his client.
5. The Revenue thereafter issued a notice under Section 11A of the Act on 6.8.2002 seeking recovery of an amount of `16,09,687/-. It was alleged in the notice that the assessee had played some kind of a fraud for obtaining Central Excise Reference No.2 of 2005 Page 2 of 6 the refund. At this stage, it may be only be stated that the Revenue did not invoke the extended period of limitation under the proviso to Section 11A of the Act.
6. The assessee replied to the show cause notice and an order was passed by the Commissioner of Central Excise, Shillong on 30.9.2003 confirming the demand of `16,09,687/- made under Section 11A of the Act since that amount had erroneously been refunded to the assessee. It was also ordered that interest on the amount should be paid by the assessee.
7. Feeling aggrieved, the assessee preferred an appeal before the CESTAT which passed an order dated 18.6.2004 which is under consideration in this appeal. The CESTAT came to the conclusion that the appropriate course of action for the Revenue would have been to challenge the initial order dated 29.4.2002 passed by the Assistant Commissioner of Central Excise, Silchar whereby the assessee was given the benefit of Notification No.33/99-CE dated 8.7.1999. It was held that the Commissioner of Central Excise could not exercise his power under Section 11A of the Act to re-open a proceeding that had already terminated and was not earlier challenged by the Revenue.
8. The CESTAT eventually held that since the Revenue had failed to challenge the order passed by the Assistant Commissioner, Silchar by invoking the revisional power conferred by Section 35E (2) of the Act, the order dated 29.4.2002 had attained finality. Following the decision of the Madras High Court in Ponds (India) Ltd. v. Assistant Collector of Excise, Madras, 1994(73) ELT 272 (Mad.) it was held that resort to Section 11A of the Act was not permissible. As mentioned above, the Revenue was dissatisfied with this order of the CESTAT and has sought to raise a substantial question of law before us.
Central Excise Reference No.2 of 2005 Page 3 of 6
9. On 20.4.2009, a Division Bench of this Court took the view that the appeal filed by the Revenue ought to be allowed and the judgment and order dated 18.6.2004 passed by the CESTAT was liable to be set aside. The Division Bench also directed re-commencement of the proceedings against the assessee under Section 11A of the Act.
10. Against the order passed by the Division Bench on 20.4.2009, the assessee approached the Supreme Court by way of SLP (C) No.19974/2009 (CA No.2816/2010). By an order dated 26.3.2010, the Supreme Court set aside the order passed by the Division Bench of this Court and remitted the case for framing a proper question of law, if any, and answering the same in accordance with law. It is under these circumstances that the matter has now been placed before us.
11. We have heard learned counsel for the parties and find that no question of law, much less a substantial question of law, arises in this appeal.
12. The material portion of Section 11A of the Act reads as follows:
"11-A. Recovery of duties not levied or not paid or short- levied or short-paid or erroneously refunded.--(1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, whether or not such non- levy or non-payment, short-levy or short-payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder a Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice:
Central Excise Reference No.2 of 2005 Page 4 of 6 Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, as if, for the words one year, the words "five years" were substituted:" (Emphasis supplied).
A bare reading of Section 11A of the Act indicates that power can be exercised only if duty has not been levied or paid or has been short-levied etc. "on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act". Insofar as the present case is concerned, the only issue that arose for consideration was whether the assessee was entitled to the benefit of Notification No.33/99-CE dated 8.7.99. There was no issue of any approval, acceptance or assessment relating to the rate of duty nor was there any issue relating to the valuation of any excisable goods. Ex-facie, therefore, Section 11A of the Act was inapplicable to the facts of the case.
13. That apart, the Assistant Commissioner of Central Excise, Silchar had passed a final order in favour of the assessee on 29.4.2002 and admittedly, this order was revisable under Section 35-E of the Act. For reasons best known to the Commissioner of Central Excise, Shillong no action was taken to have the order of the Assistant Commissioner revised or set aside. Having failed to avail of the statutory remedy available under the Act, the Revenue sought to circumvent the law (as it were) by taking recourse to Section 11A of the Act. In our opinion, this was clearly impermissible inasmuch as what is required to be done in a manner prescribed by law, ought to be done in that manner only or not at all.
Central Excise Reference No.2 of 2005 Page 5 of 6
14. Insofar as the present case is concerned, the prescription of law required that the order of the Assistant Commissioner passed on 29.4.2002 could be challenged only by resorting to Section 35-E of the Act. The Revenue could not initiate collateral proceedings to set aside the order dated 30.4.2002 by resorting to the enabling power under Section 11A of the Act.
15. Consequently, we are of the opinion that: (i) Section 11A of the Act is not applicable to the facts of the case since the issue raised did not concern any approval, acceptance or assessment relating to the rate of duty on or valuation of any excisable goods. The issue raised by the assessee related to its entitlement to the benefit of Notification No.33/99-CE dated 8.7.99. (ii) Even otherwise, the Revenue could not take recourse to Section 11A of the Act when it had a statutory remedy available to it to challenge the order dated 29.4.2002 passed by the Assistant Commissioner of Central Excise, Silchar by resorting to the revisional power available under Section 35-E of the Act.
16. It is for the above reasons that we are of the opinion that no question of law much less a substantial question of law arises for consideration in this appeal.
17. The appeal is dismissed. No costs.
JUDGE CHIEF JUSTICE
Choudhury/-
Central Excise
Reference No.2 of 2005 Page 6 of 6