Customs, Excise and Gold Tribunal - Delhi
Bilaspur Spinning Mills And Industries ... vs Collector Of Central Excise on 19 November, 1987
Equivalent citations: 1988(15)ECC341, 1988ECR379(TRI.-DELHI), 1988(33)ELT763(TRI-DEL)
ORDER V.T. Raghavachari, Member (J)
1. These five appeals were heard together as they arose out of a consolidated order-inrappeal disposing of 5 appeals before the Collector, the issue being the same in all the 5 appeals.
2. The appellants M/s. Bilaspur Spinning Mills and Industries Limited obtain duty paid viscose staple fibre and polyester staple fibre and convert the same into cellulosic spun yarn failing under Item 18III Central Excise Tariff. On receipt of Trade Notice No. 157/81 Central Excise dated 26-9-1981 issued by the Collector of Central Excise, Indore, they applied under letter dated 16-4-1982 for grant of set-off in terms of the said notification. Under letter dated 26-4-1982, they were informed that the Assistant Collector had permitted them to avail set-off as claimed by them. Subsequently they received 5 notices under which they were informed that they had failed to mention the particular notification under which set-off was permissible in their case and that there appeared to be no notification issued by the Government permitting set-off with reference to their product and, hence, the set-off already availed of by them was proposed to be recovered. The notices dated 15-9-1982; 30-9-1982; 22-11-1982; 18-12-1982 and 14-1-1983 related to recoveries in respect of set-off availed during the periods April 1982 to July 1982; August 1982; September 1982; October and November 1982; and December 1982 to 11-1-1983 respectively. The appellants replied denying liability. On adjudication the demands for recovery were confirmed under 5 different orders by the Assistant Collector. The appeals against the same were rejected by the Collector (Appeals) under his order dated 30-4-1983. These appeals are against the said order.
2. We have heard Shri Raja Ram Agarwal, Advocate for the appellants and Shri Balbir Singh for the Department.
3. It is conceded that there is no notification issued either by the Central Government or by the Central Board under which set-off was available in respect of the product manufactured by the appellants. It is pointed out by the appellants that they had made the application dated 16-4-1982 for availing set-off since the Trade Notice dated 26-9-1981 of the Collector specifically mentioned that set-off was available in respect of cellulosic spun yarn and it is on the basis thereof that the appellants had applied for availing of such set-off. In this connection it may be noted that even in the application dated 16-4-1982 the appellants themselves had specifically mentioned that notification No. and date granting set-off was not known and that the application was being made on the basis of the reference to cellulosic spun yarn in Trade Notice No. 157/81. It is, therefore, clear that the appellants had not specifically referred to any particular notification under which set-off was permissiole with reference to that product and that even so the Assistant Collector had permitted set-off under his order dated 26-4-1982. It is for this reason that the appellants contend that it was not open to the Assistant Collector to specifically review the said order and withdraw the permission granted in the absence of any supervening circumstances requiring such a review of the earlier order. The Collector (Appeals) has stated that the order of the Assistant Collector dated 26-4-1982 was administrative in nature and hence there was no question of the subsequent order for withdrawal thereof being invalid in the absence of a power of review. This view does not appear to be correct since Rule 56A(2C) provides for an appeal against an order refusing grant of permission for set-off. That would indicate that the order to be passed on application for availing set-off is a quasi-judicial order and not a mere administrative order.
4. It is submitted on behalf of the appellants that the Assistant Collector was not entitled to review his order granting permission for availing set-off and hence the removals having taken place under approval granted by the Assistant Collector the provisions of Section. 11A relating to recovery of short-levied duty would not be. attracted. But this argument overlooks the fact that Rule 56A(5) itself provides for a right for requiring the assessee to show cause why, in the circumstances stated in the said Sub-rule, the credit already allowed should not be recovered from him. In fact, the said Sub-rule provides for 2 different period of limitation in respect of such action. Therefore, the argument that the Assistant Collector was not at all entitled to initiate action for recovery of the set-off already allowed to be taken is not acceptable.
5. Under Rule 56A(5)(i) the Assistant Collector was entitled to take action for recovery of credit wrongly availed if such availment was on account of an error or omission, or mis-construction on the part of the officer. The proviso to the said rule does not apply to the facts of the present case as no case of wilful misstatement, collusion or suppression of facts could be alleged against the appellants either in obtaining the order for availing the set-off or specifically availing the set-off.
6. The case for the Department, as put forward by Shri Balbir Singh, is that the grant of permission by the Assistant Collector under his order dated 26-4-1982 was due to an error on his part and hence the provisions of Sub-rule 5 are properly attracted. As earlier mentioned, it is not in dispute that the procedure for set-off under Rule 56A was not applicable to the cellulosic spun yarn falling under Item 18III manufactured by the appellants. In the absence of any such notification the Assistant Collector was not entitled to grant permission for availing such set-off. It is, therefore, clear that in granting such permission, merely on the ground that the Trade Notice of the Collector referred to cellulosic spun yarn specifically as a product entitled for such set-off, the Assistant Collector was clearly acting in error. We are, therefore, satisfied that the Assistant Collector did have jurisdiction to take action for recovery of the credit wrongly allowed to be taken.
7. The learned counsel submits that the Trade Notice having been issued by the Collector, acting under powers traceable to Rule 233 of the Central Excise Rules, the Assistant Collector could not go into the question of the validity of the Trade Notice. The Trade Notice issued by the Collector could not grant a relief which was exclusively within the powers of the Government or the Central Board and the Assistant Collector was, therefore, not barred from holding that the reference to cellulosic spun yarn in the Trade Notice was no authority for permitting the appellants to avail of the benefit of set-off with reference to that product.
8. It is then submitted that in any event the demands for recovery could not be made with reference to set-off already taken and that the order of the Assistant Collector rescinding permission already granted could be effective only from the date of the notice. It is no doubt true that set-off had been taken in pursuance of an order passed by the Assistant Collector. But the error had been discovered soon thereafter and notice had been issued on 15-9-1982 within 5 months of the grant of the earlier permission. It has already been seen that the grant of permission was an obvious error. In the circumstances we hold that under Sub-rule 5 of the Rule 56A the Assistant Collector was entitled to demand repayment of credit already taken within the time limit specified in the said Sub-rule. In the present case it may be seen that the first notice was issued on 15-9-1982. Therefore, in any event the availing of set-off subsequent to that date (as covered by the notices 4 and 5 and partly by Notice 3) cannot be said to have been without notice of the action taken for rescinding the earlier order. Hence with reference to these periods the argument advanced by the appellants cannot survive for that reason itself. But, for the reasons already stated, we are of opinion that the demands as contained in all the 5 show cause notices were valid and legal. The submission that the order for withdrawal of the permission having been passed on 29-1-1983 only, the recovery for the earlier periods is not justified, cannot be accepted.
9. In the result, we uphold the orders of the lower authorities and dismiss these appeals.