Customs, Excise and Gold Tribunal - Delhi
Bharat Sugar Mills Ltd. vs Collector Of Central Excise on 22 June, 1992
Equivalent citations: 1992(39)ECC93
ORDER
G.A. Brahma Deva, Member
1. This is an appeal preferred against the order-in-appeal dated 31-7-82 passed by the Appellate Collector of Central Excise, Calcutta.
2. The appellants are engaged in the business of manufacturing sugar. Central Excise duty on the manufacture of sugar is leviable under item No. 1 of the First Schedule of the Central Excises & Salt Act, 1944. The issue relates to actual rate of duty for levy sugar produced in 75-76 and cleared between the period 3-8-76 to 13-9-76. The appellants cleared the sugar at concessional rate in terms of notification Nos. 223/76 dated 3-8-76, 226/76 dated 6-8-76, 246/76 dated 31-8-76 and 251/76 dated 14-9-76. The sum of [and?] substance of all these notification taken together is that the quantity of levy sugar produced in 75--76 would be assessable at 10% ad valorem basic excise duty @ 5% ad valorem additional excise duty.
3. The Assistant Collector, while rejecting the contention of the appellants, observed that the above notifications have been held to be invalid by the Ministry of Law on the basis of reference by the Auditor General of India on the ground that the Govt. is not empowered under Rule 8(1) to issue notification or amending notification with retrospective effect. Now, all these notifications issued in August--September, 1976 prescribe concessional rate of duty for sugar produced in 1975--76 with retrospective effect. Hence, these are to be treated as invalid and rate of duty prevailing prior to issue of these notifications should prevail. Accordingly, he confirmed the demand. The Appellate Collector, while upholding the view of the Assistant Collector, observed that notification 226/76 is ultravires the Central Excise Rules & no benefit can be granted on the basis of notification which violates the central excise law. Since the appellants have become unsuccessful before the Appellate Collector, they have come before us by way of this appeal.
Arguing for the appellants, Shri Krishan Kumar, Ld. Advocate submitted that generally notification will come into force from the date of its issue and exemption specmea therein could be applicable prospectively. But there is no prohibition in law in granting exemption retrospectively and he referred to the decision in the case of Sylvania and Laxman Ltd. v. Union of India and Anr. wherein it was held that there is no prohibition in the. government issuing a notification with retrospective effect whereby benefit is given to a citizen. It may be that a notification with retrospective effect cannot be issued withdrawing a concession already given. He contended that since subsequent notification amended by advancing the date of commencement of exemption period, there is nothing wrong in claiming the exemption, in view of the notification with retrospective effect. Reliance was placed by him in the case of Kishan Sahakari Chini Mills Ltd., Rasra v. Union of India and Ors. reported in 1983 E.L.T. 2255 (All.) in support of his contention that since none of the subsequent notifications sought to amend the rates mentioned in the first notification 223/76 but its period from 1st Oct., 75 to 30th Sept., 1976, the same observation would be applicable to the subsequent notification as in the case of notification No. 223/76. He also argued that the authorities constituted under the Act, being a creature of the very statute, cannot hold that Notification is invalid, relying upon the ratio of the decision in the case of K.S. Venkataraman & Co. v. State of Madras - 1966 ITR Vol 60 - pg. 12. He said that the Govt. of India also issued a circular bearing No. 30/76-CXI dated 12-8-76 clarifying that the intention of the Government was to apply the concessional rate of duty to levy sugar cleared out of the production of 1975--76 would be entitled to the reduced rate of duty.
4. Smt. J.M.S. Sundaram, Ld. S.D.R., while countering the arguments, justified the action of the department in denying the benefit of exemption under Notifications 246/76 dated 31-8-76 and 251/76 dated 14-9-76. She said that benefit of exemption cannot be extended retrospectively by amending the notification and the notification No. 226/76, which prescribed the period for the first time was also superseded by the notification 251/76 dated 14-9-76. She said, based upon the opinion, given by the Ministry of Law, that Govt. is not empowered under Rule 8(1) to issue notification or amending notification with retrospective effect, the subsequent notifications prescribing concessional rate with retrospective effect, are to be treated as invalid and, accordingly, the appellants are not entitled for concessional rate of duty.
5. We have carefully considered the arguments advanced on both sides and perused the records. The Assistant Collector had come to the conclusion that notification prescribed concessional rate of duty with retrospective effect is to be treated as in-valid based upon the opinion given by the Ministry of Law. Neither copy of the opinion was placed on record nor we find contents of the said opinion. In fact, it has been the contention of the appellants before the Collector (Appeals) that opinion of the Law Ministry has not been made available to them and no opportunity was given to them to make representation with regard thereto. Similarly, apart from other contentions, the appellants' representative also urged that intention of the Govt. can be gathered from Circular No. 30/76-CX I dated 12-8-76 issued by the Govt. of India but same was not placed before us. In the absence of these two documents, we are left with no alternative but to decide the issue based upon the submissions and available material on record.
6. The first notification No. 223/76 dated 3-8-76 exempts the excise duty and additional duty in excess of 10% and 5% respectively without mentioning anything about the period of production. The second notification 226/76 dated 6-8-76 exempts only sugar produced on or after the commencement of the notification viz. 6-8-76 to 30-9-76. This period was changed by advancing the date of commencement of exemption period from 6-8-76 to 1st day of October, 1975 by notification No. 246/76 with words "cleared". It is seen from the records that the sugar, in question, was cleared during the period 4-8-76 to 13-9-76 and sugar was procured during the sugar year of 1975 to 1976. The contention of the party is that sugar manufactured during any period and cleared as levy sugar during August 3, 1976 to August 5, 1976 was liable to concessional rate of duty as per first notification 223/76 and sugar manufactured during the period from October 1, 1975 to Sept., 1976 and cleared during the said period was liable to concessional rate of duty under subsequent notification. According to the Department, in spite of the existing notification No. 223/76 dated 3-8-76, the Government issued the second notification No. 226/76 dated 6-8-76, therefore, the sugar produced during the period from 6th August, 76 to 30th Sept., 76, is obviously, not covered by the first notification No. 223/76. The appellants could not avail exemption on clearance prior to 6-8-76. Further, it was contended that notification 226/76 is on exemption based on production and time cannot be extended with retrospective effect. Such exemption is contrary to excise law and ultravires the Central Excise Rules.
7. The authorities below have denied the benefit of exemption only on the sole ground that notification 226/76 dated 6-8-76 is contrary to excise law since it extends the benefit of concessional rate on sugar produced with retrospective effect. But the validity of the exemption notification cannot be decided by the authorities constituted under the very statute. It is settled law that authorities including Tribunal created by a statute cannot question the vires of the statute or any other provisions thereof whereunder they function, as it was rightly argued by the Ld. Counsel for the appellants.
8. In view of our foregoing conclusion, we set aside the impugned order and, accordingly, appeal is allowed with consequential relief.