Customs, Excise and Gold Tribunal - Tamil Nadu
Salem Co-Operative Sugar Mills Ltd. vs Commr. Of C. Ex. on 13 September, 2005
ORDER T.K. Jayaraman, Member (T)
1. This is an appeal against Order-in-Appeal No. 118/98 dated 28-9-1998 passed by the Commissioner of Central Excise (Appeals), Trichy.
2. The appellants are the manufacturers of sugar, Consequent to the introduction of rebate for excess sugar production the appellants applied for sanetion of the rebate under Notification No. 135/83-C.E., dated 30-4-83. Initially a rebate of Rs. 5,74,954.76 was sanctioned to the appellants. However, the department realised that some error has crept in the calculation of average production of sugar. The adjudicating authority in his order dated 25-4-1996 confirmed duty demand of Rs. 5,61,964.68 under Section 11A of the Central Excise Act, 1944. The appellants approached the Commissioner (Appeals) who upheld the order of the lower authority. The appellants have come before this Tribunal challenging the impugned order-in-appeal.
3. Shri N. Prasad, Id. Counsel appeared for the appellants and Shri R.L. Meena, Ld. SDR for the Revenue.
4. Ld. Counsel accepted the fact that the Order-in-Appeal cannot be faulted on merits. However, he took us through the various letters received from the department and urged the point that the letter C.No. IV/16/490/04-RA.III dated 13-7-94 from the Collector's office decided the total rebate of Rs. 5,74,954.76. He submitted that originally when they filed rebate claim the base period was taken as 1978-79; 1979-80. The department in their letter dated 3-12-83 advised the appellant to revise their claim taking the base periods as 1979-80, 1980-81 and 1981-82. Accordingly, they furnished the particulars and revised the rebate claim. Consequently, the Collector finalised the rebate mentioned above vide letter dated 13-11-1994 addressed to the Asst. Collector, Salem with a copy to them. By doing so the Collector has decided their rights for receiving the rebate to the extent calculated. Ld. Counsel quoted a few Supreme Court's judgments and urged that this letter should be treated as an adjudication order and it could have been revised only by reviewing the Collector's order under Section 35E of the Central Excise Act. But what has happened is that the department issued a show cause notice dated 30-4-85 for recovery of the excess rebate granted. There was some mistake in calculating the rebate and also in taking the correct base period. After issue of show cause notice the lower authority issued order-in-original dated 25-4-96. This was followed by the impugned order-in-appeal dated 28-9-98. The main thrust of the Advocate's argument is that after the Collector has decided the issue it is not open for authorities lower in rank to the Collector to review his decision. Ld. SDR explained that the department has followed the correct procedure in recovering the excess rebate granted. He said that the orders sanctioning the rebate was not passed by the Collector. Once the mistake committed in granting excess rebate was discovered, show cause notice was issued within six months and recovery proceedings were initiated. Hence, he said that the appeal of the appellants has no merits.
5. We have gone through records of the case carefully. The objections raised by Id. Counsel with regard to the recovery of excess rebate has been squarely met in para 18 of the order-in-original which is extracted below.
18. The rebate claim was filed with the Assistant Commissioner and the amount claimed as rebate was sanctioned by the Assistant Commissioner only. The assessee have contended that rebate was sanctioned to them in Commissioner's C.No.lV/16/490/84 RA III dated 13-11-1984. But in the Commissioner's letter, M/s. Salem Co-operative Sugar Mills, Mohanur, have only been authorised to take credit of Rs. 5,74,954.76 in their PLA, as incentive rebate for the period from 1-5-83 to 30-9-83. The said letter does not state that Commissioner has sanctioned the rebate claimed. Section 11A of the Central Excises and Salt Act, 1944, empowers the Assistant Commissioner to recover any duty of excise not levied or short levied or short paid or erroneously refunded, within 6 months from the relevant date. In the present case the relevant date is the date of refund (rebate). Recovery of excess rebate sanctioned does not amount to review of the Assistant Commissioner's own order.
We are also of the view that the letter dated 13-8-84 is not an adjudicating order by the Collector. Any short levy can be recovered by issuance of show cause notice under Section 11A of the CE Act. The lower authorities have followed the correct procedure in recovering the excess rebate granted. On merits, the Ld. Counsel concedes that they have no case. Moreover, the SCN has been issued in time. The demand is not hit by time-bar. In these circumstances we do not find any merits in the appeal. The appeal is rejected.
(Operative portion of the order was pronounced in open Court on 13-9-2005)