1. These are two Show Cause Notices by the Government of India to the Respondents, which have been transferred to the Tribunal to be disposed of as appeals presented before it. This Order will dispose of preliminary objection taken up by the two respondents regarding limitation of the show cause notices issued by the Government of India proposing to review the consolidated order-in-appeal dated 5-4-1980, passed by Sh. M.G. Vaidya, Appellate Collector of Customs, Bombay.
2. Facts material for decision of the objection are that the two respondents, besides, one M/s. Thomson Press (India) Ltd., New Delhi (who is not party in the present appeals) filed appeals before the Appellate Collector of Customs, Bombay challenging the orders passed by the Assistant Collector of Customs, Bombay claiming that they were liable to payment of lower rate of duty. The Collector by his consolidated order despatched on 5-4-1980 accepted the appellants plea and partly allowed the respondents, appeals. Government of India, Ministry of Finance, Department of Revenue purporting to act under Section 131(3) of the Customs Act, 1962 (hereinafter the Act) issued notices dated 13-8-1981 to the present respondents and also to M/s.
Thomson Press calling upon them to show cause why findings of the appellate authority be not set aside or modified and such order as the Government deem fit be not passed (a copy of the show cause notice is not available in the file of M/s. Modi Spinning and Weaving Mills, but the same is available in the case of M/s. Bharat Vijay Mills). In the case of M/s. Thomson Press, it was earlier given out that the show cause notice was wrongly issued and the appeal has been disposed of accordingly. During arguments, it was given out that in the case of M/s. Modi Spinning Mills no duty has been paid by this respondent and that this respondent had executed a bond to satisfy the demand of duty which may ultimately be made. In the case of M/s. Bharat Vijay Mills, it was given out that this respondent had paid the duty demanded and that the order passed by the Appellate Collector of Customs Bombay resulted in refund to this respondent. This refund has not yet been made to this respondent.
3. At the hearing of the appeals, in support of their contention that the show cause notice dated 13-8-1981 proposing to review the appellate order dated 5-4-1980 issued beyond one year of the date of the order was dearly timebarred, it was submitted that though the notice purported to be issued under Section 131 (3) of the Act but in reality it was a notice under Sub-Section (5) of the Act which fixed the time-limit set out under Section 28 of the Act [under Section 28 (1) (b) of the Act, which should be applicable to the present case, the time-limit is 6 months]. Under the proviso, in case of collusion, wilful mis-statement or suppression, the time limit is 5 years. It is no-body's case that this is a case of wilful mis-statement or suppression of facts or that in any case 5 years limit would be applicable). Sh. Ravindra Narain, learned Advocate submitted that Section 131 (5) is para meteria with 3rd Proviso to Section 36(2) of the Central Excises and Salt Act, 1944. These provisions clothed the Central Government with revisionary powers, he submitted that while the proviso under the Excise Act was also applicable to erroneous refund and the time-limit referred to that specified in Section 11A of the Act, in sub-Section (5) of Section 131 of the Act there was no reference to erroneous refund and Section 28 was mentioned. Parties agreed that Section 28 of the Act and Section 11A of the Central Excises and Salt Act, 1944 so far as time limit was concerned are material, the same. Sh. Ravindra Narain, learned Advocate argued that having regard to Delhi High Court decision in Associated Cement Cos.
Ltd. v. Union of India-1981 E.L.T. 421 (Delhi), the time-limit of 6 months would be applicable to the show cause notice to be computed from the date of order sought to be revised. He strongly contended that in view of this decision, the show cause notice issued to his clients M/s.
Modi Spinning & Weaving Mills was clearly barred by limitation.
4. Shri M.A. Rangaswamy, learned Advocate for the respondent M/s.
Bharat Vijay Mills Ltd. adopted the arguments of Sh. Ravindra Narain, learned Advocate for M/s. Modi Spinning & Weaving Mills Co. He however submitted a new argument in support of the plea that the Show Cause Notice was time-barred. The argument is that Section 131 of the Customs Act, 1962 no more exist in the Statute Book, as a completely new chapter has been substituted in place of the old chapter. The present proceedings are an appeal before the Tribunal and the time limit provided for an appeal would be applicable to the show cause notice.
The time-limit is 3 months and this would be applicable to the show cause notice. The show cause notice is therefore completely timebarred.
He however added that it was open to the Tribunal to condone the delay in issue of show cause notice which is now an appeal before the Tribunal, having regard to the circumstances of the case. His argument thus in short is that the time-limit provided for an appeal under sub-Section (3) of Section 129A of the Customs Act, 1962 as substituted by Finance Act, 1980 should be retrospectively applied to the present show cause notice. In support of his argument, Sh. M.A. Rangaswamy, learned Advocate relied on Amin Chand Pyara Lal v. Collector of Central Excise, Chandigarh-1984 (16) E.L.T. 126 Tribunal). In this decision, the Tribunal held that the provision regarding prior deposit of duty and penalty demanded contained in Section 35F of the Central Excises and Salt Act, 1944 would be applicable to all appeals filed before the Tribunal on or after 11-10-1982 and the said provision was retrospectively applicable even to cases where cause of action leading to appeal arose before 11-10-1982, i.e. the date when Section 35F of the Central Excises and Salt Act, 1944 came into force.Geep Flash Light Industries v. Union of India and Ors.-1983 E.L.T. 1596 submitted that the show cause notice in case of appellants M/s. Vijay Mills was not time-barred as Section 131 (5) of the Customs Act, 1962 was not applicable in the case of erroneous refund. About the other respondent M/s Modi Spinning and Weaving Mills, Sh. V. Lakshmi Kumaran submitted that in this case the respondent had not paid duty and has executed a bond to pay duty that may ultimately be demanded. Differential duty thus could be demanded even now and even after the goods were cleared, therefore, the show cause notice could never be said to be time-barred.
Besides, the show cause notice did not relate to a demand but only proposed to alter the heading of an assessment. In such a case, it could not be said that there was short levy or non-levy. He also submitted that the Delhi High Court's decision relied on by respondent M/s. Modi Spinning and Weaving was not applicable to the present case because provisions of Section 131(5): of the Customs Act, 1962 and 3rd proviso to Section 36(2) of the Central Excises and Salt Act, 1944 were not pan materia. He submitted that while the Central Excises and Salt Act, 1944 and Rules made thereunder talk of levy and collection of duty, Section. 12 of the Customs Act, 1962 only talks of duty of Customs being levied. He submitted that Delhi High Court decision in M/s. Associated Cement Company's case was not applicable to the case and could not be pressed in aid for respondent M/s. Modi Spinning & Weaving Mills Co.
6. We may first deal with Sh. M.A. Rangaswamy's argument regarding limitation for an appeal provided under Sub-section (3) of Section 129A of the Customs Act, 1962 being applied to the present show-cause notice which has been transferred to the Tribunal to be disposed of as an appeal presented before it. Sh. Rangaswamy's argument overlooks the provision contained in Sub-section (2) of Section 131-B, which provides that every proceeding which is pending immediately before the appointed day before the Central Government under Section 131 as it stood immediately before the day and any matter arising out of or connected with such proceedings and which is so pending shall stand transferred on that day to the appellate Tribunal and the Appellate Tribunal may proceed with such proceedings or matter from the stage on which it was on that day as if such proceeding or matter were an appeal filed before it. Having regard to these express words about the Appellate Tribunal proceeding with such proceedings or matters from the stage at which it was on that day i.e.. 11-101982 before the Central Government, there is no question of applying retrospectively the limitation provided for an appeal in sub-Section (3) of Sec, 129A of the Customs Act, 1962. We do not accept Sh. Ramgaswamy's argument.
7. Taking up first the case of M/s. Bharat Vijay Mills, admitted position is that this appellant, had deposited the duty demanded and the Appellate order passed by the Appellate Collector of Customs, Bombay entitles this appellant to" get refund. Limitation under Sub-section (5) of Section 131 of the Customs Act, 1962 is not applicable to erroneous refund. Case of this appellant is on all fours with Supreme Court decision in Geep "Flash Light Industries v. Union of India and Ors.-1983 E.L.T. 1596. Applying the decision to the case of this appellant the show cause notice cannet be held to be timebarred.
The objection in so far as this appellant is concerned is rejected.
8. The words levy or short levy are subject-matter of interpretation in three decisions :Assistant Collector of Central Excise v. National Tobacco Co,-AIR (2) N,B. Sanjanav. The Elphinstone Spinning, and Weaving Mills Ca.
Ltd.-im E.L.T. J 399; andTrtveni Sheet Glass Works Ltd. v. Union of India and Ors.-1983 E.L.T.Extensive extracts from these decisions need not be reproduced. It is sufficient to say that in paragraph 20 of M/s. National Tobacco Company's case, the Supreme Court inter alia observed "We think that, although the connotation of the term "levy" seem wider than that of "assessment", which it includes, yet, it does not seem to us to extend to "collection". In paragraph 21 of the judgment, the Supreme Court also held that "moreover, it is a process of assessment that really determines whether the levy is short or complete. In Triveni Sheet Glass Works Ltd. v. Union of India and Ors. (Supra) the Allahabad High Court after taking note of the two Supreme Court decisions held as under: "Cases where the assessment made by the authorities results either in nil assessment or in such assessment which in consequences of subsequent proceedings taken under the Act is found to be less than the duty payable under the law are cases where duty can be said to have been short levied." In view of these precedents, Sh. V. Lakshmi Kumaran's argument that because duty has not been paid by respondent M/s. Modi Spinning and Weaving Mills or not collected from them it cannot be said that any levy has taken place and there is no question of short-levy or non-levy, cannot be accepted because levy does not include collection.
His argument further is that Section 12 of the Customs Act, 1962, talks only of levy and not of collection of duty as does the Central Excises and Salt Act and rules made thereunder cannot also be accepted because even though in Section 12 of the Customs Act the word 'collection' may not have been used, we find that the Act makes elaborate provision for 'assessment' and 'collection' of duty. To us it appears that for the purposes of Sub-section (5) of Section 131 of the Customs Act, 1962 as it then existed the words not levied or short levied should be interpreted to mean nil duty assessment or short assessment of duty excluding however a case of erroneous refund. Thus viewed, there can be no doubt that the order which is sought to be revised would be clearly a case of short-levy because there is no dispute that there is an order of assessment under Sec. 17 of Customs Act and this would result in short duty being collected from the respondent M/s. Modi Spinning & Weaving Mills. It is immaterial whether the assessment to duty is in respect of goods entered for home consumption under Section 46 or for warehousing under Section 68 of the Customs Act. "Assessment" under the Customs Act [vide S.2(2)] "includes provisional assessment, reassessment and any order of assessment in which duty assessed is nil". We do not agree with Sh. Lakshmi Kumaran's argument that 3rd proviso to Section 36(2) of the Central Excises and Salt Act, 1944 as it then existed and Section 131(5) of the Customs Act, 1962 are not pan material. We find that in substance they are so. We also find that Delhi High Court's decision in M/s. Associated Cement Companies (Supra) would be applicable to the present show cause notice.
9. It may be mentioned that though the show cause purported to be under Sub-section (3) of Section 131 of the Customs Act, 1962 as it then existed under which there was no limitation about Revisionary powers of Government. Sh. Ravendra Narain, learned Advocate submitted that the notice in substance was under Sub-section (5) of Section 131 of the Customs Act, 1962. Sh. V. Lakshmi Kumaran for the appellants did not attempt supporting the show cause notice as being one under Sec. 131(3) of the Act. Relying on Delhi Court decision (Supra) and also a Division Bench Judgment of Bombay High Court in the case of M/s. Corn Products India Ltd. and" Ors. v. Union of India and Ors.-1984 (16) E.L.T. 177 Bombay we hold that the show cause notice issued by Government of India was barred by limitation. Preliminary objection as to limitation raised by respondent Mis. Modi Spinning and Weaving Mills is accepted and the show cause notice against them dropped. Objection however of respondent M/s. Bharat Vijay Mills is not accepted and is rejected. The Show Cause notice issued against them would be proceeded with as an appeal and decided in accordance with law. Ordered accordingly.
A.J.F. D' Souza, Member (T) 10. I agree with my learned brothers in so far as the appeal of M/s.
Bharat Vijay Mills Ltd. is concerned and the appeal is accordingly rejected. I agree with my learned brothers insofar as the appeal of M/s Bharat Vijay Mills Ltd. is concerned and the appeal is accordingly rejected.
11. As regards the appeal of M/s. Modi Spinning and Weaving Mills Co.
Ltd., I find force in the arguments advanced by the learned Departmental Representative. While it is true that an assessment is made under Section 17 at the time goods are warehoused on an into bond bill of entry filed under Section 46 (1), it is nevertheless true that a fresh Bill of Entry has to be filed at the time of clearance for home consumption on payment of duty and the goods will be re-assessed to duty, if necessary, in terms of the provisions of Sections 68(a), 46(1) and 17 read with the definitions of Sec. 2(2) of Customs Act. This being so, the question of short-levy can arise only when the assessment for purposes of quantifying the duty to be paid by the assessee has been finalised and the duty has been paid after a home consumption Bill of Entry is filed.
12. In this case, the Government of India seeks a review of the decision regarding the rate of duty and this review notice has been issued within one year from the date of the order proposed to be reviewed. It is, therefore, well written the time-limit prescribed in Section 131, in my opinion.
13. Besides, to deal with these two cases differently would be to make an invidious distinction. Merely because in one case duty was paid and the matter was agitated, the party should not be at a disadvantage vis-a-vis another party, who chooses not to pay duty or have the goods cleared for home consumption. Even the law as interpreted above does not seem to provide for this. In the circumstances, I would respectfully differ from my learned brothers and reject this appeal also.