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Collector of Customs and Central Vs. Kasturi Paper, Foods and - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1985)(22)ELT510Tri(Chennai)
AppellantCollector of Customs and Central
RespondentKasturi Paper, Foods and
Excerpt:
1. appeal under section 35b of the central excises and salt act, 1944 praying that in the circumstances stated therein, the tribunal will be pleased to set aside the order of the collector of central excise (appeals), madras, dated 10-7-1984 in no. 57/84(b) (d) and to direct the respondent herein to pay back rs. 36,373.44 erroneously refunded by the assistant collector of central excise, mysore.2. this appeal coming up for orders upon perusing the records and upon hearing the arguments of shri j.m.k. sekhar, senior departmental representative for the appellant and upon hearing the arguments of shri k.p. jagadeesan, advocate for the respondent, the tribunal makes the following order : 3. this is an appeal against the order of the collector of central excise (appeals), madras, dated.....
Judgment:
1. Appeal under Section 35B of the Central Excises and Salt Act, 1944 praying that in the circumstances stated therein, the Tribunal will be pleased to set aside the order of the Collector of Central Excise (Appeals), Madras, dated 10-7-1984 in No. 57/84(B) (D) and to direct the respondent herein to pay back Rs. 36,373.44 erroneously refunded by the Assistant Collector of Central Excise, Mysore.

2. This appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri J.M.K. Sekhar, Senior Departmental Representative for the appellant and upon hearing the arguments of Shri K.P. Jagadeesan, Advocate for the respondent, the Tribunal makes the following order : 3. This is an appeal against the order of the Collector of Central Excise (Appeals), Madras, dated 10-7-1984 rejecting the appeal filed by the Assistant Collector of Central Excise, Legal, Bangalore. The Collector of Central Excise, Bangalore is the appellant before me. It is contended that an excess refund of duty paid by the respondent was demanded by the authorities as detailed hereunder :Date of receipt Refund Period to which Date of sanctionof the claim amount refund pertains and amount1. 6-10-1981 Rs.15,840.40 1-8-1981 to 31-8-1981 26-2-1982/Rs. 15840.402. 17-10-1981 Rs.11,759.14 1-9-1981 to 30-9-1981 26-2-1982/Rs. 11759.143. 25-11-1981 Rs. 8,773.90 1-10-1981 to 31-10-1981 26-2-1982/Rs. 8773.90 In order to recover the excess amount of excise duty refunded to the respondent, the Collector of Central Excise, Bangalore exercised the suo moto revisional powers under Section 35E(2) of the Central Excises and Salt Act, 1944 and directed his subordinate authority to prefer an appeal before the Collector of Central Excise (Appeals), Madras, relating to the recovery of the erroneously refunded amount. The Collector of Central Excise (Appeals) dismissed the appeal before him under proviso to Section 35A on the ground that inasmuch as no show cause notice in respect of the erroneously refunded amount was given within the statutory time limit of six months specified under Section 11A of the Act, the appeal itself was incompetent. Aggrieved against this order the Collector of Central Excise, Bangalore has come by way of an appeal before the Tribunal.

4. The learned Senior Departmental Representative submitted that the suo moto powers of revision exercisable by the Collector within the statutory period of two years cannot be set at naught or nullified by a six months statutory period prescribed under Section 11A in respect of claiming back erroneously refunded amount. In other words, it was urged that the period of limitation incorporated under Section 11A will have to be harmoniously interpreted with the revisional powers of the Collector exercisable within a period of two years under Section 35E(2) or 35A under the old Act.

5. I have considered the submissions of the parties herein. In the instant case, it is not disputed that the order of refund was passed by the authorities on 26-2-1982 and the refund amount was actually disbursed on 2-3-1982. In respect of the erroneously refunded amount on 2-3-1982, the suo moto power of revision exercisable by the Collector of Central Excise, as the law then stood under Section 35A of the Central Excises and Salt Act, 1944 (since repealed), will have to be construed in juxtaposition with the specific period of limitation incorporated under Section 11A of the Central Excise and Salt Act.

Section 35A of the Central Excises and Salt Act which came into effect by virtue of amendment Act 25 of 1978 reads as under : "Section 35A. Revision by Board or Collector.-(1) The Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) (hereinafter referred to as the Board) may, of its own motion or otherwise, call for and examine the record of any proceeding in which any decision or order has been passed under this Act or the rules made thereunder by a Collector of Central Excise (not being a decision or order passed on appeal under Section 35) for the purpose of satisfying itself as to the correctness, legality or propriety of such decision or order and may pass such order thereon as it thinks fit.

(2) The Collector of Central Excise may, of his own motion or otherwise call for and examine the record of any proceeding in which any decision or order has been passed under this Act or the rules made thereunder by a Central Excise Officer subordinate to him (not being a decision or order passed on appeal under Section 35) for the purpose of satisfying himself as to the correctness, legality or propriety of such decision or order and may pass such order thereon as he thinks fit.

(3) (a) No decision or order under this Section shall be varied so as to prejudicially affect any person unless such person is given a reasonable opportunity of making a representation and, if he so desirous, of being heard in his defence.

(b) Where the Board or, as the case may be, the Collector of Central Excise is of opinion that any duty of excise has not been levied or has been short levied or erroneously refunded, no order levying or enhancing, the duty, or no order requiring payment of the duty so refunded, shall be under this Section unless the person affected by the proposed order is given notice to show cause against it within the time limit specified in Section 11 A. (4) No proceedings shall be commenced under this Section in respect of any decision or order [whether such decision or order has been passed before or after the commencement of the Customs, Central Excises and Salt and Central Boards of Revenue (Amendment) Act, 1978] after the expiration of a period of one year from the date of such decision or order." It is clear that the power of revision is exercisable by the Collector of Central Excise under Clause (4) of Section 35A suo moto on grounds of correctness, legality or propriety of an order passed by an officer subordinate to him within a period of one year from the date of such order or decision. Therefore, as on 2-3-1982 when according to the Department an erroneous refund had actually been made in favour of the respondent and when ordinarily the Department would not be entitled to claim it back beyond the period of limitation of six months contained under Section 11A of the Act, even assuming for the moment that the Department would have power to claim the amount back by exercise of the suo moto revisional powers under Section 35A of the Act, even then his action is barred by limitation because admittedly the Department sought to revise the order of the subordinate authority by a review only on 11-4-1984.

6. Section 35A referred to above was repealed and Section 35E came into existence with effect from 11-101982. Section 35E reads as under : "Section 35E. Powers of Board or Collector of Central Excise to pass certain orders :(1) The Board may, of its own motion, call for and examine the record of any proceeding in which a Collector of Central Excise as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order direct such Collector to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order.

(2) The Collector of Central Excise may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority to apply to the Collector (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Collector of Central Excise in his order." 7. Section 35E is not made retrospectively applicable. A retrospective application of a provision of law must be either express or must be deducible by way of a necessary implication or intendment. Even assuming for the purposes of argument that Section 35E is procedural in nature and therefore retrospective in operation inasmuch as it trenches upon the substantative right created under Section 11 A; Section 35E(2) cannot be considered to be retrospective in operation unless it is made clear expressly or by necessary implication. A substantive right cannot be whittled down by retrospective application of a procedural power unless there is a clear warrant for the same expressly or by necessary implication. If the rights created under Section 35E(2) of the Act are substantive and not merely procedural Section 35E(2) and Section 11A will have to be construed without any repugnancy, But this question is purely academic in the context of the facts of this case and therefore I make it clear that I am not called upon to decide this issue and pronounce upon the question as to whether the powers of revision conferred on the Collector under the present Section 35E(2) will be subject to the period of limitation under Section 11A of the Act or vice versa. Suffice it to say, in (he instant case, having regard to the admitted fact that even the power of review that was available to the Collector under law, as it then stood under Section 35A referred to supra, was barred by the period of limitation, the very basis of the review order will not be legally sustainable. In this view of the matter I find that there is no merit in the appeal and the appeal is accordingly dismissed.


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