1. These two appeals were heard together as common questions of fact and law arise for determination in both the appeals. Show Cause Notices had been issued to both appellants following Finance Bill, 1982 under Clause 52 whereof the provisions thereunder shall be deemed to prevail and to have always prevailed over all notifications issued on or after 19-6-1980 but before 23-2-1982 and all duties of excise levied, assessed or collected or purporting to have been levied, assessed or collected on or after 19-6-1980 but before 23-2-1982 on matches shall be deemed to be and shall be deemed to have always been as validly levied, assessed or collected. Following the said Show Cause Notices adjudication was held and under Order dated 18-11-1982 (in the case of Kaipully Match Industries) and Order dated 17-11-1983 (in the case of Mayyanand Panchayat Co-operative Society Ltd.) the demands were confirmed for payment of differential duty as mentioned in the Show Cause Notices. The appeals against the said orders were dismissed by the Collector of Central Excise (Appeals), Madras under Order dated 6-4-1983 (in the case of Kaipully Match Industries) and Order dated 17-10-1984 (in the case of Mayyanand Panchayat Co-op. Society Ltd.). It is against the said orders that the present appeals have been preferred.
2. We have heard Shri K.V. Kunhikrishnan, Consultant for both appellants and Shri K.C. Sachar, Junior Departmental Representative, for the respondent Collector.
3. Though in the appeals submissions have been raised with reference to the vires of the provision introduced under the Finance Bill of 1982, Shri Kunhikrishnan stated that he was not advancing any arguments with reference thereto as this Tribunal could not go into that matter. But the substantial contention raised by him was that the demand, in any event, in both instances, could not be enforced without reference to the period of limitation prescribed in the Central Excises and Salt Act, irrespective of the provision for retrospective application under Section 52 of the Finance Bill. It may be noted that this question of limitation had been raised by the appellants before the lower authorities also but had been rejected by them. It is, therefore, this consideration that has to be mainly considered in the present appeals.
4. After the hearing of the appeals on 5-6-1985 a doubt had been raised whether the appellants in the two appeals were covered by the orders passed by the Madras High Court in the case of Devi Match Factory and Others v. Superintendent of Central Excise, Sattur [1983 E.L.T. 99 (Mad.)] or in any other case, directing the benefit of notification No.99 of 1980 to be given without reference to the provisos 1 and 2 to that notifications. Shri Kunhikrishnan has confirmed that the appellants were not covered by the orders mentioned in the above-mentioned case or in any other similar case.
5. Shri Kunhikrishnan contended that irrespective of the terms of Section 52 of the Finance Bill, 1982 abovementioned, the department cannot extend the demand without reference to the provisions regarding limitation as contained in the Central Excises and Salt Act. He therefore contended that the confirmation of the whole of the demand in the two cases as mentioned in the respective Show Cause Notices was not proper or legal. In support of his contention he relied upon the decision of the Delhi High Court in J.K. Cotton Spinning and Weaving Mills v. Union of India (1983 E.L.T. 239 Delhi) and the decision of the Bombay High Court in B.K. Paper Mills Pvt. Ltd. v Union of India [1984 (18) E.L.T. 701 Bombay]. Shri Sachar, no doubt, contended that the decision of the Delhi High Court in the J.K. Cotton Spinning and Weaving Mills is now under appeal to the Supreme Court but that, in our opinion, would not make any difference as to the binding nature of the said decision (as well as the decision of the Bombay High Court) so far as this Tribunal is concerned, in the absence of any contrary decision of any other High Court.
6. The provision under consideration in the Delhi High Court decision was Section 51 of the Finance Act, 1982. The provision was similar to the provision in Section 52. The contention under consideration before the Delhi High Court was whether the retrospective legislation under Section 51 would enable demands to be raised for the entire period of retrospective legislation, without reference to the period of limitation otherwise provided in the Central Excises and Salt Act. In construing this contention the High Court observed in paragraph 28 as follows : "28. In our view, Rules 9 and 49 must be deemed to have been enacted in the rules from 1945. This would mean that duty had to be levied and collected in accordance with the provisions of the Act and the rules from 1945. Section 51 of the Finance Act does no more than this, besides making the penal provisions inapplicable for past transactions. It does not touch any of the other provisions of the Act or the rules. This means, that levy, collection, assessment of penalties etc. would all have to be done in accordance with the provisions of the Act and the rules as in force from time to time.
Prior to the enforcement of Section 11 and 11B of the Act with effect from November 17, 1980 by the Amending Act 25 of 1978, the limitation for recovery of duty not levied or not paid or short levied or short paid or erroneously refunded on the one hand and claim for refund of duty on the other were covered by rules in this regard, adverted to by us earlier. Thereafter, recoveries and refunds are covered by the provisions of Sections 11A and 11B. We cannot pursuade ourselves to accept the argument of the learned Solicitor General that Section 51 of the Finance Act over-rides the effect of Sections 11A and 11B of the Act. The particularisation by Section 51 of the Finance Act cannot have the effect of repealing Sections 11A and 11B of the Act. The excise authorities had no power to levy and collect duty on 'in-process' goods and this is what seems to have been remedied by the amendment of the rules. We cannot read Section 51 of the Finance Act to mean that the levy and collection can be made for past deemed clearance by ignoring the other provisions of the Act and the rules. We also cannot accept the learned Solicitor General's argument that Section 51 of the Finance Act should be read as limited to actions postulated by Clauses (a) and (d) only and not permit levy of penalties etc. We, however, agree with the argument that no prosecution for past alleged breaches can now be ordered." Similarly, in considering the provisions of Section 47 of the Finance Act, 1982 (similar to provisions in Section 52), the Bombay High Court observed in paragraph 27, following the Delhi High Court, as followsJ.K. Cotton Spinning and Weaving Mills and Another v. Union of India and Ors. reported in 1983 E.L.T. 239 (Del.) a Division Bench of the Delhi High Court, considered another amendment made in the Central Excises and Salt Act, 1944 by the same Act, namely, the Finance Act of 1982. The amendment which was required to be considered by the Delhi High Court also contained in the Amendment Act as saving clause with a sub-section identical with Sub-section (2) (d) in the saving clause to Section 47 of the Finance Act, 1982. The Delhi High Court has held that this provision means that levy, collection, assessment of penalties etc. would all have to be done in accordance with the provisions of the Act and the rules as in force from time to time. The period prescribed for such collection, either in the Act or in the rules, continues to operate and the provisions of Sections 11A and 11B continue to apply to such recoveries and levies also. I am in respectful agreement with the view taken by the Delhi High Court. To hold otherwise would also invite a challenge to the retrospective amendment itself. It would amount to saying that as a result of the retrospective amendment, the assessees can be called upon to pay taxes retrospectively as from 1975. It would make the provisions open to challenge on the ground of arbitrariness and unreasonableness. Such an interpretation is not warranted. The amendment does not affect the application of other provisions of the Act. Hence the amendment does not violate Article 19 (1) (g) of the Constitution.
In the premises the petition is dismissed with costs and the rule is discharged." 7. In view of the above-said judgments of the two High Courts, and in the absence of any other judgment of any other High Court to the contrary, we respectfully follow the above decisions. We therefore hold that in enforcing the demand under the two Show Cause Notices the department was bound by the period of limitation prescribed under Section 11A of the Central Excises and Salt Act and could therefore enforce the demand only for the period mentioned in the said Section 11 A. That would mean that the period of the demand could extend to the period of six months only preceding the dates of the Show Cause Notices after taking into consideration the "relevant dates" as defined in Section 11A of the Central Excises and Salt Act. The appeals are accordingly allowed to the extent of granting relief to the appellants in the manner indicated above.