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Premier Tyres Limited Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1986)(6)LC80Tri(Chennai)
AppellantPremier Tyres Limited
RespondentCollector of Central Excise
Excerpt:
.....is sought to be given by the notification is a set off representing a sum equal to the quantum of duty paid on the tyre cord fabrics, while removing other finished goods manufactured therefrom. in view of this, section 11 a. would not seem to have any application. we are strengthened in our view when we refer to analogous provisions in respect of proforma credit permitted under rule 56a of the central excise rules, 1944. rule 56a specifically provides that where credit has been allowed on account of the various factors set out therein, recouping of such credits allowed wrongly has to be done after serving a notice on the manufacturer within 6 months (or 5 years as the case may be), from the date when such credit has been allowed. obviously the absence of such a provision in the.....
Judgment:
1. In this proceeding, the appellant assails order dated 27-7-1984 of the Collector of Central Excise (Appeals), who in turn had upheld Order C. No. V/68/30/77/83/4080 dated 27-4-1984 passed by the Assistant Collector of Central Excise, Ernakulam I Dn. In his order the Assistant Collector has disallowed a credit of Rs. 56,128.50 taken on 14-7-1980 by the appellant in R.G. 23-Part II Register in terms of para 4 of the Appendix to Notification No. 201/79, dated 4-6-1979, as amended, in respect of tyre cord fabrics received by the appellant-firm from Shriram Rayons, manufacturers of such fabrics. The fabrics had been received by the appellant factory at a time when no duty was paid by Shriram Rayons, treating the goods as rayon fabric for purposes of excise levy. Later on, by a Trade Notice dated 24-6-1978 it was clarified that the goods would be liable to duty under Item 68 of the C.E.T. A demand was made on Shriram Rayons who paid the sum involved from 19-1-1980 in respect of clearances from 13-6-1978 to 27-6-1978. On coming to know of the payment of duty by Shriram Rayons, credit was taken by the appellant on 14-7-1980 in respect of goods received long ago. In coming to final decision the Assistant Collector has observed that the procedures set out in the notification, such as giving intimation to the Department, verification of the goods with reference to the documents of transport etc., has not been done-in fact could not have been done-as at the relevant time tyre cord fabrics were not subjected to any effective levy of excise duty. For failure to follow the procedures laid down in Notification No. 201/79, and in terms of para 4 of the Appendix to the Notification, the Assistant Collector made the impugned demand. The learned advocate for the appellants cited a decision of the West Regional Bench of this Tribunal in Appeal No.ED(BOM) 15 of 1983 dated 5-7-1983-in the case of Finolex Cables Ltd., Pune v. Collector of Central Excise, Pune-1983 ECR 2047D (Cegat) wherein in somewhat similar circumstances the Bench had held that the provisions of Section 11A of the Central Excises and Salt Act, 1944 would be applicable. Unfortunately the basis on which such a finding has been given has not been elaborated in the judgment.

2. Prima facie we are of the view that the provisions of Section 11A would not be applicable to a situation of the type under consideration.

Notification No. 201/79 specifically provides for recouping credits taken by a manufacturer wrongly. There is no reference in the notification to any time limit within which action has to be taken by the Department to recover the sum. Section 11A refers to duty of excise that has not been levied or that has not been paid or has been short levied or short paid or erroneously refunded. In the present case the sum in question is not a duty of excise that has not been levied or not paid or short levied or short paid or erroneously refunded. What is sought to be given by the notification is a set off representing a sum equal to the quantum of duty paid on the tyre cord fabrics, while removing other finished goods manufactured therefrom. In view of this, Section 11 A. would not seem to have any application. We are strengthened in our view when we refer to analogous provisions in respect of proforma credit permitted under Rule 56A of the Central Excise Rules, 1944. Rule 56A specifically provides that where credit has been allowed on account of the various factors set out therein, recouping of such credits allowed wrongly has to be done after serving a notice on the manufacturer within 6 months (or 5 years as the case may be), from the date when such credit has been allowed. Obviously the absence of such a provision in the notification would indicate the legislative intent that in the case of Notification No. 201/79, no time limit is contemplated. As however there is a decision of the West Regional Bench holding to the contrary, we direct that the papers be placed before the President to consider the constitution of a larger Bench to hear this appeal.


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