1. This is a revision application filed before the Central Government, which, under section 35P(2) of the Central Excises and Salt Act, 1944, stands transferred to the Tribunal to be disposed of as if it were an appeal presented before the Tribunal.
2. In this appeal the appellants challenged the validity of the impugned order of the Collector on four main grounds : - (i) The Show Cause Notice was issued by the Collector on 7-6-80 whereas the order sought to be reviewed therein was passed by the Assistant Collector on 21-7-79. Therefore, the show cause notice was barred under section 35A(3)(b) ; (ii) The show cause notice is vague as no amount was mentioned therein in accordance with Rule 10 of section 11 A. The show cause notice was invalid on this ground also in view of the case law in the matter of J.B. A. Printing Inks Ltd. v. Union of India and Ors.
reported in 1980 E.L.T. 121 (Bom.) ; (iii) There was denial of natural justice by the Collector while passing the impugned order as he ignored the case law cited by the appellants ; (iv) The impugned order is contrary to the Trade Notice No. 128 (M.P.) All Goods (NES)/75.
3. With reference to the ground (i) the appellants submitted that section 11A referred to in section 35A(3)(b) of the Central Excise Act came into effect on 17-11-1980 but their reference to that in section 35A(3)(b) is merely for computation of time limit and therefore legally effective. They further submitted that section 35A(4) on which the Collector relied is not applicable to the present case as section 35A(3)(b) is specifically applicable whereas section 35A(4) is general in nature. A specific law prevails over general law and the time limit specified in section 11A and referred to in section 35A(3)(b) is to be taken into account and not the time limit under section 35A(4). In support of this argument the appellants cited the judgment of the High Court of Delhi in the matter of Associated Cement Companies Ltd. v.Union of India reported in 1981 E.L.T. 421 (Del.).
4. The appellants cited other case law in support of their argument that their products were covered by Notification No. 119/75-CE. This case law consisted of a judgment of the High Court of Calcutta in the matter of Associated Pigments Ltd. v. Collector of Central Excise, Calcutta and Ors. reported in 1983 E.L.T. 876 (Cal.).
5. Opposing the argument the learned representative for the department submitted that section 11A was not made operative at the material time.
Therefore, the time limit mentioned therein could not be made applicable for the purposes of section 35A(3)(b). Further, the show cause notice was issued under section 35A(2) seeking to review the order of the Assistant Collector and therefore the time limit was 12 months from the date of the said order as provided under section 35A(4) and was therefore within time. He further submitted that proviso to rule 10 allowing 5 years limit for issue of show cause notice to come into play. In this matter as the appellants failed to declare the value of raw materials thereby being guilty of mis-statement and suppression of facts. Regarding the charge that the show cause notice was vague the learned representative submitted that there was no such vagueness and the show cause notice gave all relevant particulars. He also cited an order of the Tribunal in Appeal No. ED(SB)(T)329/80-B in the matter of M/s. Orissa Construction Corporation Ltd, Bhubaneswar v. Collector of Central Excise, Bhubaneswar reported in 1983 ELT 2382 (CEGAT) and argued that the appellants made vessels etc. and there is a change in the article and therefore they are not entitled to the concession under Notification No. 119/75-CE as there is manufacture.
6. In reply the learned counsel for the appellants submitted that the case law cited on behalf of the respondent (1983 ECR 1053-D) has no application here as the facts are not similar. In the instant matter there is no allegation that any different product has emerged and in fact there is only change in the raw materials supplied which did not amount to manufacture. It was not alleged that a new distinct article has been manufactured. The learned counsel also cited a judgment of a Tribunal (Special Bench 'D') in the matter of Ganga Spinning & Weaving Mills, Ludhiana v. Collector of Central Excise, Chandigarh reported in 1983 E.L.T. 1674 (CEGAT) wherein it was held that there was no material or allegation in the show cause notice for invoking special time limit of 5 years and that if duty was paid in accordance with the approved price-list, the normal time limit of six months could not be extended.
7. We have considered the submissions made by both sides. The first ground raised by the appellants is that the show cause notice issued by the Collector is time barred. Admittedly the Assistant Collector passed the order on 21-7-79 which was received by the appellants on 31-7-79 and the show cause notice by the Collector was issued on 7-6-80 and was received by the appellants on 9-6-80. The Collector did consider the question of time bar but held that section 11A though included in the Central Excises and Salt Act, 1944 was not operative at the material time and that unless Government gives effect to any such Act or amendment of an Act by issuing a notification to that effect the said section is inoperative for all purposes and cannot be acted upon. He therefore held that the time limit of 12 months prescribed in section 35A(4) applies.
8. We have carefully examined this question. Section 11A has been on the statute book at the material time and on the date on which the show cause notice was issued by the Collector. However, it came into effect only on 17-11-80. Section 35A(3)(b) made a specific reference to section 11A for purposes of computation of time limit. We have examined the Collector's argument that inasmuch as section 11A has not been made operative at the material time the reference to it in section 35A(3)(b) is not effective and only the time limit under section 35A(4) should be taken into consideration.
9. On careful consideration we are not inclined to agree with the submission of the learned representative for the department and the finding of the Collector on this point. Though not made operative section 11A was on the statute book at the material time. The mere fact that this section had not been made operative would bar any action under that section but would not bar the application of the time limit specified therein for the purposes of section 35(3)(b). Legislation by reference is an accepted practice and there is nothing illegal about it 10. In the instant case section 11A was incorporated in section 35A(3) (b). An analogy can be drawn in the case from cases of incorporation of earlier Act into later. The fact of incorporation is admirably stated by Lord Esher M.R. : "If a subsequent Act brings into itself by reference some of the clauses of former Act, the legal effect of that, as has often been held, is to write those sections into the new Act as if they had been actually written in it with the pen or printed in it".
These observations have been approved in a number of Supreme Court decisions. In Narottamdas v. State of M.P., AIR 1964 SC 1667, the Supreme Court held : "The result is to constitute the later Act along with the incorporated provisions of the earlier Act, an independent legislation which is not modified or repealed by a modification or repeal of the earlier Act". From this it would follow that section 11A having been incorporation in section 35A(3)(b) has actually been written in the section with the pen or printed in it. This section became an independent legislation and for its coming into force it was not dependent on section 11A itself having come into force. Parties agreed before us section 35A(3)(b) at the material time had come into force. Merely, because section 11A itself had not come into force it would not mean that for the purpose of section 35A(3)(b) also had not come into force when it was part and parcel of this provision. We hold that for the purpose of section 35A(3)(b) section 11A was in force and the time limit therein could be applicable to the case. The Collector was in error in applying section 35A(4) on the ground that section 11A itself had not come into force.
11. A reading of section 35A(3)(b) and section 35A(4) shows that it is the former sub-section that is applicable to the present matter and not the latter. The time limit was six months under section 35A(3)(b) and the show cause notice in the instant case had to be issued within six months from the date of the Assistant Collector's orders as the normal time limit specified in section 11A is six months. We also notice that in the show cause notice issued by the Collector on 7-6-80, there was no allegation of any suppression of facts or mis-statement. Therefore, in the absence of such an allegation the extended time limit provided in section 11A is not applicable here. It would appear that there could not be a question of such a suppression of fact or mis-statement inasmuch as there were earlier proceedings in the matter and the Assistant Collector passed the order in July, 1979. We also take note that in the Collector's order there is no finding that there is any suppression or mis-statement. In view of these facts and the legal position we hold that the show cause notice was time-barred as it was issued after the expiry of six months from the date on which the Assistant Collector's orders which were sought to be reviewed by the Collector was received by the appellants.
12. On this ground the appeal succeeds and is allowed. We are not examining the other grounds in view of our decision.