Full Judgment
2. The learned consultant for the appellant submitted that Section 47(2)(d) of the Finance Act, 1982 cannot be made applicable to recover the differential duty of Rs. 89,535.40 arrived at on the basis of assessable value. It was urged that inasmuch as no show cause notice was issued against the appellant in respect of the sum demanded under the impugned order prior to 27/2/82 within the period of limitation in terms of Section 11(K) of the Act, the duty demanded is clearly barred by limitation under Section 11(A) of the Central Excises & Salt Act, 1944. The learned consultant further submitted that Section 47 of the Finance Act, 1982 does not over-ride or supercede Section 11(A) of the Central Excises & Salt Act, 1944. It was further urged that under Section 47(2) of the Finance Act, 1982, only action on thing taken or done or purporting to have been taken or done at any time during the period 1.10.75 to 27.2.82 shall be deemed to have always been validly and effectively taken or done as if the amendment made by Sub-section (1) has been in force at all material times and in the instant case, inasmuch as no action or thing has been taken or done or purported to have been taken or done at any time between 1.10.75 to 27.2.82, differential duty cannot be demanded in terms of Section 47(2)(d) of the Finance Act, 1982. The learned consultant for the appellant also placed reliance on the various rulings of the High Court as well as Special Bench of the Customs, Excise & Gold (Control) Appellate Tribunal which we/shall advert to at the relevant place.
3. The learned SDR contended that by issue of amendment to Section 4 of the Central Excises & Salt Act, 1944 with retrospective effect, the assessments made by the authorities on the R.T. 12 shall be deemed to have been validly made as if the amendment made by Sub-section (1) of Section 47 of the Finance Act, 1982 had been in force at all material times and recovery of the same would follow as a consequence in terms of Section 47(2) of the Finance Act, 1982. It was further urged that inasmuch as the assessable value is to be determined with reference to actual effective rate of duty paid and not the tariff rate or the rate of duty leviable under the act on goods under assessment, the determination of duty under the impugned order is correct in law.
Finally, it was urged that the period of limitation under Section 11(A) of the Act would not be relevant in construing the scope of Section 47(2) of the Finance Act, 1982.
4. We have carefully considered the submissions of the parties herein.
In order to better appreciate the submissions of the parties herein, we would like to extract Section 47(2) of the Finance Act, 1982.
47(2) ... Any action or thing taken or done or purporting to have been taken or done at any time during the period commencing on the 1st day of October 1975 and ending with the 27th day of February 1982 (hereafter in this sub-section referred to as the paid period) under the Central Excises Act, shall be deemed to be and to have always been, for all purposes, as validly and effectively taken or done as if the amendment made by Sub-section (1) had been in force at all material times and, accordingly, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority:- a) all duties of excise levied, assessed or collected during the said period on any excisable goods under the Central Excises Act, shall be deemed to be and shall be deemed always to have been, as validly levied, assessed or collected as if the amendment made by Sub-section (1) had been in force at all material times; b) no suit or other proceedings shall be maintained or continued in any court for the refund of, and no enforcement shall be made by any court of any decree or order directing the refund of, any such duties of excise which have been collected and which would have been validly collected if the amendment made by Sub-section (1) had been in force at all material times; c) refund shall be made of all such duties of excise which have been collected but which would not have been so collected if the amendment made by Sub-section (1) had been in force at all material times; d) recovery shall be made of all such duties of excise which have not been collected or, as the case may be, which have been refunded but which would have been collected, or, as the case may be, would not have been refunded, if the amendment made by Sub-section (1) had been in force at all times.
Explanation :- For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if this section had not come into force.
5. The important question that would arise for our consideration in the present case is whether the differential duty demanded by the Department from the appellant in respect of the clearances effected during the years 76-77 to 78-79 as detailed in the Order in Original will be subject to the period of limitation under Section 11(A) of the Act. In our opinion, Section 47 of the Finance Act, 1982, extracted above does not make any inroads into the period of limitation under Section 11(A) which much less has a over-riding effect on it. It is relevant to note that Section 47 of the Finance Act 1982 has neither expressly nor by necessary implication saved the operation of the period of limitation under Section 11(A) of the Act. We are fortified in this view by the ratio of Division Bench's ruling of the Delhi High Court in the case of 3.K. Cotton, Spinning and Weaving Mills and Anr.
v. Union of India reported in 1983 ELT 239 (Del.) wherein it is observed:-' "Recoveries and refund are covered by the provisions of Section 11A and 11B. We cannot pursuade ourselves to accept the argument of the learned Solicitor General that Section 51 of the Finance Act over-ride the effect of Sections 11A and 11B of the Act. The parti-cularisation by Section 51 of the Finance Act cannot have the effect of repealing Sections HA and 11B of the Act." It is further held by the Division Bench of the Delhi High Court that' the excise authorities have 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 clearances 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 clause (a) to (d) only and not permit levy of penal tie etc. We however, agree with argument that no prosecution for past alleged breaches can now be ordered." The Bombay High Court in the case of B.K. Paper Mills Private Limited v. Union of India and Ors. reported in 1984 (18) ELT 701 (Bom.), while considering the purport and scope of Section 47 of the Finance Act '82 vis-a-vis Section 11(A) of the Act has held that the Finance Act merely sets out that recovery or refund of duties of excise shall be made as if the amendment had been in force at all material times and does not give a go by to other provisions of the Central Excises and Salt Act, 1944' and that the provisions of Section 11(A) are not over-rided by amending act or by taking the amendment retrospective. The Special Bench CEGAT, New Delhi in the case of Kaipulli Match Industries and Anr. v. Collector of Central Excise, Cochin reported in 1986 (23) ELT 520 has adverted to and followed the ratio in the rulings of the High Court referred to supra and has held that in enforcing a demand under show cause notice, the Department is bound by the period of limitation prescribed under Section 11(A) of the Act and can enforce the demand, only for the period mentioned in Section 11(A) of the Act.
6. We, therefore, find that the ratios in the above rulings would squarely cover the question of limitation relating to the duty demanded and the reliance placed by the learned consultant for the appellant on the above rulings, in the course of his submissions, is well-founded and would clinch the issue in his favour. The learned Senior Departmental Representative, though made a brief submission about the existence of a rule contra by the Madras High Court in Writ Petition No. 47/85 of 1982 wherein according to SDR it has been held that the Finance Act 1982 was a complete legislative enactment by itself. The learned SDR was not able to answer specifically to a query from us as to whether the Madras High Court has interpreted the scope of Section 47 of the Finance Act in such a way so as to give it a over-riding effect on Section 11(A) of the act. Indeed, the records reveal that when the appeal came up for hearing on 10.10.85, the same stood adjourned since the learned SDR wanted to produce a copy of the judgment of the Madras High Court referred to above but unfortunately no such ruling of the Madras High Court has been brought to our notice 'nor a copy of the judgment made available to us till now. Therefore, we respectfully adopt the ratio decidendi in the various rulings cited above and hold that the demand of differential duty under the impugned order is clearly barred by limitation under Section 11A of the act.
Inasmuch as the point relating to limitation is found in favour of the appellant herein, we do not feel called upon to go into the other questions argued by the learned Consultant for the appellant. In the result, the impugned order appealed against is set aside and the appeal is allowed.