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2005 DIGILAW 1241 (MP)

Union of India v. Dhar Textile Mills Ltd.

2005-12-06

S.C.VYAS, S.K.KULSHRESTHA

body2005
Judgment ( 1. ) THE appellants - Union of India and Commissioner, Central Excise and Customs, Indore, have filed this appeal under Section 35g of the Central Excise Act, 1944 against the decision dated 23-9-2004 of the Customs, Excise and Service Tax Appellate Tribunal, New Delhi, in Appeal No. E/296/04-NB (A) by which the appeal has been dismissed on the ground that the Revenue did not challenge the findings of the Commissioner (Appeals) on merits and the only ground raised was that the demand Under Section 11a of the Central Excise Act was not time barred. Though this appeal was admitted on several questions raised in the appeal memo, the parties hereto agree that the only question, in the light of the finding arrived at by the Tribunal, that arises for determination in the present case is whether the Tribunal committed an error of law in holding that there was no challenge to the order of the Commissioner (Appeal) on merits although in the appeal memo filed by the Revenue, the order of the Commissioner (Appeals) was challenged on several grounds on merits. We, therefore, proceed to decide this case on the following substantial question of law : Whether the order of the Tribunal is vitiated on account of being grossly perverse in holding that the Revenue did not challenge the order of the Commissioner (Appeals) on merits? ( 2. ) THE learned Asstt. Solicitor General has invited our attention to the copy of the appeal memo that was filed before the Tribunal. In this appeal memo several grounds have been raised touching the merits of the case. The grounds of appeal read as under : The Order-in-Appeal passed by the Commissioner (Appeals) is not legal and proper in view of the following : chapter Note 3 of Chapter 52 of the Central Excise Tariff Act, 1985 (5 of 1986) deals with the matter. For convenience of reference Chapter Note 3 is reproduced below : ( 3. ) IN relation to products of heading Nos. 52. 07, 52. 08 and 52. 09, bleaching, olyeing, printing, water proofing, shrink proofing Organdie processing or any other process or any one or more of these processes shall amount to manufacture. Further, Entry No. 13 of exemption Notification No. 9/96-C. E. , dated 23-7-96 as amended exempts Woven Fabrics of Cotton filling under Chapter Heading No. 52. 07, 52. 08 or 52. 08 and 52. 09, bleaching, olyeing, printing, water proofing, shrink proofing Organdie processing or any other process or any one or more of these processes shall amount to manufacture. Further, Entry No. 13 of exemption Notification No. 9/96-C. E. , dated 23-7-96 as amended exempts Woven Fabrics of Cotton filling under Chapter Heading No. 52. 07, 52. 08 or 52. 09 of the CETA when subject to the process of "flannellete raising" which is one of the processes mentioned in Chapter Note No. 3 of Chapter 52 under the expression "any other process". This indicates that "flannellete raising" amounts to manufacture as per Section 2 (f) of the Central Excise Act, 1944 in relation to goods falling under Chapter Heading Nos. 52. 07, 52. 08 or 52. 09 of the Central Excise Tariff Act, 1985. Further, as per Explanation II of Notification No. 29/96-C. E. (NT.) dated 3-9-96 as amended "for removal of doubts, it is clarified that the provisions of this Notification shall not apply where processed fabrics itself is used as an input for further processing". In view of this explanation, flannel cloth being itself processed fabric, benefit of Notification No. 29/96-C. E. (N. T.) dated 3-9-2006, as amended cannot be availed. In the instant case, the Noticee had wrongly availed the benefit of Notification No. 29/96-C. E. (N. T.) dated 3-9-96 as amended by misdeclaring the flannel fabrics (processed fabrics) as "grey Flannel". This fact is very clear as the declaration filed by them on 14-10-98 under Notification No. 27/92-C. E. (N. T.) dated 9-10-92 proves mis-declaration on the part of the Noticee. Invokation of extended period of limitation in this case is, therefore, justifiable. This issue has been decided by the Larger Bench of the Honble Tribunal in its order in the case of , Nijam Sugar Factory v. Collector of Central Excise, Hyderabad reported in. , 2003 (89 )ECC873 (Tri ), 1999 (114 )ELT429 (Tri-Del ). For reference purpose relevant para of the said order is reproduced below : 23. This issue has been decided by the Larger Bench of the Honble Tribunal in its order in the case of , Nijam Sugar Factory v. Collector of Central Excise, Hyderabad reported in. , 2003 (89 )ECC873 (Tri ), 1999 (114 )ELT429 (Tri-Del ). For reference purpose relevant para of the said order is reproduced below : 23. 1 On account of proviso to Sub-section (1) to Section 11a of the Act, the sub-section provides that where any duty of excise has not been levied or paid or has been short levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment of duty, by such person or his agent, a Central Excise Officer may, within five years from the relevant date, serve notice on the person chargeable with the duty, requiring him to show cause why he should not pay the amount specified in the notice, it is thus apparant that in case of any of the specified reasons mentioned in the proviso, if any Central Excise Duty has not been levied or paid or has been short levied or short paid of erroneously refunded, a show cause notice may be issued within five years from the relevant date. Relevant date has been defined in Sub- section (3) to Section 11a and nowhere this sub-section provides that the relevant date means the date of acquiring the knowledge by the Department. As such acquiring the knowledge by the Department does not take away the period of five years provided by the Law Makers in the Act itself. We must not lose sight of the fact that extended period of limitation has been provided by the Law Makers with the clear intention that if a person has not paid the duty, which is due to the Government under law, on account of fraud, suppression, wilful mis-statement or contravention of Act or Rules with an intent to evade payment of duty, the Department can deprive him of his illegal benefit and/or demand the duty due to the Government within a period of five years from the relevant date. This period of five years is not curtailed merely because the Department has come to know about the fraud, suppression, etc. This period of five years is not curtailed merely because the Department has come to know about the fraud, suppression, etc. , committed by the assessee casus/omisus is well settled rule of interpretation. Certain matters have to be left to the wisdom of legislature. The matter which should have been but has not been provided for in a statute, cannot be supplied by Courts. The Supreme Court in P. K. Unni v. Nirmala Industries , AIR1990 SC 33 , 1989 (24 )ECC395 (SC ), 1989 (43 )ELT79 (SC ), (1990 )1 GLR508 , JT1989 (3 )SC 576 , 1989 (2 )SCALE553 , (1989 )4 SCC81 , [1989 ]supp (1 ) SCR86 , 1990 (1 )UJ98 (SC ) has quoted with approval the following observations of the Privy Council in the case of Crawford v. Spooner (1846) 6 Moor (PC) 1, 8, 9. We cannot aid the legislatures defective phrasing of an Act, we cannot add and mend, and by construction make up deficiencies which are left there. In view of the above the Order-in-Appeal passed by the Commissioner (Appeals) is not legal and proper. 3. It seems that the Tribunal over-looked the extensive grounds raised and on account of some confusion, came to the conclusion that the Revenue did not challenge the order of the Commissioner (Appeals) on merits and dismissed the appeal on that ground. We are, therefore, of the view that the order requires fresh appraisal by the Tribunal in the contest of the grounds raised by the Revenue. ( 4. ) ACCORDINGLY, this appeal is allowed and the case is remanded to the Tribunal for decision afresh. The Tribunal shall, however, be free to consider all aspects without being influenced by any observation herein. There shall be no order as to the costs of this appeal.