IMPORTANT POINT
Mere failure to pay duty and/or take out a licence which is not due to any fraud, collusion or wilful misstatement or suppression of fact or contravention of any provision is not sufficient to extend period of limitation.

Headnote:Central Excise Act, 1944-Section 11A-Recovery of Dues not levied or not paid or short levied or short paid or erroneously refunded-As amended by Finance Act, 2000 w.e.f. 17-11-1980-Effect-Law laid down under 1999(113) ELT 353 SC becomes bad-Whether there was any ground for invoking first proviso to Section 11A(1) of the Act? (No)-Appeals allowed.
       Held : Hence, it is held that in view of the amendment of Section 11-A (1), the decision rendered by this Court in Cotspun s case (supra) would not be a good law. Show cause notice for correcting errors or mistakes in approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under the provisions of the Act or the Rules made thereunder could be issued within the prescribed period. (Para 23)
       In this view of the matter, in our view, the finding recorded by the Tribunal that there was wilful suppression on the part of the Company in availing the benefit of Notification and therefore extended period of limitation could be invoked, requires to be set aside and is here by set aside. The appeal is allowed to the aforesaid extent. (Paras 33 and 34)

JUDGMENT

Shah, J.-The questions which were considered by the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi (hereinafter referred to as CEGAT ) in Final Order No.1467/99-B dated 5.1.2000 arising out of Appeal No.E/3646/1990(B), were - whether, as the clearances in issue were effected against approved classification lists, the demand was sustainable in view of the law laid down by the Constitution Bench of this Court in Collector of Central Excise, Baroda v. Cotspun Limited [1999 (113) ELT 353] and whether there was any ground for invoking first proviso to sub-section (1) of Section 11A of the Central Excise Act, 1944 (hereinafter referred to as the Act )?

2. In these appeals, first question which requires decision is - what is the effect of following amendments in Section 11A of the Central Excise Act, 1994 which came into force w.e.f. 17.11.1980 by the Finance Act, 2000 (10 of 2000).

3. The relevant part of unamended Section 11A was as under:-

"Section 11A. - Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded.-(1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, a Central Excise Officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice.

Provided 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, the provisions of this sub-section shall have effect, as if, for the words "six months", the words "five years were substituted."

4. Clause 97 of the Finance Act provided that in sub-section (1) of Section 11A of the Act following shall be added:-

(a) in the opening portion, for the words "erroneously refunded", the words "erroneously refunded, whether or not such non-levy or non-payment, short-levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder", shall be substituted and shall be deemed to have been substituted on and from the 17th day of November, 1980;

(b) for the words "six months", wherever they occur, the words "one year" shall be substituted;

Provided further that where the amount of duty which has not been levied or paid or has been short-levied or short-paid or erroneously refunded is one crore rupees or less a notice under this sub-section shall be served by the Commissioner of Central Excise or with his prior approval by any officer subordinate to him:

Provided also that where the amount of duty which has not been levied or paid or has been short-levied or short-paid or erroneously refunded is more than one crore rupees, no notice under this sub-section shall be served without the prior approval of the Chief Commissioner of Central Excise".

5. After amendment, relevant part of Section 11A reads thus:

"Section 11A. - Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded.-(1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, whether or not such non-levy or non-payment, short levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assess

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2003 Supreme(SC) 22

IMPORTANT POINTMere failure to pay duty and/or take out a licence which is not due to any fraud, collusion or wilful misstatement or suppression of fact or contravention of any provision is not sufficient to extend period of limitation.

Cases Referred (6)

IMPORTANT POINT
Mere failure to pay duty and/or take out a licence which is not due to any fraud, collusion or wilful misstatement or suppression of fact or contravention of any provision is not sufficient to extend period of limitation.