2006 Supreme(SC) 756

2006(8) Supreme 441
SUPREME COURT OF INDIA
(From Customs, Excise & Gold (Control) Appellate Tribunal, (West Block, Bench-A) New Delhi)
Ashok Bhan and Markandey Katju, JJ.
M/s Duncans Industries Ltd., Calcutta—Appellant
versus
Commissioner of Central Excise, New Delhi—Respondent
Civil Appeal No.754 of 2001
With
Civil Appeal Nos.4075-4076 of 2001
Decided on 22-8-2006
Counsel for the Parties :
For the Appellant : Joseph Vellapally, Sr. Advocate, U.A. Rana, Prashant Thakur, Raghvesh Singh and Ms. Srabonee Roy (for M/s. Gagrat & Co.), Advocates.
For the Respondent : Mathai M. Paikeday, Sr. Advocate, Ms. Kiran Bhardwaj and B.K. Prasad, Advocates.

IMPORTANT POINT
After the grant of certificate under the Kar Vivad Samadhan Scheme, 1998 as having settled the dispute and payment of the amount determined no further proceedings could be initiated or proceeded with for the period in question.

Headnote:Central Excise & Salt Act, 1944—Section 11-A—Central Excise Rules, 1944—Rule 9B—Short levy notice—There could not be two assessments for the same period—Amount finally determined as due for the entire period of 10 years from the assessee having been settled under the Kar Vivad Samadhan Scheme, 1998—No scope for any further review or determination of that issue by any authority under the Act—A manufacturer of cigarettes holder of Central Excise Licence merged with another company effective from 1-4-1977—In April 1984, the Company was demerged and was made a wholly owned subsidiary of respondent company—Provisional assessments were made from July, 1973 to February, 1983 as there was some dispute regarding levy of excise duty—Assistant Collector of Central Excise issued a show cause notice to the assessee for the period July 1973 to February 1983 —Collector of Central Excise issued another show cause notice to assessee for the period September, 1981 to February, 1983 alleging that assessee had wilfully mis-declared assessable value of cigarettes—Writ petitions challenging levy of short paid duty—After the Assistant Collector finalized the assessment order, show cause notice was issued—In the meantime, Kar Vivad Samadhan Scheme, 1998 was introduced—Assessee paid the demand raised under the said scheme—Whether any further proceedings could be initiated or proceeded with for the period in question—(No).

       Held : The issue before the Assistant Collector Central Excise, Kharda Division, Calcutta was for the determination of the assessable value of the goods for the period July, 1973 to February, 1983 i.e. the period covered by the show cause notice dated 8.5.84. The issue before the Commissioner of Central Excise, Delhi was also for determination of the assessable value of the goods for the period September, 1981 to February, 1983, the period covered by show cause notice dated 1.10.1986. The show cause notice dated 1.10.1986 was issued against 20 persons including the assessee company. As regards the assessee, for the period September, 1981 to February, 1983, the Commissioner of Central Excise passed the order dated 27.3.1991 directing the Assistant Commissioner to determine the assessable value taking into consideration the materials contained in show cause notice dated 1.10.1986.(Para 20)

       The Assistant Collector Central Excise, Kharda Division, Calcutta thereafter issued addendum dated 20.2.1992 incorporating the allegations made in show cause notice dated 1.10.1986 in the show-cause notice dated 8.5.1984. The effect of the order passed by the Commissioner of Central Excise, Delhi was that the Assistant Collector Central Excise, Kharda Division, Calcutta alone had the jurisdiction to finally adjudicate and determine the assessable value of the goods cleared from the assessees factory for the entire period and the consequent duty liability. Either party wishing to dispute the determination made by the Assistant Collector Central Excise, Kharda Division, Calcutta had to do so by invoking the right of appeal to the Commissioner of Appeals, Tribunal and the Supreme Court. In addition the Department could have invoked the short levy provision under Section 11-A within a period of six months or invoked the extended period of limitation of 5 years under proviso to Section 11-A provided the conditions laid down in the proviso were satisfied. The two show-cause notices were finally adjudicated by the Assistant Collector Central Excise, Kharda Division, Calcutta on 11.01.1996. The assessable value determined and consequent demand was raised by finalizing assessments for the entire period July 1973 to February, 1983. If the revenue was aggrieved by the above proceedings it was incumbent upon them to either invoke the right of appeal against that order under Section 35E (2) or issue a short levy notice under Section 11-A within six months. Neither of these two options having been invoked, the order attained finality as against the revenue.(Para 20)

       It need not be emphasized that there could not be two assessments for the same period.(Para 21)

       This apart finally determined as due for the entire period of 10 years from the assessee having been settled under the Kar Vivad Samadhan Scheme, 1998, there is no scope for any further review or determination of that issue by any authority under the Act.(Para 22)

       Thus, after the grant of certificate under the Kar Vivad Samadhan Scheme, 1998 as having settled the dispute and payment of the amount determined no further proceedings could be initiated or proceeded with for the period in question. For the reasons stated above, we do not find any substance in the appeals filed by the Revenue.(Paras 24 and 25)

       In the present case there is not even an allegation much less finding by the department that there has been any clandestine removal of goods without assessment. As such the penalty is liable to be set aside. The matter having been settled in the Kar Vivad Samadhan Scheme, 1998 the question of determination of the duty payable or levy of penalty did not arise. In our view, the Tribunal clearly erred in upholding the levy of penalty.(Para 27)