ORDER

Per Shri P.C. Jain :

Briefly stated, following are the facts in this case :

1.1 Four demands of various amounts were raised by the Supdt. of Central Excise in the assessment memoranda of R.T. 12 returns for the months November 1980 to February 1981 against the respondents herein consequent to an order No. S.O. 862 (E) dated 27.10.80. (made effective from Nov. 1980) issued by the Ministry of Commerce, Government of India under Section 9 of the Industries (Development & Regulation) Act 1951, levying cess @ 1/8% adv. on pulp, paper and paper board etc.. Sub-section (2) of Section 9 ibid provides that the cess shall be payable on such interval, within such time and in such manner as may be prescribed by rules made under the said Act. Rules were however published vide Notification dated 16.2.81 wherein Rule 3 provided that the provisions of Central Excise and Salt Act 1944 & the Central Excise Rules 1944 shall apply in relation to levy and collection of cess. Assessment of R.T. 12 returns, as aforesaid, was made by the Supdt. provisionally within six month's of filing of each of the said returns.

1.2 Thereafter, assessments were finalised on 2.5.90 by making the following endorsements :-

"R.T. 12 assessment finalised. Demand on PME and cess on duties raised on the assessment memorandum,

table class="tx" cellpadding="4" style="width: 100%; border-collapse: collapse">

	B	=	....... (some amount)
	Spl.	=	do
	Cess	=	do
	Show-cause notice will be issued afterwards.
			Sd/- - 2.5.90
			Supdt. C.E. & C,
			Chowduar ".

1.3 Being aggrieved by the said order, respondents filed an Appeal before the Collector of Central Excise (Appeals) who vide his order-in-Appeal dated 28.7.89 set aside the four demands and allowed the Appeals on the ground that Notification prescribing the machinery for levy and collection of cess was w.e.f. 16.2.81. The said authority also held the demand as barred by time since the demands were raised long after expiry of six months from the date of submission of R.T. 12 returns. Hence this Appeal by the Revenue.

2.1 Ld. SDR submits that levy of cess became effective from 1.11.80; Non-publication of rules for assessment and collection of cess does not affect the date of levy which came into effect from that date by issuance of the standing order dated 27.10.80. Prescription of machinery for collection of cess is merely a procedural aspect of levy and takes effect retrospectively on selling up such machinery.

2.2 He also urges that lower appellate authority's finding that the demand of cess is barred by time because these were raised long-after expiry of six months from the date of submission is incorrect. He points out that assessments on R.T. 12 returns were provisional in the first instance because the question of PME (post manufacturing expenses) had not yet been settled and the respondent had also executed a bond B-13 (Gen. sec) for provisional assessment in 1978 which was alive during the relevant period. He, therefore, submits that question of limitation against the demands does not arise.

3.1 We have carefully considered the submission of the ld. SDR, in the absence of any representative from the Respondents, notice of hearing to whom had been returned undelivered by the postal authorities with remarks 'abolished'.

3.2 We agree with the ld. SDR that levy of cess takes its effect from 1.11.80 and it cannot be said that it can not be imposed till machinery for assessment and collection is brought into existence. Machinery for assessment and collection is nevertheless necessary to quantify the levy and collection thereof. Therefore, cess imposed w.e.f. 1.11.80 has to be kept in abeyance till 16.2.81 since jurisdiction to assess and collect cess was conferred on Central Excise officers only from 16.2.81.

3.3 We observe from a letter dated 23.5.90 of Supdt. Central Excise addressed to Assistant Collector (Tribunal) of Central Excise & Customs, BBSR that following is the data regarding the assessments in question :-

	Month	Date of filing R.T.12 returns	Dat

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