http://JUDIS.NIC.IN

SUPREME COURT OF INDIA

Page 1 of 4

PETITIONER:

COLLECTOR OF CENTRAL EXCISE, BARODA

Vs.

RESPONDENT:

KOSAN METAL PRODUCTS LIMITED

DATE OF JUDGMENT26/10/1988

BENCH:

MUKHARJI, SABYASACHI (J)

BENCH:

MUKHARJI, SABYASACHI (J)

RANGNATHAN, S.

CITATION:

1989 AIR 265 1988 SCR Supl. (3) 537

1989 SCC Supl. (1) 135 JT 1988 (4) 526

1988 SCALE (2)1442

ACT:

Central Excises and Salt Act 1944/Central Excise Rules

1944-- Section 11-A/Rules 8,10 & 11--Assessee--Manufacturing

LPGF valves and regulators--Brass rods prepared by another

company--‘Set- off duty availed of on The brass rods--Later

found that set- off duty was incorrectly allowed--Issue of

recovery notice--Validity of.

HEADNOTE:

The respondent-company manufactures L.P.G.F. valves and

regulators falling under Tariff Item 68 of the Central

Excise Tariff. It was receiving brass rods manufactured by

another company of Bombay and availed of the set-off of duty

as stipulated under Notification No. 178/77 dated 18th

June, 1977. The brass rods were assessed under T.I. 68

during the period from 24th July, 1978 to 31st March, 1979.

With effect from 1st April, 1979 brass rods manufactured by

the Bombay Company were assessed under T.I. 26A(1)(a).

The Superintendent of Central Excise Range XV Surat,

noticed that the respondent-company had received brass rods,

the goods other than falling under Tariff Item 6X and had

availed of the incorrect set-off of duty under the said

notification. The respondent-Company was required to show

cause as to why the duty amounting to Rs.261.88 should not

be recovered from it under Rule l0 and why penalty should

not be imposed on it under Rule 173Q. In reply. the

respondent- Company contended that the notice under Rule 10

had not been issued to it within time, that there had been

no fraud collusion or wilful mis-statement or suppression

of facts on its part and that it had correctly availed of

the ‘set-off’ of duty.

The Assistant Collector confirmed the demand for duty,

and the appeals against his orders were rejected.

The Tribunal while allowing the claim of the respondent,

took the view that the classification lists had been

finalised by the Bombay Collectorate, and the Assistant

Collector, Surat had no authority to re-open those

assessment.

PG NO 537

PG NO 538

Dismissing the appeals of the Revenue, this Court,

http://JUDIS.NIC.IN

SUPREME COURT OF INDIA

Page 2 of 4

HELD: 1. Section 11-A of the Central Excises and Salt

Act, 1944 provides that when any duty of excise has not been

levied or paid or has been short-levied or short-paid or

erroneously refunded, a notice may be served on the

concerned person within a period of six months. [541G]

In the instant case, the time taken for the service of

the notice beyond a period of six months. Therefore, it does

not appear that a proper notice was issued. [541G]

2. Merely on the ground of short-entry in RT- 12, Rule

10 would not be attracted. When in such circumstance, a

demand is made under the Act for recovery then such demand

must be under s. 11-A of the Act. [540A-B]

Good Shepherd Rubber Company’s case (1978 ELT 66)

affirmed.

3. There is no ground which supports the allegation that

there had been fraud, collusion or any wilful mis-statements

or suppression of facts on the part of the respondent. Rule

11-A. therefore, clearly applies to the facts of the

instant case. [542B]

JUDGMENT:

CIVIL APPELLATE JURlSDlCTlON: Civil Appeal Nos. 1571-

72(NM)of 1988.

From the Order dated 17.10.1987 of the Customs Excise

and Gold (Control) Appellate Tribunal, New Delhi in Appeal

No. 66 & 67 of 1987-BI in Order No. 405 & 406 of 1984 BI.

M.K. Banerjee Solicitor General, R.P. Srivasta