1 IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.2188 OF 1996 1 M/s Jamod Ginning Co. Pvt. Ltd., having its office at Dhule-424 001, Maharashtra. 2 Rameshchandra Jainarayan Phafat, Indian Inhabitant of Dhule, having his office at Dhule-424 001, Maharashtra. Petitioners Versus 1 The Union of India. 2 The Assistant Collector of Central Excise & Customs, Jalgaon Division, Shinde Bhavan, Ichha Devi Road, Jalgaon – 425 001. Respondents Mr.P.M.Shah, Senior Counsel for the petitioners. Mr.Alok Sharma, Assistant Solicitor General for Respondents. CORAM: B.R.GAVAI AND S.V.GANGAPURWALA, JJ. DATE : 14 th July, 2010. ORAL JUDGMENT (Per B.R.Gavai, J.): 1 The petitioners have challenged the order dated 29 th July 1994, passed by the Assistant Collector of Central Excise & Customs, Jalgaon Division, Jalgaon, thereby confirming the demand of Rs.22,315.40 issued by the Superintendent, Central Excise & Customs, Dhule. 2 2 With effect from 1 st January 1984, the Vegetable Oil Cess Act, 1983 came into force, which provides for imposition of levy of cess on vegetable oils. In the Budget Speech made by the Honourable Finance Minister, on 28 th February 1986, it was stated that the Government had decided to dispense with the cess on cotton, copra and vegetable oils. In view of the said statement, petitioners discontinued making payment of cess with effect from 1 st March, 1986. However, subsequently, the Cotton, Copra and Vegetable Oils Cess (Abolition) Act, 1987 came into force with effect from 21 st March, 1987. A Petition was filed before the Apex Court. The said petition (B.K. Industries & others Vs. Union of India) was decided on 13 th April 1993, thereby holding validity of Section 13 of the Vegetable Oils Cess (Abolition) Act, 1987, which provide for prospective operation of the said Act. As such, result of the said petition was that the manufacturers were liable to pay the oils cess between 1 st March, 1986 to 20 th March, 1987. It further appears that there were certain groups of petitions filed before this Court and those petitions came to be decided vide order dated 23.11.1993 and 17.01.1994 in view of the law laid down by the Apex Court and further granting liberty to the Excise authorities to issue show cause notice. However, while disposing of the petitions, all the issues were kept open. 3 Subsequently, the show cause notice came to be issued to the petitioners on 21 st March 1994, thereby estimating the liability of the petitioners for an amount of Rs.22,315.40 for the period between 1 st March 1987 to 20 th March 1987. The said show cause notice was replied to by the petitioners on two grounds – firstly, on limitation and secondly, that the show cause notice lacks of necessary particulars and as such incapable of being replied to. By the impugned order, the demand made under the show cause notice came 3 to be confirmed. Hence this petition. 4 Shri Shah, learned Senior Counsel appearing on behalf of the petitioners, submits that the show cause notice itself was beyond limitation and as such impermissible in view of Section 11-A of the Central Excise Act. He submits that on this short ground alone, the show cause notice ought to have been discharged. He submits that the issue regarding limitation has not been dealt with by the authorities in its correct perspective. 5 Shri Sharma, the learned Assistant Solicitor General of India, submits that since the interim orders, which were granted in the petitions, were vacated on 23.11.1993, the limitation would start from the said date and since the notice is issued within a period of six months, it will be very much within limitation. He further submits that the petitioners have challenged the order passed by the first authority, which is amenable to appeal before the appellate authority. He, therefore, submits that the petition is not tenable on this ground. 6 Insofar as the preliminary objection of the Assistant Solicitor General regarding tenability of the petition on the ground of non availing of alternate remedy is concerned, by now it is a settled law that the said objection has to be taken at the earliest. It is equally settled that if the petition is admitted, it is not permissible to raise the ground regarding availability of alternate remedy at the fag end of the proceedings. It is further to be noted that though the objection, in this regard, was raised at the time of issuing `Rule’, this Court has issued the Rule. In that view of the matter, it would not be in the interest of justice to non-suit the petitioners at this stage on hyper technical ground. 4 7 Insofar as merits of the matters are concerned, the provisions of Section 11-A, as it existed then, would provide that when an Excise Officer finds that duty of excise has not been levied or paid or has been short-levied or short-paid, he is required to issue a notice within a period of six months from the date, on which such payment is due. The Explanation to the said provision requires the period of stay granted by any Court to be excluded while computing the period. Admittedly, the recovery is for the period between 1 st March, 1986 and 20 th March, 1987. As such, the period of limitation would expire on 20 th September, 1987. The stay, in some of the matters, was granted by this Court on 30 th May, 1988, which came to be vacated on 23 rd November 1993. It again, thus, be clearly seen that the limitation has expired much prior to the date on which interim relief was granted by this Court. As such the contention, in that regard, is devoid of any substance. 8 It is further to be noted that this Court, while disposing of the petitions itself, has kept all the issues open including the issue of limitation. In that view of the matter, the authorities concerned ought to have given anxious thought in that regard. Merely because the petitions were disposed of on 23.11.1993, the period of limitation would not start from the said date without taking into consideration the scheme of Section 11-A of the said Act. 9 In that view of the matter, we are of the considered view that the notice making demand was much after the permissible limitation and consequently, the final order, confirming the demand in the notice, is not sustainable. 5 10 By an interim order dated 05.12.1994, the petitioners were directed to deposit the amount towards cess, which was also permitted to be withdrawn by the respondent-authorities. It has been specifically observed in the said order that in case the petitioners succeed in their contention, the department will refund the amount with Bank interest. Accordingly, the petitioners have deposited the amount, which is withdrawn by the respondents. Since while admitting the petition itself, this Court has clarified that in the event the petitioners succeed, they would be entitled to refund of the amount with Bank interest, the petition will have to be allowed in same terms. 11 Rule is made absolute on above terms. The amount deposited by the petitioners is directed to be refunded to the petitioners with interest at the rate of 8% p.a. within a period of three months from today. In the facts and circumstances of this case, there shall be no order as to costs. (S.V.GANGAPURWALA) (B.R.GAVAI) JUDGE JUDGE ******* adb/wp218896