Case: M/s. Ballarpur Industries Limited Vs. Assistant Collector of Customs and Central Excise and Others

1. The appellant, a Public Limited Company, has preferred these appeals against the decision of the High Court dismissing its writ petitions by which the appellant sought to question the decision of the Revenue levying excise duty under Rule 17(4) of the Central Excise Rules, 1944. The saidnotice was issued under Rule 10, as in force prior to(sic 1976) which inter alia providedduties or charges have beenthrough inadvertence, error, collusion or misconstruction on the part of an officer, or through misstatement as to the quantity, description or value of such goods on the part of the owner, or when any such duty or charge, after having been levied, has been owing to any such cause, erroneously refunded, the proper officer may, within three months from the date on which the duty or charge was paid or adjusted in the owners accountcurrent, if any, or from the date of making the refund, serve a notice on the person from whom such deficiency in duty or charges is or are recoverable requiring him to show cause to the Assistant Collector of Central Excise why he should not pay the amount specified in the notice" *

Reasoning: 3. There is no doubt that in the instant case thenotice was issued within time. Although, thenotice was for a longer time it was confined to one year only and therefore, instead of the amount of Rs 4, 37, 074.60 demanded in thenotice, the amount was reduced to Rs 47,find it difficult to persuade ourselves to this line of reasoning. Although, in that case the Court did not notice Rule 10 as it stood prior toeven though thenotice in that case was datedreference was made to Sectionof the Act which is more or less (substantially) the same. Under the said provision when any duty of excise is found to have been not levied or paid or has beenid or erroneously refunded, anotice could be issued on the person chargeable with the duty within six months from the relevant date requiring him to show cause why he should not pay the amount specified in the notice. The expression "relevant date" has been defined in clause (ii) of(3) of SectionOn the plain reading of the said provision as also Rule 10 as it stood prior tose notice which could be issued within theprescribed under the relevant provision could only be in relation to the duty of excise for a period prior to the issuance ofnotice. There could be no reason for the issuance of anotice for the period subsequent to the notice as in the case the necessary corrective action could always be taken. But Rule 10 with which we are concerned as well as Sectionto which a reference is made in the case of Rainbow Industries, thenotice which must be issued within theprescribed in the said provisions must relate to a period prior thereto as the purpose of thenotice is recovery of duties or chargesetc. We, therefore, find it difficult to accept the contention that the ratio of the decision in Rainbow Industries [ 1994 (6) SCC 563 : 1994 (74) ELT 3 ] is that under Sectionpast dues cannot be demanded. We must, therefore, reject that contention. The observations in the said decision must be confined to the facts of that case