M/S. Steel Authority Of India Ltd. (Unit ... vs Commissioner Of Central Excise Raipur

3. In this batch of appeals, we will treat C.A. No.2150/2012 as the leading case. We will refer to the said case as the SAIL Case. In the said case originally, the appellant company which is manufacturer of various products including rail 2 sold the same to the Indian Railways. The products were cleared on sale from 1st January, 2005 to July 2006. The goods were cleared on the payment of excise duty on the payment of price which was fixed based on their circular dated 24.04.2005. Subsequently, the prices were enhanced by way of price circular dated 20.07.2006. The revision came into effect with retrospective effect. It is based on the same that SAIL deposited Rs.142 crores by way of excise duty. This was done in August 2006. Thereupon, the officers of the department indulged in correspondence with SAIL seeking details regarding the clearances which were effected. On the basis of material made available, SAIL was called upon to remit interest under Section 11AB of the Act. SAIL filed its objections. It is after considering the objections, the authority found that SAIL was liable to pay interest on a sum of 3 Rs.142 crores calculated based on the date of removal of the goods during the period from January, 2005 to July,2006. Various objections raised by the appellants were dealt with and they were found merit less. An appeal was carried before the Tribunal. The Tribunal relied upon the judgment of this Court in SKF India Ltd. Case (supra) and accordingly dismissed the appeal. Thereafter when the matter came up before this Court, a Bench of two learned judges after elaborately hearing the matter doubted the correctness of the decision in SKF case and also International Auto and hence the cases were referred to us in the decision reported in 2015 (16) SCC 107. We heard learned counsel for the parties.

9. At this juncture we think it apposite to refer to the facts in MRF case (MRF Limited v. Collector of Central Excise, Madras). MRF Case was decided on 12.3.1997 and it is reported in 1997 (5) SCC 104. The appeal was filed in this Court against the order passed by the Tribunal dated 24.9.1986. By the impugned order the assessee’s claim for refund of excess duty paid on differential price on the date of removal and the reduced price was rejected. The case set up by the assessee was that the price list was approved on 14.5.1983. Subsequently, there was resistance by the consumers. The Ministry of Commerce, Government of India, thereupon directed the manufacturer- assessee pursuant to a decision taken in a meeting of Manufacturers to bring down the prices to the pre 13 14.5.1983 level. On the basis of the same a difference in the prices arose. This led to a claim for refund. The Tribunal was of the view that the prices at the time of removal alone mattered. The subsequent reduction in the prices for whatever reason was totally irrelevant. Thereafter, the court proceeded to hold as follows:

Besides as rightly observed by the Tribunal the subsequent fluctuation in the prices of the commodity can have no relevance whatsoever so far as the 14 liability to pay excise duty is concerned. That being so, even if we assume that the roll back in the price of tyres manufactured by the appellant Company was occasioned on account of the directive issued by the Central Government, that by itself, without anything more, would not entitle the appellant to claim a refund on the price differential unless it is shown that there was some agreement in this behalf with the Government and the latter had agreed to refund the excise duty to the extent of the reduced price. That being so, we see no merit in this appeal brought by the assessee and dismiss the same with no order as to costs.”

(A) where under the rules made under this Act a periodical return, showing 20 particulars of the duty paid on the excisable goods removed during the period to which the said return relates, is to be filed by a manufacturer or a producer or a licensee of a warehouse, as the case may be, the date on which such return is so filed;

(B) where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules;

19. Now it is important that we delve upon the case of SAIL before the Commissioner, its stand in the appeal and finally before this Court. As already noticed SAIL sold and cleared rails to Indian Railways based on the price circular dated 24/04/2005. The transaction in question related to the period 01/01/2005 to July, 2006. Later, based upon a revised price circular dated 20/07/2006, the prices were revised and it took effect from 01/01/2005. The excise duty undoubtedly in a sum of Rs. 142.78 crores came to be paid by SAIL in August 2006. However, upon receipt of notice under Section 11AB of the Act calling upon it to pay more than Rs. 15 crores as interest under Section 11AB. SAIL raised various objections. It, in fact, contended that this is not a case of short payment 34 of duty as the price at the time of actual removal of goods formed the basis for which duty was duly paid. It was not liable to pay the differential duty. Rebutting the case of the department, it was contended that it was not liable to resort to provisional assessment under Rule 7. The Commissioner however, took the view that the price which were shown originally by SAIL was itself provisional. It was a case where the assessee should have invoked Rule 7 and proceeded to make the provisional assessment. In appeal before the Tribunal, the assessee-SAIL continued with its contention that it actually was not liable to pay the differential duty. The Tribunal as already noticed following the judgment of this Court in SKF case (supra) which came to be delivered by that time dismissed the appeal of the assessee. Before the Bench which referred the matters to this Bench 35 however, the appellants have made it clear that they are indeed liable to pay the differential duty. We have noticed that stand which has been expressly recorded by this Court in paragraphs 21-22 of the reference order.

Under Clause 5A of the Sugarcane (Control) Order 1966, additional price was payable which would be determined only at the end of the year. On the advice of the Government the manufacturer paid the additional price as advance at the time of purchase from the farmers and it was subsequently adjusted under Clause 5A. In proceedings under the Tamil 63 Nadu General Sales Tax Act 1959, the assessee showed the turnover on the basis of minimum price and paid tax thereon. It did not pay tax on the additional price which has been paid but it was included in the turnover. When the price was fixed under Clause 5A, the appellant filed revised return and paid tax. Interest was sought to be charged under Section 24(3) on the price fixed under Clause 5A from the date of purchase of sugarcane till the payment of tax. The appellants contended before this Court that the price determined under Clause 5A would be known only after it was determined. Only then the same would be includable in the returns. The advances given on advice from Government were merely ad hoc payments and did not constitute the price.

Explanation.—Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the period of six months, or five years, as the case may be.

(2) The Assistant Collector of Central Excise shall, after considering the representation, if any, made by the person on whom notice is served under sub-rule (1), determine the amount of duty due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined.

(3) Where the assessee disputes the rate of duty approved by the proper officer in respect of any goods, he may, after giving an intimation to that effect to such officer, pay duty under protest at the rate approved by such officer.

(b) the assessee intending to remove from the factory any non-excisable goods not mentioned in that list, or

(5) When the dispute about the rate of duty has been finalized or for any other reasons affecting rate or rates of duty, a modification of the rate or rates of duty is necessitated, the proper officer shall make such modification and inform the assessee accordingly.

56. Are cases of non-levy, non-payment, short-levy and short-payment mutually exclusive?. In other words, can it be said that in a case of non-payment, it would not be a case of non-levy? Do they overlap? If there is non-levy, will there by short levy at the same time. Finally, in a case of short levy, can there also be short payment?

…………………………………CJI.

May 08, 2019 114