[Order per : G.R. Sharma, Member (T)]. - The above ten appeals were taken up together as the issue involved all these ten appeals is the same. These are being, therefore, disposed of by this common order.
2. The issue for determination in all these ten appeals is whether any amount representing Central Excise Duty collected can be retained in view of the fact that Section 11D provides that “Every person who has collected any amount from the buyer of any goods in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government.”
3. The facts of the case are that scrutiny of the documents revealed that the appellants had collected excess amount as duty of excise during the period after 20-9-1990. Section 11D was introduced in the Central Excise Act, 1944 with effect from 20-9-1991. The lower authorities held that the amounts collected as Central Excise duty should be deposited forthwith. Being aggrieved by these orders, the appellants have filed the present ten appeals.
4. Arguing these ten appeals, Shri Vinay Garg, ld. Advocate for the appellants submits that the appellants are engaged in the manufacture of sugar; that with the object of augmenting sugar production and with a view to achieving the production targets, the Government of India formulated a scheme in 1976 to provide incentives to new sugar factories and expansion projects; that subsequently, the Government of India modified the scheme in 1980 and further in 1987.
5. In pursuance of the above scheme, notifications were issued by the Ministry of Food and Civil Supplies dealing with various aspects of the scheme. By way of incentive scheme, the factories falling in the specified category were allowed in addition to normal free sale quota, an additional free sale quota which was to be cleared by the factory on payment of Central Excise duty as applicable to levy sugar. The Ministry of Finance in pursuance of this scheme issued exemption Notifications No. 130 & 131/83-C.E. both dated 27-4-1983. The ld. Counsel submits that the classification lists and RT 12 returns were approved and assessed without any objection. He submits that surplus funds generated by availing exemption benefit, the appellants were required to utilise the funds for repayment of loans and outstanding balances of the financial institutions.
6. The Department, however, proposed to demand duty under Section 11D collected in excess as Central Excise duty from the buyers during the period after 20-9-1991. The ld. Counsel submits that 11D perusal would show that it restricts only the order or direction of the Appellate Tribunal or any court or any other provisions of the Central Excise Act and Rules if the same is contrary to provisions of Section 11D. He submits that it is pertinent to note that this section does restrict the provision contained in any other law as such. He submits that the scheme under which the appellants were entitled to avail the benefit cannot be brushed aside by the provisions of Section 11D. He submits that if the intention of the Government was to withdraw the incentive scheme of 1987 then they should have rescinded the Notification Nos. 130 & 131/83-C.E. He submits that these notifications continued up to 1994 and that the scheme was discontinued from 1994 onwards. He submits that Section 11D of the Act was introduced with effect from 20-9-1991, it cannot be made applicable retrospectively and, therefore, the demand for the period prior to 20-9-1991 could not be confirmed. He also submits that the legislature had deliberately left the incentive scheme from the purview of Section 11D. He also argues that these points were raised before the Collector but the Collector did not deal with these points adequately. He also contends that since Section 11D did not restrict the benefit of incentive scheme that is retaining differential amount of duty collected by them. He submits that the demand was time barred and hence same was not maintainable.
7. In support of the impugned order, Shri P.K. Jain, ld. SDR submitted that no doubt Government of India prepared an incentive scheme for new factories and expansion projects. However, for Central Excise purposes, the scheme was governed by Notification Nos. 130 & 131/83-C.E. He submitted that the Central Excise Authorities cannot exercise the power in respect of notification, if any, issued by a different wing of the Government of India unless that notification is supported by issue of notification under the Act administered by the Central Excise and Customs Authorities. Thus, the incentive scheme was restricted by the provisions of these two notifications. He submitted that these two notifications allowed exemption to clearance as additional entitlement under the incentive scheme, from so much of the additional duty of excise leviable thereon under the Additional Duty of Excise Act, 1957 as is in excess of amount collected at the rate of Rs. 19 per quintal. He submitted that similar notification was issued exempting sugar factories on clearance of sugar as additional entitlement under the incentive scheme from so much duty of excise leviable thereon under the said Act at the rate specified in the first Schedule as in excess of amount collected at the rate of 19/- per quintal. The ld. SDR submitted that these two notifications permitted the specified sugar factories to clear the additional entitlement at a particular rate and did not authorise these specified sugar factories to collect any amount in excess of the amount permitted by these two notifications. He submitted that the provisions of Section 11D are very clear and that there was no scope of doubt that any person who has collected any amount from the buyer of any goods in any manner as representing duty of excise shall forthwith pay the amount so collected to the credit of the Central Government.
8. On the question of limitation, ld. SDR submitted that the gate passes did not show that the additional amount of duty was collected by the appellants and, therefore, there was suppression and the demand has rightly been raised beyond the period of six months. He submitted that in view of the above submissions and legal position as indicated above, the lower authorities have rightly confirmed the demand of duty and, therefore, prays that these ten appeals may be rejected.
9. Heard the submissions of both sides. We note that the Government of India prepared an incentive scheme for increasing the production of sugar indigenously. Certain conditions were specified for availing the scheme by the Ministry of Food and Civil Supplies. The Government of India Ministry of Finance issued Notification Nos. 130/83 and 131/83-C.E. both dated 27-4-1983. In the meantime, the Government of India amended the Central Excise Act and introduced Section 11D with effect from 20-9-1991. Under this new scheme, no one was authorised to retain an amount collected as Central Excise duty. In the instant case, the appellants were paying duty at the concessional rate under Notification Nos. 130/83 & 131/83-C.E. but in the invoices they were collecting duty as was applicable to free sale sugar, meaning thereby they were collecting additional sums as duty. The Department observed that this difference became known only when they scrutinised the invoice of the appellants, therefore, the Revenue issued a show cause notice asking them to explain as to why the amount so collected should not be demanded from them and confirmed these demands. The contention of the appellants was that the provisions of Section 11D were not applicable to them. Firstly, that part of the demand belonged to the period before 20-9-1991 and that susequently on or after 20-9-1991. Since the scheme of incentive was not withdrawn, therefore, the incentive was admissible to them. We have considered the contentions of both sides on this issue. We note that the rate applicable to additional entitlement was specified in the above two notifications issued by the Ministry of Finance. Under the incentive scheme the differential amount of duty could be used by the sugar factories for payment of loans etc. In the meantime, we find that Section 11D was introduced; with the introduction of Section 11D it became essential for every one to deposit forthwith any amount so collected as duty of excise; that with the coming into force of Section 11D, therefore, it was essential for every one who had collected any amount representing Central Excise duty to deposit with the Government. In the instant case, the appellants in their invoices collected Central Excise duty equal to the amount applicable to free sale sugar, therefore, they were required to deposit additional amount of duty that is difference between the amounts actually paid to the Government and the amount actually collected by them, to the Government forthwith. We, therefore, find that the impugned orders do not suffer from any legal infirmity. Therefore, the amounts collected as duty and not deposited with the Government and confirmed as demands are sustainable in law. However, the amounts collected before 20-9-1991 will not be subject to the provisions of Section 11D and will have to be dealt with separately. For collecting duty on the amounts collected as duty before 20-9-1991 the amounts collected as differential duty shall have to be dealt with under Section 4(4)(d)(ii)(a).
10. We note that the limitation was also argued before us. From the facts placed before us, we find that the appellants were collecting differential duty in their invoices and copies of invoices were not attached with the RT 12 returns. This collection of differential duty was noticed as a result of scrutiny of other documents. Thus, there was suppression of facts and mis-statement. Since the less amount of duty was paid, there was an intention to evade payment of duty. In the circumstances, we hold that the period of demand beyond six months has rightly been invoked and is sustainable in law.
11. A plea of estoppel was also raised before us but we note that the plea of promissory estoppel cannot be applicable in fiscal matters.
12. In view of the above findings, the impugned orders are modified to the extent stated above and these ten appeals are disposed of accordingly.
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