OUDH SUGAR MILLS LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) By the pesent writ petition, petitioner is praying for quashing of orders dtd. 26/8/1992 passed by Assistant Collector, Excise, Sitapur whereby demand for tax liability was confirmed as well as order dtd. 8/1/1993 passed by Assistant Collector (Appeals), dismissing petitioner's appeal against the order dtd. 26/8/1992 and order dtd. 5/2/1999 passed by the Customs, Excise and Gold Appellate Tribunal.

(2.) Brief facts of the case are that the petitioner company is involved in the manufacturing of sugar, which is subjected to levy of Central Excise. In order to incentivise sugar mills to continue manufacturing during the lean season the Central Government by notification dtd. 28/4/1978 offered rebate on Central Excise levied on all sugar produced between 1/5/1978 to 30/9/1978 in excess of the average production of the corresponding period of the preceding three years. On 14/8/1978, the earlier notification was modified and the rebate was now applicable on excess production between 1/5/1978 to 15/8/1978. Petitioner too submitted his claim for rebate on excess production for the relevant period. The same was allowed vide order dtd. 4/10/1978 and a rebate of Rs.16,79,339.65 was credited into the Personal Ledger Account of the petitioner mill. On 8/4/1980 a demand cum show cause notice under Rule 10 of Central Excise Rules, 1944 (hereinafter referred to as Rules of 1944) was served upon the petitioner for recovery of Rs.1,65,878.34 allegedly claimed and received by petitioner in excess of actual rebate due to the petitioner mill. On the basis of petitioner's reply, by impugned order dtd. 26/8/1992 demand of Rs.1,65,878.34 is confirmed against the petitioner and appellate authorities have also rejected his appeals by impugned orders dtd. 8/1/1993 and 5/2/1999.

(3.) Counsel for the petitioner challenges the impugned orders on the ground that the order dtd. 4/10/1978, approving petitioner's claim for rebate of Rs.16,79,339.65 is final and therefore demand notice dtd. 8/4/1980 for recovery of Rs.1,65,878.34 is time-barred. As per Rule 10 of the Rules of 1944 no demand can be made after a period of six months, while show cause notice for recovery of rebate is issued after almost eighteen months and is therefore clearly time-barred. He further challenges the finding that the order dtd. 4/10/1978 approving the rebate is passed on the basis of provisional assessment and therefore not hit by the statutory limitation of Rule 10 of the Rules of 1944. He further submits that the limitation of six months is not applicable only on such final assessment which are obtained by fraud, collusion, wilful misstatement or suppression of facts and since it is not alleged in the show cause notice, said Rule is therefore, not applicable in the present case. In support of his case counsel for the petitioner relies upon judgment of the Supreme Court in the case of Raj Bahadur Narain Singh Sugar Mills Ltd. vs Union of India and Ors.; (1997) 6 SCC 81.