MOHINDER STEELS LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appellants are Hot Re -rolling Steel Mills discharging their Central Excise duty liability at compounded rates on the basis of capacity of their production in terms of Section 3A of the Central Excise Act. They filed declarations under Hot Re -rolling Steel Mills Annual Capacity Determination Rules, 1997 before the Commissioner of Central Excise, Chandigarh declaring relevant particulars of the machinery installed in their mills for determination of Annual Capacity of production by the Commissioner and the Commissioner passed orders determining such capacity in each case. However, duty amounts due under those orders were not paid by the appellants. The dispute arising in these appeals relates to the procedure for the recovery of duties at compounded rates. When the appeal came before a Division Bench of this Tribunal it was contended that demands were partly or fully time barred as recovery proceedings had not been initiated in time in terms of Section 11A of the Central Excise Act. This contention was raised relying on the Division Bench decision of this Tribunal in Appeal Nos. E/401 -405/2001 -NB (DB), dated 21 -9 -2001 in the case of Shri Guru Hargobind Steel Industries . Vide Final Order Nos. A/718 -722/2001 -NB (DB), dated 27 -8 -2001 [ : 2001 (136) E.L.T. 1047 (T)]. As the Division Bench which heard the present appeals doubted the correctness of the view taken in the case of Shri Guru Hargobind Steel Industries the matter was referred to a Larger Bench. This Larger Bench has been constituted to consider the reference. The reference itself is reproduced as under : -

(2.) IN the light of the provisions contained under Rule 96ZP, in the nature of declaration given by the assessee opting for the procedure under Rule 96ZP and also in the light of the direction given by the High Court of Punjab and Haryana in the petition filed by the assessee we find it difficult, prima facie, to accept the view taken by the Bench in the above order. We therefore refer this matter for consideration by a Larger Bench. Post for hearing on 14 -1 -2002".

(3.) LEARNED Counsel for the appellants submitted that even under other tax laws, quantification of tax has to be undertaken in terms of the relevant section or rule. In this connection, reference has been made to the decision of the Apex Court in the case of Harshad Shantilal Mehta v. Custodian and Others (S.C.) : 1998 (231) ITR 871. Learned Counsel also relied upon the decisions of this Tribunal in the case of Collector of C. Ex., Vadodara v. Mafatlal Fine Spg. & Wvg. Co. Ltd., : 1995 (79) E.L.T. 715 in support of the submission that time limit as prescribed in Section 11A has to be observed for recovery of duty. The learned Counsel also pointed out that in the light of decision of the Madras High Court in the case of Eternit Everest Ltd. v. Union of India, : 1997 (89) E.L.T. 28 (Mad.) it is clear that in the absence of machinery provision for recovery of amounts under a statute, no recovery action could be taken. It was explained that in the case of Eternit Everest Ltd., in regard to deposit of duties collected under Section 11D of the Central Excise Act, 1944, the High Court had held that in the absence of a machinery provision, even if payments are due to the Government, the amounts cannot be recovered. The learned Counsel contended that demands in these appeals have become time barred as action in terms of the relevant legal provision (Section HA) had not been taken on time.