COLLECTOR OF CENTRAL EXCISE, CHANDIGARH versus DOABA CO-OPERATIVE SUGAR MILLS LTD., JALANDHAR

Citation: [1988] SUPP. 2 S.C.R. 458 · Decided: 16-08-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

A 
COLLECTOR OF CENTRAL EXCISE, CHANDIGARH 
B 
v. 
DOABA CO-OPERATIVE SUGAR MILLS LTD., 
JALANDHAR 
AUGUST 16, 1988 
[SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.] 
Central Excises and Salt Act, 1944: Sections llA. llB, 35A(2) 
and 35L (b)-Excess production rebate-Erroneously granted-Show 
cause notice issued for recovery-Whether valid and permissible-
C Refund of duty recovered without authority of law-General law 
applicable-Refund claims before departmental authorities-Limita-
tion provided under Customs/Central Excise Act and Rules thereunder 
applicable. 
Limitation Act, 1963: Limitation-Computation of-Duty levied 
Ii> 
without authority of law-General law applicable-Starting point-
When mistake or error comes to light. 
The Superintendent of Central Excise issued a show cause notice 
on November 15, 1981 to the respondent for recovery of 'excess produc-
tion' rebate erroneously g~anted under Notification No. 108/78. The 
E 
Assistant Collector, however, on July 31, 1982 held that there was no 
excess Production because of wilful incorrect statement or suppression 
of facts and so held that the notice was barred by lapse of time and 
dropped the demand. 
The Collector of Central Excise exercising powers under Section 
F 
35A(2) 'Of the Central Excises_ and Salt Act, 1944 issued a review show-
cause notice on October 6, 1982 and adjudicated the case thereafter. 
G 
' 
The Central Excise and Gold (Control) Appellate Tribunal having 
allowed the appeal of the respondent, the Revenue challenged the said 
order in this Court. 
Dismissing the Appeal, 
HELD: l. Section llA of the Act would come into operation only 
when the demand is on account of Central Excise duty short levied or 
not levied or refunded erroneously. The issue in the instant case, was 
H 
not any of the said reasons. [460E-i 
458 
C.C.E. v. DOABA CO-COPERATIVE SUGAR MILLS IMUKHARJI, J.] 459 
2. Where the duty has been levied without the authority oflaw or 
without r.eference to any statutory authority or the specific provisions of 
the Act and the Rules framed thereunder have·no application, the deci-
sion will be guided by the general law and the date of limitation would 
be the starting point when the mistake or the error wolild come into. 
light. [460F] 
3. In making claims for refund before the departmentlal author-
ity, as assessee is bound within the four corners of the Statute and the 
period of limitation prescribed in the Central Excise Act and the Rules 
framed thereunder must be adhered to. The authority functioning 
under the Act are bound by the provisions of the Act. If the proceedings 
are taken under the Act by the department the provisions of limitation 
prescribed in the Act will prevail. [460G] 
4. It may, however, be open to the department to initiate pro-
ceedings in the Civil Court for recovery of the amount due to the 
department in case such a remedy' is open on the ground that the money 
received by the assessee was not in the nature ofrefund. [460H] 
Miles India Ltd. v. Assistant Collector of Customs, [1985] ECR 
289 referred to. 
CIVIL APPELLATE JUR~SDICTION: Civil Appeal No. 283 
A 
B 
c 
D 
of 1988. 
E 
From the Order dated 9 .10.1987 of the Customs Excise and Gold 
Control Appellate Tribunal, New Delhi in Appeal No. F-1744/83-D 
(Order No. 808/87-D). 
M.K. Banerjee, Solicitor General, R.P. Srivastava and Mrs. 
F 
Sushma Suri for the Appellant. 
M. G. Ramachandran for the Respondent. 
The Judgment of the Court was delivered by 
SABYASACHI MUKHARJI, J. This is a statutory appeal 
against the decision of the Customs, Excise and Gold (Control) Appel-
late Tribunal, under Section 35L(b) of the Central Excises & Salt Act, 
1944 (hereinafter called 'the Act'). 
A sum of Rs.5,60,679.40 was sanctioned to the respondent on 
G 
H 
I 
460 
SUPREME COURT REPORTS 
(1988] Supp. 2 S.C.R. 
A the basis of Notification No. 108/78 as an incentive for excess produc-
tion. On 18.5.1979, the said sum was credited to the Personal Ledger 
Account of the dealer. On 5th November, 1981, the Superintendent of 
Central Excise issued a show cause notice asking the respondent to 
show-cause as to why the sum of Rs.66,306,62, granted in excess under 
the aforesaid notification, be not recovered from it. 
B 
c 
On 31. 7 .1982, the Asstt. Collector, however, held that there was 
no excess production because of wilful incorrect statement or suppres-
sion of facts by the respondent. In the premises, he held that the nofice 
was barred by lapse of time accord
Excerpt shown. Read the full judgment & AI analysis in Lexace.