COLLECTOR OF CENTRAL EXCISE, JAIPUR versus M/S. RAGHUVAR (INDIA) LTD.

Citation: [2000] SUPP. 1 S.C.R. 236 · Decided: 11-05-2000 · Supreme Court of India · Bench: G.B. PATTANAIK

Judgment (excerpt)

A 
B 
COLLECTOR OF CENTRAL EXCISE, JAIPUR 
v. 
Mis. RAGHUV AR (INDIA) LTD. 
MAY 11, 2000 
[G.B. PATTANAIK, DORAISWAMY RAJU 
AND S.N. VARIAVA, JJ.] 
Central Excises and Salt Act, 1944-Section I I A-Central Excise 
C Rules, 1944-Rule 57, I as it existed on 6.10.88-Recovery of MODVAT 
availed wrongly-Whether, S. l IA applicable for MOD VAT recovery prior to 
6.10.88-Held, No. 
Practice and Procedu;-e-Recovery of wrongly availed MODVAT-No. 
Period of limitation prescribed for-Held, Courts cannot import any period 
D of /imitation by implication-Provision being destructive of rights, must be 
specifically enacted-Central Excises Salt Act, 1944. 
The Respondent Assesee who was holding a license for manufacture of 
the vegetable products, filed a declaration under Rule 57 G of the Central 
Excise Rules, 1944 on 10.3.1987 for adoption ofMODVAT Credit in respect 
E of certain inputs used by it in the manufacture of vegetable products. The 
assessee became entitled to avail the credit only on and after 10.3.1987. But 
the assessee wrongly availed the credit facilities even from 1.3.1987. The 
Appellants sent a Show Caust~ Notice for recovering the sum wrongly availed 
by the assessee under S.11 A of the Central Excises and Salt Act, 1944 read 
F with Rule 57 I of the Central Excise and Salt Rules, 1944. The Assistant 
Collector directed the reversal of the credit wrongly taken by the assessee. 
The Assistant Collector held that filing of a declaration being a statutory 
necessity and a condition precedent to avail of credit the assessee was not 
eligible to take the same for a period prior to the declaration. The assessee 
raised a plea of limitation that notice has not been issued within a period of 6 
G months as provided under S.llA of the Act of 1944. The plea of limitation 
was rejected on the ground that a letter dated 10.8.1987 had been issued by 
the department to the assessE>e to debit the credit wrongly taken and this was 
well within the 6 months period. The appeal filed by the assessee before the 
Collector (Appeals) was rejected. The asessee filed an appeal before the 
H Tribunal wherein it was held that the show cause notice was beyond a period 
236 
C.C.E. v. RAGHUVAR (INDIA) LTD. 
237 
of 6 months and that even for demanding reversal of credit already taken, in A 
exercise of Rule 57.1, the provisions ofS.llA would get attracted necessitating 
the raising of the demand within 6 months. 
On a reference before this Court, the Revenue relying upon the decision 
of the Gujarat High Court in Torrent Laboratories Case, contended that the 
provisions ofS.llA of the Act had no application wha.tsoever to the case and B 
that being a special provision with self contained machinery to enforce them, 
a general provision like S.llA is unwarranted. The Respondent assessee, 
relying upon Judgements rendered by various High Courts contended that 
the impugned proceedings involved recovery and consequently a demand of 
an amount not paid, S.1 lA of the Act would necessarily get attracted and, C 
therefore, the view taken by the other High Courts different from the one 
taken by the Gujarat High Court, would more accord with law, that once the 
credit taken has also been utilised by adjustment against payment of excise 
duty on articles manufactured, the question would always be one of recovery 
of duty or a demand for payment and that whatever may be right or otherwise 
of the proper office to order for reversal of the credit earned before it was D 
actually utilised or adjusted, on and after actual utilisation by adjustment, at 
any rate no question of the reversal of the credit would arise. 
Answering the Reference in favour of the Revenue, the Court 
HELD : 1. The provisions of Section 11 A of the Central Excises and E 
Salt Act, 1944 would have no application to any action taken under Rule 57 
I of the Central Excise and Salt Rules, 1944, prior to its amendment on 
6.10.88, and Rule 57 I of the Rules are not in any manner subject to Section 
llA of the Act. Any law or stipulation prescribing a period of limitation to do 
or not to do a thing after the expiry of period so stipulated has the consequence F 
of creation and destruction of rights and, therefore, must be specifically 
enacted and prescribed. 
It is not for the Courts to import any specific period of limitation by 
implication, where there is really none, though Courts may always hold when 
any such exercise of power had the effect of disturbing rights of a citize

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