J.K. COTTON SPPINNING AND WEAVING MILLS CO. LTD. versus COLLECTOR OF CENTRAL EXCISE

Citation: [1998] 2 S.C.R. 102 · Decided: 04-03-1998 · Supreme Court of India · Bench: M.M. PUNCHHI · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
J.K. COTTON SPPINNING AND WEA YING MILLS CO. LTD. 
v. 
COLLECTOR OF CENTRAL EXCISE 
MARCH 4, 1998 
B 
[M.M. PUNCHHI, CJ., K.T. THOMAS AND M. SRINIVASAN, JJ.] 
Central Excises and Salt Act, 1944 : 
Sections 35-L(b) and 1 I-A-Appeal to Supreme Court-Filed under an 
C inapplicable provision-Appeal filed against CEGA T's order holding the 
notices issued under Section 11-A within limitation-Held, such an appeal 
not covered by Section 35-L (b)-However, as all the papers for deciding the 
question involved available and more so nine long years have lapsed after 
filing of the appeal, the same is treated appeal by special leave-Constitution 
D of India, Article 136-Excise-Practice and Procedure. 
E 
F 
Extending the period of limitation-Mode of interpreting the same-
Held, shouid be construed strictly-Interpretation of-Statutes-Taxing 
statutes-Liberal and Strict construction. 
Section II-A(/), Proviso and Explanation-Recovery of excise duty-
Limitation-Notice issued by the Revenue under Section I I-A-High Court 
restraining the enforcement a/Circular dated 24-9-1980 issued by the Central 
Board of Exr;:ise and Customs-Held, did not amount to stay of issuance of 
notice-Thus; did not attract proviso in Explanation to Section I 1-A(J)-
Limitation-Central Excise Rules, 1944, Rules 9 and 49-Finance Act, 1982, 
Section 5!(2)(d). 
Section I l-A(3)(ii)(b)-Notice-Liniitation for issuance of-Revenue 
asserting that notice to be within limitation on two alternative grounds that 
the notice was saved by Expln. to Section 11-A ( 1) and that the preceding 
G assessment was only a provisional one-CEGAT upholding the first-Held, 
untenable-In such circ.umstances, whether Revenue can invoke the second 
ground-Held, CEGAT rightly held that the assessment was not a provisional 
one as in view of Rule 9-B of the Central Excise Rules that the matter was· 
sub-judice was not sufficient to render the assessment made during that 
period a provisional one-The right of the Revenue to adopt an alterative 
H contention would not enable it lo raise an absolutely new ground/or it-Hence 
102 
J.K. COTTON SPINNING AND WEAVING MILLS CO. LTD. v. C.C.E. 
103 
the new plea of Revenue that in view of Chapter VII-A of the Central Excise A 
Rules, the· assessment in question was a provisional one, summarily rejected-
Central Excise Rules, 1944, Rules 9-B & 173-F and Chapter VII-A Constitution 
of India, Article 136-Civil Procedure Code, 1908, Order 41 Rule 22. 
Practice and Procedure-New issues raised by the respondent-Held, 
not precluded from canvassing for reversal of any finding contained in the B 
impugned judgment despite its end result being in his favour-Appellant 
cannot say that the points raised by him only can be canvassed-Power of 
Supreme Court not fettered by absence of provision like Order 41, Rule 22 
of the CPC-Civil Procedure Code, 1908, Order 41 Rule 22. 
The appellant-assessee had a textile mill in which yarn was C 
manufactured in a particular division and processed in the mill for making 
fabric. According to the Revenue, there was removal of yam from one area 
of the factory and hence that commodity was exigible to excise duty as per 
Rules 9 and 49 of th~ Central Excise Rules, irrespective of the excise duty 
payable on manufacture of fabric. The Department, therefore, issued two D 
notices under Section 11-A of the Central Excises and Salt Act for recovering 
the excise duty for the period November 1980 to December 1981. By a 
Natification dated 20-2-1982, the Department amended Rules 9 and 49 of the 
Central Excise Rules creating a fiction of "deemed removal" of the input 
goods at the intermediary stage within the factory. The said amendment was 
later incorporated in Section 52(2)(d) of Finance Act, 1982 retrospectively E 
from 1944. This amendment was upheld by this Court in J.K Cotton Spinning 
& weaving Mills Ltd. v. Union of India subject to the provision of Section 
11-A of the Act The main question in this appeal was whether the order 
passed by the High Court in an earlier case, staying the implementation of 
the Central Board of Excise and Customs Circular dated 24-9-1980 amounted F 
to an order staying the issuance of show-cause notice and had the effect of 
extending the period of issuance of notice under Section 11-A of the Act by 
virtue of Explanation to that section. This question was answered by the 
CEGAT in the affirmative and against the assessee. Hence this appeal. 
One of the preliminary objections raised by

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