P.K. Kapoor, Member (T)
1. The appellants had originally filed an appeal against order dated 13.10.1986 passed by the Collector of Central Excise (Appeals) disposing of two appeals which involved common issues. The said appeal was received in the Registry on 12.10.1987. The appellants have also filed a supplementary appeal which was received on 30.10.1991. Having regard to the fact that the appeal dated 13.10.1986 against the common order passed by the Collector (Appeals) was filed within the prescribed period, we condone the delay in filing of the supplementary appeal.
2. Since the above captioned appeals emerge from a consolidated order passed by the Collector of Central Excise (Appeals), the same are disposed of by this consolidated order.
3. Appearing on behalf of the appellants, the learned Advocate Shri L.P. Asthana drew the attention, of the Bench to the Misc. application dated 19.8.1991 in which the appellants have made a prayer for raising an additional ground of appeal. He stated that the appellants could not raise this ground of appeal before the lower authorities and in the memo of appeal as they were not correctly advised. He pleaded that the appellants were prevented by sufficient cause from raising the ground of appeal earlier and they shall suffer an irreparable loss in case they are not permitted to raise the fresh ground of appeal at this stage. Shri Asthana referred to the Assistant Collector's order No. 33/84 dated 23.3.1984 and stated that the demand for payment of excise duty for the period January, 1982 to July, 1983 on packing charges, and Heat run and Impulse charges in respect of transformers was raised by the Superintendent by making endorsements on the relevant RT-12s. He added that similarly the Assistant Collector's order No. 44/84 dated 2S.8.1984 shows that demand for payment of duty on test charges, packing charges and repair charges of transformers for the period October, 1983 to March, 1984 was made on RT-12 statements. He contended that in both cases the demand issued by virtue of the assessment order on RT-12 has to be deemed void since it has been held by the Hon'ble Supreme Court in the case of Collector of Central Excise, Baroda v. Kosan Metal Products Limited that when
any duty of excise has not been levied or paid or has been short levied or short paid a demand for the recovery of such amount must be made under Section 11A of the Central Excises and Salt Act, 1944 and not by short entry on RG-12, which cannot be taken to be proper show cause notice. Shri Asthana pleaded for the prayer for the addition of the fresh ground to memo of appeal being allowed since it was purely a question of law which could be decided on the basis of the evidence on record without adducing additional evidence. He prayed- that after incorporation of the additional ground in the memo of appeal, the impugned order may be set aside, on consideration that the demands raised through short entry on RT-12 was illegal and void.
4. On behalf of the Revenue the learned SDR Shri V.K. Jain opposed the plea for the admission of the additional ground. He contended that it was not permissible for the appellants to canvass before the Tribunal any ground which was not raised either at the original or the first appellate stage. He pleaded for the rejection of the appeals on the ground that it had been correctly held by the lower authorities that in respect of the goods in question the impulse test charges and packing charges formed a part of the assessable value.
5. We have examined the records of the case and considered the submissions made on behalf of the both sides. Taking up first the appellant's plea for addition of a fresh ground to the memo of appeal we find that new ground sought to be raised at this stage relates to the question whether in absence of a show cause notice under Section HA, a demand raised by making an entry in RT-12 can be deemed as valid and legal. In this regard it is seen that relying upon the judgement of the Hon'ble Supreme Court in the case of Commissioner of Sales Tax v. Sarjoo Parsad Ram Kumar reported in 1976 (37) STC 533 the Tribunal had held in the case of Shri Kanwal Pal Singh and Ors. v. Collector of Customs, Kanpur that a new legal ground
can always be raised at any stage of the proceedings even if not raised before the lower authorities provided such ground is backed by sufficient material on record. In our view the point raised in the additional ground which the appellants have sought to add to the memo of appeal is purely legal in nature and is backed by sufficient material on record. We, therefore, allow the request of the appellants and order that following additional ground of appeal proposed by them should be read as the last ground of appeal in Memo of appeal in form No. CA-3 filed by the appellants.
That a demand for short levy can be issued under Section 11A of the Central Excises & Salt Act only and, therefore, any demand on RT 12 is illegal, void and without jurisdiction. In the present cases, as may be seen from the orders passed by the Assistant Collector, the demands were issued and confirmed on the basis of RT 12. Therefore, such demands not having been issued under Section 11A are illegal, void without jurisdiction and time barred and both the original and appellate orders should be set aside for this reason.
6. Having allowed the appellants' requests for raising the fresh ground we proceed to dispose of the appeals. It is seen that the only point that has been urged by the appellants is that the order Nos. 33/88 dated 23.3.1984 and 44/88 dated 25.8.1984 confirmed by the impugned order, were illegal since in both cases the Assistant Collector had confirmed the demands raised by the Superintendent on RT-12. In this regard we find that it has been laid down by the Hon'ble Supreme Court in the case of CCE, Baroda v. Kosan Metal Products Ltd. that when any duty of excise has not been levied or paid or has been short levied or short paid a demand for recovery of such amount must be made under Section 11A of the Central Excises and Salt Act, 1944 and not by short entry on RT-12 which cannot be taken to be proper show cause notice. The relevant extract from the said decision is reproduced below:
The main question that was necessary to be decided in this case was whether proper notice had been issued. On the facts of the case, it does not appear that proper notice was issued. Merely on the ground of short entry in RT-12, Rule 11A would not be attracted. The same view appears to have been taken by the Kerala High Court in Good Shepherd Rubber Company's case 1978 ELT 66. When in such circumstances, a demand is made under the Act for recovery then such demand must be under Section 11A of the Act.
7. On a simple perusal of the orders dated 23.3.1984 and 25.8.1984 which were confirmed by the impugned order we find that the Assistant Collector had confirmed the demands which were raised on RT-12 by the Superintendent and no notice as required under Section 11A was issued for the recovery of duty on test charges and packing charges. Hence, on the ratio of the Supreme Court's decision quoted above we hold that the orders of the Assistant Collector confirming the demands were not sustainable and on that account we hold that the impugned order passed by the Collector (Appeals) has to be set aside.
8. The appeals are, therefore, allowed.