Law: Central Excise Rules, 1944

Section: 10

Law: Central Excise Act, (I of 1944)

Section: 4(2)

[Central Excise Rules, 1944]........R 10---Central Excise Act (I of 1944), S.4(2)---Central Excise General Order 23 of 1969---Recovery of duty short levied---Application and scope of R.10, Central Excise Rules, 1944---Word "error" used in R.10 denotes one of fact as well as of law---Where there was nothing on the record to demonstrate any misdeclaration, false information or collusion and short levy of duty was by reason of misconstruction of the law, the case fell within the ambit of R.10(1), Central Excise Rules, 1944 in which event show-cause notices were time-barred---Supreme Court having held the show-cause notices as time-barred, declined to discuss the merits of the case---Principles. A plain reading of Rule 10(1), Central Excise Rules, 1944 would amply denote that it would be applicable in the cases where due to no fault either of the assessee or the Department any charge has not been levied or has been short levied or erroneously refunded. The thrust of the Rules, therefore, is that there should have been some inadvertent error or misconstruction in the process of payment of duty due to no fault of either party which led to the short levy, refund etc. The word error denotes one of fact as well as of law. On the other hand sub-rule (2) contemplates a conscious act on the part of the assessee i.e. an element of mens rea is involved since the words misdeclaration, false information or collusion are in fact a state of mind in which the actor knows what he is doing and purposely does something i.e. either misdeclares a product in question or gives any false information in connection thereof or colludes with anyone in order to avoid payment of the duty or pays lesser duty than that mandated by the law and the rules. In the present case, assessee, had written to the Department seeking its concurrence for supply of Cement to the Army at the contractual rate which was lesser than the normal retail price and hence implied payment of lesser excise duty. Such permission was granted by the Department provided the conditions laid down in CEGO No.23 of 1969 were followed and a declaration was made that the Cement was not meant for sale in the open market. The…

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