Case Note & Summary
The petitioner, Krishnakant Sakharam Ghag, a partner of M/s Amit Textile Processors, filed a writ petition in the Bombay High Court challenging the validity of Notification No.48/97-CE dated 2/9/97 amending Notification No.68/63-CE, and seeking a declaration that the order in original dated 24/12/1991 demanding interest on delayed payment of excise duty was illegal. The petitioner also sought lifting of attachment levied on his property for recovery of such interest. The core legal issue was whether Section 12 of the Central Excise Act, 1944 empowers the Central Government to import recovery provisions of the Customs Act, 1962 for recovery of interest on delayed excise duty. The petitioner argued that Section 12 does not permit such import and that the notification was ultra vires. The respondents, Union of India and excise authorities, contended that Section 12 expressly allows application of Customs Act provisions for recovery of excise duties. The court analyzed Section 12 and held that it empowers the Central Government to apply the provisions of the Customs Act, including Section 142 which provides for recovery mechanisms such as attachment, for the purpose of recovery of duties imposed under the Excise Act. The court found that interest on delayed payment is part of the duty and thus recoverable. Consequently, the court dismissed the petition, upholding the validity of the notification and the recovery action.
Headnote
A) Central Excise - Recovery of Interest - Section 12 of Central Excise Act, 1944 - Validity of Notification - The petitioner challenged Notification No.48/97-CE as ultra vires Section 12, arguing that Section 12 does not empower import of recovery provisions of Customs Act for interest on delayed duty. The Court held that Section 12 expressly empowers the Central Government to apply Customs Act provisions for recovery of duties imposed under the Excise Act, and the notification is valid. (Paras 1-2) B) Central Excise - Recovery of Interest - Section 12 of Central Excise Act, 1944 read with Section 142 of Customs Act, 1962 - Attachment of Property - The petitioner sought lifting of attachment levied on property for recovery of interest on delayed payment of excise duty. The Court held that interest is recoverable as duty under the Excise Act and the revenue can invoke recovery provisions including attachment under Section 142 of Customs Act as imported by Section 12. (Paras 1-2)
Issue of Consideration
Whether Notification No.48/97-CE dated 2/9/97 amending Notification No.68/63-CE is ultra vires Section 12 of the Central Excise Act, 1944 and whether interest on delayed payment of excise duty can be recovered by invoking recovery provisions of the Customs Act, 1962
Final Decision
The petition is dismissed. The court upheld the validity of Notification No.48/97-CE and held that interest on delayed payment of excise duty is recoverable under Section 142 of Customs Act as imported by Section 12 of Central Excise Act.
Law Points
- Section 12 of Central Excise Act
- 1944 empowers Central Government to apply Customs Act provisions for recovery of excise duties
- Notification No.48/97-CE dated 2/9/97 amending Notification No.68/63-CE is intra vires Section 12
- Interest on delayed payment of excise duty is recoverable under Section 142 of Customs Act
- 1962 as imported by Section 12 of Central Excise Act
