' NASEEM SIKANDAR, .T.---The appellants are manufacturers of Poly Propylene Bags/Fabrics. They were served with a show-cause notice on various dates alleging non-payment of Central Excise Duty for the period from July, 1996 to June, 1998. .
2. In reply it was claimed that Poly Propylene strips were a kind of material which was used for the manufacture of the end product such as bags and fabrics and that these strips by themselves were not "goods" nor these were vendable as such to attract the levy of central excise duty.
' Secondly, that show-cause notice was barred by time because nonpayment of duty being due to misconstruction, error or inadvertence on their part, was covered by rule 10(1) of the Central Excise Rules, 1944 which prescribed a period of limitation of one year from the relevant date. According to the appellants the show-cause notices having been issued to them after the expiry of the statutory period, a valuable right of escapement of duty in their cases had accrued to them.
3. The Adjudication Authority, however, disagreed and found the appellants to be liable to pay not only the evaded central excise duty but also additional duty and penalties of Rs,25,000 each.
4. The appellants failed before the first appellate authority in toto. However, the Tribunal accepted their appeals only to the extent of additional duty leviable under section 3(b) of the Central Excise Act, 1944 and the penalties of Rs,25,000 each. As far the evaded excise duty was concerned, the Tribunal refused to interfere. Earlier the Tribunal rejected the two submissions made for the appellants. The first being that a charge of excise duty was not attracted in their cases and secondly that show-cause notices having been issued after expiry of period of one year they could not be required to make any payment of the alleged evaded duty. The first contention was rejected with reference to a judgment of the Supreme Court of. Pakistan dated 2-6-2000 passed in re-Adil Polypropylene Ltd v. Federation of Pakistan by which five appeals against the judgments of the Peshawar High Court and six appeals against the judgments of the Lahore High Court were disposed of.
5. As for the second objection, it was noted by the Tribunal that on the Constitutional petitions challenging the levy, this Court issued a restraint order which remained in operation till the rejection of the petition filed by the appellants. The Tribunal agreed with the Revenue that if the period of interim injunction allowed to the appellants was excluded the show cause notices issued to them and the levy imposed fell well within the limitation prescribed by rule 10(1) of the aforesaid Rules.
6. After hearing the learned counsel for the parties at preadmission stage we are of the view that the appellants have no case at all. Even if their contention that Article 15 of the Limitation Act, 1908 referred to by the Tribunal was not attracted to the case of the appellants is accepted, the fact remains that the Department could not proceed to recover the levy on account of restraint order issued by this Court.
7. The other side of the argument is equally untenable. It is that since under Article 199 (4-A) of the Constitution a stay or interim restraint order issued by this Court automatically lapses after six months the total period during which interim relief given by this Court remained in currency could not be excluded. It is stated that at best the maximum period for which a stay order issued by this Court could possibly remained in the field was liable to be excluded and if it was so done notices as well as the levy was clearly barred by time.
8. Learned counsel for the appellants in support of his submissions has heavily relied upon a judgment of the Hon'ble Supreme Court of Pakistan in re: Zahur Textile Mills v. Federation of Pakistan (PLD 1999 SC 880).
9. In that judgment the Hon'ble Supreme Court held that in view of the time limit prescribed under Article 199 (4-A) of the Constitution an interim order issued by this Court in the kind of matters detailed in the Article would automatically stand expired. According to the learned counsel for the appellants since 18-3-1999 when the above decision was made by the Court, there remained no ambiguity whatsoever as to the life of the stay order issued by this Court. In his view the Revenue being competent to issue a notice at least since the above date of the order of the Court which was otherwise declaratory. The time started running against it and therefore it could not plead that due to stay it could not proceed against the appellants.
10. We are, however, of the view that the argument is not tenable. The issue as to the life of the stay order issued by this Court in Revenue matters etc. Certainly stands settled by the aforesaid judgment of the Hon'ble Supreme Court of Pakistan. However, we are not willing to grant that the appellant can take advantage of an order issued in their favour and at their request by describing the same to have become illegal after a certain length of time. The appellants having already eaten their cake would still want to have it. Their argument in a way is also contradictory. At one place in the grounds of appeal they claim that levy of excise duty as such was never stayed through the injunction order issued by this Court and in the same breath they would like to take benefit of the limited life of the stay under Article 199 (4-A). If this Court had not suspended the recovery of Revenue directly or indirectly, then obviously the life of the stay order was not restricted to six months and it remained in force during whole of the period till the petitions filed by the appellants were refused.
11. In case of limitation prescribed under a general or special statute such as rule 10 (1) of the Central Excise Rules, 1944 it operates both for the assessee as well as for the Department. However, in the present case, as noted earlier, the appellants challenged a levy which was finally found justified by the Supreme Court of Pakistan. Their plea that interim relief allowed to them by this Court ultimately operated to frustrate the levy for the period in question cannot be granted. Firstly an act of the Court cannot operate to the prejudice of any of the parties including the department.
Secondly, such an interpretation would amount to negating not only the final order passed by this Court but the Hon'ble Supreme Court as well. What the petitioners in fact seek to allege is that interim relief allowed by this Court has operated to nullify the final order of this Court as well as that of the apex Court. Such an interpretation is totally misplaced. To us it rather appears that the learned Tribunal has already been quite generous to delete the impositions of additional tax as well as penalties.
12. No case for interference having been made out, the appellants must fail.
13. Dismissed in limine.
14. This order will also depose of Civil Appeals Nos.298, 299, 300, 301 and 302 of 2001.