Development of Industries -New Industrial Policy scheme in North- Eastern Region - some companies availed benefits of the scheme - commencement of Finance Act 2003 - certain benefit notifications were amended retrospectively from the date of original Notifications under the scheme under sec.153 of the Act - the Assistant Commissioner, Central Excise, Jorhat passed orders reviewing the entire refunded amounts under the original notifications - Challenged - High court dismissed the writs - D.B. confirmed the same - Appeals - Apex court held that allowed the appeals directing the parties to deposit the demanded amounts before the commissioner and directed to file regular appeals over the orders of Asst. Commissioner - and directed the department to treat the time consumed in these proceedings be considered as reasonable =
The facts, in a nutshell, are that with a view to provide necessary impetus
to the development of industries in the north-eastern region a new
Industrial Policy Resolution was notified by the Government of India on
24.12.1997.
In pursuance of the said policy, a Notification was issued on
8.7.1999 and thereafter further Notifications were issued on 29.06.2001 and
23.12.2002.
Pursuant to the said Notifications, certain benefits were
availed of by the assessees.
At that juncture, The Finance Act, 2003 (for
brevity “the Act”) was brought into force and by virtue of Section 153 of
the Act certain Notifications were amended with retrospective effect from
08.07.1999, i.e. the date of original Notification which we have mentioned
hereinabove.=
After the amendment came into force, the Assistant Commissioner, Central
Excise, Jorhat referred to the amendment and the notifications and
eventually passed the following order on 3.6.2003:-
“In consideration of the above the entire refund amount sanctioned with
effect from 8.7.99 is required to be reviewed in terms of the provision of
the Eighth Schedule of the Finance Act, 2003 which on being re-assessed, it
appears that an amount of Rs.2.20,18.124.00 is required to be recovered
from the said unit being the refund granted earlier which have become not
eligible by virtue of the Clause 145 of the Finance Bill, 2003. Details of
duty paid month wise, refund sanctioned and amount required to be realized
are furnished in Annexure-1 to the Order enclosed.
Now in terms of the provision of Finance Act, 2003 M/s. Hindustan Coca Cola
Beverages Pvt. Ltd., P.O. R.R.L., Jorhat is hereby required to make payment
of the said amount of Rs.2,20,18,124.00 within a period of 30 (thirty) days
with effect from 13th May, 2003. Failure to comply with this Order with
the specified date an interest @ 15% p.a. shall be payable from the date
immediately after the expiry of the said period of thirty days till the
payment is made.” =
The validity of Notification No. 65/03
dated 06.08.2003 and certain other notifications including the original
notification No. 33/99 dated 3.7.99 were called in question.
Before the
High Court, the constitutional validity of the amendment of the Finance Act
was also called in question.
In the course of hearing, the challenge to the validity was abandoned.
It was contended in the writ petition that
without affording an opportunity of hearing to the appellant and without
issuance of the notice, the Assistant Commissioner had passed an order of
recovery which was absolutely impermissible.
The High Court did not address to the retrospective application of the
provision as the assail to the same was abandoned.
It also did not address
to the impact of non-issuance of notice prior to passing an order of
recovery.
It adverted to the merits of the case, that is,
whether the recovery could have been directed by the Assistant Commissioner or not and
repelling the proponements advanced by the assessee accepted the stand of
the revenue. =
The appeals shall be disposed
of within a period of three months from the date of its presentation after
giving opportunity of hearing to the parties. Needless to clarify, we have
not expressed any opinion whatsoever on the merits of the case. There will
be no order as to costs.
2014 - Sept. Month - http://judis.nic.in/supremecourt/filename=41913
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3380 OF 2010
Hindustan Coca Cola Beverage (P) Ltd. ... Appellant
Versus
Union of India and others ... Respondents
WITH
CIVIL APPEAL NO. 3381 OF 2010,
CIVIL APPEAL NO. 3383 OF 2010,
CIVIL APPEAL NO. 3384 OF 2010,
CIVIL APPEAL NO. 3385 OF 2010,
CIVIL APPEAL No. 3386 OF 2010,
CIVIL APPEAL NO. 3387 OF 2010,
CIVIL APPEAL NO. 3388 OF 2010 and
CIVIL APPEAL NO. 3389-3392 OF 2010
J U D G M E N T
Dipak Misra, J.
The present appeals, by special leave, have been preferred against the
judgment and order dated 24th June, 2009 passed by the Division Bench of
the High Court of Gauhati in Writ Appeal No. 435 of 2006 and other
connected appeals whereby it has affirmed the common judgment and order
dated 21.09.2006 passed by the learned Single Judge in a batch of writ
petitions. For the sake of clarity and convenience we shall advert to the
facts in Civil Appeal No. 3380 of 2010 and at the relevant time we shall
refer to quantum involved in other appeals.
The facts, in a nutshell, are that with a view to provide necessary impetus
to the development of industries in the north-eastern region a new
Industrial Policy Resolution was notified by the Government of India on
24.12.1997. In pursuance of the said policy, a Notification was issued on
8.7.1999 and thereafter further Notifications were issued on 29.06.2001 and
23.12.2002. Pursuant to the said Notifications, certain benefits were
availed of by the assessees. At that juncture, The Finance Act, 2003 (for
brevity “the Act”) was brought into force and by virtue of Section 153 of
the Act certain Notifications were amended with retrospective effect from
08.07.1999, i.e. the date of original Notification which we have mentioned
hereinabove.
After the amendment came into force, the Assistant Commissioner, Central
Excise, Jorhat referred to the amendment and the notifications and
eventually passed the following order on 3.6.2003:-
“In consideration of the above the entire refund amount sanctioned with
effect from 8.7.99 is required to be reviewed in terms of the provision of
the Eighth Schedule of the Finance Act, 2003 which on being re-assessed, it
appears that an amount of Rs.2.20,18.124.00 is required to be recovered
from the said unit being the refund granted earlier which have become not
eligible by virtue of the Clause 145 of the Finance Bill, 2003. Details of
duty paid month wise, refund sanctioned and amount required to be realized
are furnished in Annexure-1 to the Order enclosed.
Now in terms of the provision of Finance Act, 2003 M/s. Hindustan Coca Cola
Beverages Pvt. Ltd., P.O. R.R.L., Jorhat is hereby required to make payment
of the said amount of Rs.2,20,18,124.00 within a period of 30 (thirty) days
with effect from 13th May, 2003. Failure to comply with this Order with
the specified date an interest @ 15% p.a. shall be payable from the date
immediately after the expiry of the said period of thirty days till the
payment is made.”
Being aggrieved by the aforesaid order, the appellant preferred a writ
petition before the High Court. The validity of Notification No. 65/03
dated 06.08.2003 and certain other notifications including the original
notification No. 33/99 dated 3.7.99 were called in question. Before the
High Court, the constitutional validity of the amendment of the Finance Act
was also called in question. In the course of hearing, the challenge to
the validity was abandoned. It was contended in the writ petition that
without affording an opportunity of hearing to the appellant and without
issuance of the notice, the Assistant Commissioner had passed an order of
recovery which was absolutely impermissible.
The High Court did not address to the retrospective application of the
provision as the assail to the same was abandoned. It also did not address
to the impact of non-issuance of notice prior to passing an order of
recovery. It adverted to the merits of the case, that is, whether the
recovery could have been directed by the Assistant Commissioner or not and
repelling the proponements advanced by the assessee accepted the stand of
the revenue.
Mr. S.K. Bagaria, learned senior counsel appearing for the appellant very
fairly stated that the assessee had correctly abandoned the challenge
pertaining to the constitutional validity of the provision. Learned senior
counsel submitted that an order of recovery could not have been
straightaway passed without issuing notice to the appellant as that
violates the principles of natural justice. The learned senior counsel
further contended that the High Court has dwelled upon the merits of the
case on an erroneous footing inasmuch as the assessee-appellant had totally
utilized the CENVAT Credit and not taken the refund of the same. It is
further urged that in view of the amendment made by the Finance Act, it was
not payable and consequently not recoverable.
Mr. Mukul Rohtagi, learned Attorney General appearing for the Union of
India submitted that as the time schedule is fixed under Section 153 (4)
for recovery is thirty days, by implication, the principle of issue of any
show cause notice is not attracted. To support the said submission, he has
drawn strength from the decision in R.C. Tobacco (P) Ltd. v. Union of
India[1], especially paragraph 41 of the said pronouncement. Additionally,
it is submitted by him that post facto hearing may be thought of after the
amount is deposited and the sphere of hearing may be limited with regard to
payability or the refund of the sum.
To appreciate the controversy from a proper perspective it is seemly to
reproduce Section 153 of the Act which reads as under:
“Section 153. Amendment of notifications issued under Section 5A of the
Central Excise Act for certain period.
The notification of the Government of India in the erstwhile Ministry of
Finance (Department of Revenue), Nos. G.S.R. 508 (E), dated the 8th July,
1999 and G.S.R. 509 (E), dated the 8th July, 1999, issued under sub-section
(1) of Section 5A of the Central Excise Act read with sub-section (3) of
Section 3 of the Additional Duties of Excise (Goods) of Special Importance)
Act, 1957 (58 of 1957) and sub-section (3) of Section 3 of the Additional
Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978) by
the Central Government shall stand amended and shall be deemed to have been
amended in the manner as specified in the Eighth Schedule, on and from the
8th day of July, 1999 to the 22nd day of December, 2002 (both days
inclusive) retrospectively, and accordingly notwithstanding anything
contained in any judgment, decree or order of any court, tribunal or other
authority, any action taken or anything done or purported to have been
taken or done under the said notifications, shall be deemed to be and
always to have been, for all purposes, as validly and effectively taken or
done as if the notifications as amended by this sub-section had been in
force at all material times.
For the purposes of sub-section(1), the Central Government shall have and
shall be deemed to have the power to amend the notifications referred to in
the said sub-section with retrospective effect as if the Central Government
had the power to amend the said notifications under sub-section (1) of
Section 5A of the Central Excise Act read with sub-section (3) of Section 3
of the Additional Duties of Excise (Goods of Special Importance) Act, 1957
(58 of 1957) and sub-section (3) of Section 3 of the Additional Duties of
Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978),
retrospectively at all material times.
Notwithstanding the cessation of the amendment under sub-section (1) of the
22nd day of December, 2002, no suit or other proceedings shall be
maintained or continued in any court, tribunal or other authority for any
action taken or anything done or omitted to be done, in respect of any
goods under the said notifications, and no enforcement shall be made by any
court, tribunal or other authority of any decree or order relating to such
action taken or anything done or omitted to be done as if the amendment
made by sub-section (1) had been in force at all material times.
Notwithstanding the cessation of the amendment under sub-section (1) on the
22nd day of December, 2002, recovery shall be made of all amounts of duty
or interest or other charges which have not been collected or, as the case
may be, which have been refunded but which would have been collected, or,
as the case may be, which would not have been refunded if the provisions of
this section had been in force at all material times, within a period of
thirty days from the day on which the Finance Bill, 2003 receives the
assent of the President, and in the event of non-payment of duty or
interest or other charges so recoverable, interest at the rate of fifteen
per cent, per annum shall be payable, from the date immediately after the
expiry of the said period of thirty days, till the date of payment.
Explanation- For the removal of doubts, it is hereby declared that no act
or omission on the part of any person shall be punishable as an offence
which would not have been so punishable if the notifications referred to in
sub-section (1) had not been amended retrospectively by that sub-section.”
As the provision contained under Section 153(1) would reveal the
effect of the amendment has to be understood in the backdrop of the EIGHTH
SCHEDULE. THE EIGHTH SCHEDULE reads as follows:
“[See Section 153(1)]
|Sl.No. |Notification No. and |Amendment |Date of effect |
| |date | |of amendment |
|(1) |(2) |(3) |(4) |
|1. |G.S.R. 508(E) dated the|In the said |8th July, 1999 |
| |8th July, 1999 -– |notification, in | |
| |Central Excise, dated |paragraph 2, in | |
| |the 8th July, 1999) |clause (b), the | |
| | |following proviso | |
| | |shall be inserted, | |
| | |namely:- | |
| | | | |
| | |Provided that such | |
| | |refund shall not | |
| | |exceed the amount of| |
| | |duty paid less the | |
| | |amount of the CENVAT| |
| | |credit availed of, | |
| | |in respect of the | |
| | |duty paid in the | |
| | |inputs used in or in| |
| | |relation to the | |
| | |manufacture of goods| |
| | |cleared under this | |
| | |notification.” | |
|2. |G.S.R. 509 (E), dated |In the said |8th July, 1999 |
| |the 8th July, 1999 |notification, in | |
| |{33/1999-Central |paragraph 2, in | |
| |Excise, dated the 8th |clause (b), the | |
| |July, 1999} |following proviso | |
| | |shall be inserted, | |
| | |namely:- | |
| | | | |
| | |“Provided that such | |
| | |refund shall not | |
| | |exceed the amount of| |
| | |duty paid less the | |
| | |amount of the CENVAT| |
| | |credit availed of, | |
| | |in respect of the | |
| | |duty paid on the | |
| | |inputes used in or | |
| | |in relation to the | |
| | |manufacture of goods| |
| | |cleared under this | |
| | |notification.” | |
9. The first submission, as we find centres round the issue whether
whether the appellant-assessee was entitled to be given notice to show
cause before proceeding for recovery in view of the language employed under
Section 153(4) of the Act. In R.C. Tobacco (P) Ltd. (supra) the court
interpreting Section 153(4) has observed as follows:-
“In the present case Section 153(4) specifically and expressly allows
amounts to be recovered within a period of thirty days from the day Finance
Bill, 2003 received the assent of the President. It cannot but be held
therefore that the period of six months provided under Section 11-A would
not apply.”
In the said case while dealing with the question of notice prior the
recovery the court ruled:-
“On the question of notice prior to the recovery irrespective of Section 11-
A, it is contended by the petitioners relying on the decision of this Court
in East India Commercial Co. Ltd. v. Collector of Customs4 SCR at p. 361
that whether a statute provides for notice or not, it was incumbent upon
the respondents to issue notice to the petitioners disclosing the
circumstance under which proceedings are sought to be initiated against
them and that any proceedings taken without such notice would be against
the principles of natural justice. Assuming that the principles were
applicable to the case before us, in fact notices of personal hearing were
served on the petitioners by the Assistant Collector for a personal hearing
before the Assistant Collector passed the orders by which the petitioners
were held liable to repay the refunds made and to pay the excise on the
goods cleared for the [pic]subsequent periods.”
Relying on the same it is submitted by Mr. Rohatagi that as the
computation and the recovery are to be made within a time frame of thirty
days, issue of a show cause notice cannot be read into such a provision.
In essence, the submission is that the principles of natural justice have
been kept at bay by implication. Per contra, Mr. Bagaria has submitted
that in the above-referred decision notices have already been given and,
therefore, issuance of notice is a must. Ordinarily we would have adverted
to said submission advanced at the bar but we find, the assessee had not
demonstrably argued this ground and addressed the lis on merits before the
High Court and, therefore, we are not inclined to interpret whether the
concept of natural justice would be read into the said provision or not.
The said question is left open.
10. The next submission pertains to the issue whether the High Court was
justified addressing the lis on merits when series of factual aspects are
involved. We are disposed to think that the High Court should not have
entered into the factual score to decline the relief to the appellants. We
are obliged to say so as Mr. Bagaria, learned senior counsel has contended
that it can only be adjudicated upon with reference to the documents on
record. The documents mean the transactions, quantum of CENVAT availed of,
the amount that was taken as refund by paying from the P.L.A. and further
not availing refund of CENVAT credit at any point of time. Needless to
emphasise, the said aspect are in the realm of facts which could not have
been adjudged or adjudicated by the High Court under Article 226 of the
Constitution as the order of recovery was challenged on the ground that no
notice was issued to the appellant and that it was not liable to pay in the
obtaining factual matrix.
11. Be it stated, there is no cavil over the fact that an appeal lies
under Section 35 of the Central Excise Act, 1944 to the Commissioner
(Appeals) who can address both the issues relating to facts and law keeping
in view the applicability of the relevant notifications. It is borne out
from the record that the assessee-appellant had furnished a bank guarantee
amounting to Rs.2,20,18,124/- for obtaining an order of stay. In our
considered opinion it would not be appropriate to give an opportunity to
the appellant to prefer statutory appeals and allow it to enjoy the benefit
of stay of recovery on the basis of a bank guarantee. Therefore, we would
direct the assessee to deposit Rs.2.5 crores before the adjudicating
authority within six weeks and after the said deposit is made and the
receipt obtained, the appeal would be entertained within the said period.
On an appeal being filed, the Commissioner (Appeals) shall deal with the
matter on merits. Learned Attorney General very fairly stated that the
Revenue would not raise the issue of limitation as the period spent before
the High Court and this Court and the time granted for depositing of the
amount would stand excluded for the purpose of preferring the appeal.
12. At this juncture, it is apposite to mention here that the bank
guarantees furnished by the other appellants in respect of their respective
appeals. They are as under:
CIVIL APPEAL NO. NAME OF ASSESSEE AMOUNT(Rs.)
C.A. No. 3381/10 Assam Roofing 16,62,336/-
C.A. No. 3383/10 Ozone Pharmaceuticals 1,01,20,672/-
C.A. No. 3384/10 Ozone Ayurvedics 1,01,20,672/-
C.A. No. 3385/10 Herbo Foundation 39,81,566/-
C.A. No. 3386/10 Belle Herbals 4,44,740/- C.A. No.
3387/10 Eminent Healthcare 22,01,868/-
C.A. No. 3388/10 Tread & Patels 42,44,456/-
C.A.Nos.3389/92/10 Godres Sara Lee 36,51,495/-
19,12,132/-
Considering the amount in question in various appeals it is directed
that in case the bank guarantees furnished by the assessees have been
encashed no deposit shall be made. If the bank guarantees have not yet
been encashed the amount as mentioned hereinabove plus rupees five lakhs
shall be deposited within the stipulated time frame of six weeks. As we
have directed for deposition of the amount, it is directed that after
deposit of the said amount, the bank guarantees furnished in favour of the
jurisdictional Commissioner shall be returned to the assessee-appellants.
13. In the result, the appeals stand allowed in part. The judgment and
orders of the High Court in writ petitions and writ appeals are set aside
and the assessee/appellants are directed to prefer appeals with the
conditions precedent as imposed hereinabove. The appeals shall be disposed
of within a period of three months from the date of its presentation after
giving opportunity of hearing to the parties. Needless to clarify, we have
not expressed any opinion whatsoever on the merits of the case. There will
be no order as to costs.
.............................J.
[Dipak Misra]
.............................J.
[Abhay Manohar
Sapre]
New Delhi;
September 04, 2014
-----------------------
[1] (2005) 7 SCC 725
-----------------------
14
The facts, in a nutshell, are that with a view to provide necessary impetus
to the development of industries in the north-eastern region a new
Industrial Policy Resolution was notified by the Government of India on
24.12.1997.
In pursuance of the said policy, a Notification was issued on
8.7.1999 and thereafter further Notifications were issued on 29.06.2001 and
23.12.2002.
Pursuant to the said Notifications, certain benefits were
availed of by the assessees.
At that juncture, The Finance Act, 2003 (for
brevity “the Act”) was brought into force and by virtue of Section 153 of
the Act certain Notifications were amended with retrospective effect from
08.07.1999, i.e. the date of original Notification which we have mentioned
hereinabove.=
After the amendment came into force, the Assistant Commissioner, Central
Excise, Jorhat referred to the amendment and the notifications and
eventually passed the following order on 3.6.2003:-
“In consideration of the above the entire refund amount sanctioned with
effect from 8.7.99 is required to be reviewed in terms of the provision of
the Eighth Schedule of the Finance Act, 2003 which on being re-assessed, it
appears that an amount of Rs.2.20,18.124.00 is required to be recovered
from the said unit being the refund granted earlier which have become not
eligible by virtue of the Clause 145 of the Finance Bill, 2003. Details of
duty paid month wise, refund sanctioned and amount required to be realized
are furnished in Annexure-1 to the Order enclosed.
Now in terms of the provision of Finance Act, 2003 M/s. Hindustan Coca Cola
Beverages Pvt. Ltd., P.O. R.R.L., Jorhat is hereby required to make payment
of the said amount of Rs.2,20,18,124.00 within a period of 30 (thirty) days
with effect from 13th May, 2003. Failure to comply with this Order with
the specified date an interest @ 15% p.a. shall be payable from the date
immediately after the expiry of the said period of thirty days till the
payment is made.” =
The validity of Notification No. 65/03
dated 06.08.2003 and certain other notifications including the original
notification No. 33/99 dated 3.7.99 were called in question.
Before the
High Court, the constitutional validity of the amendment of the Finance Act
was also called in question.
In the course of hearing, the challenge to the validity was abandoned.
It was contended in the writ petition that
without affording an opportunity of hearing to the appellant and without
issuance of the notice, the Assistant Commissioner had passed an order of
recovery which was absolutely impermissible.
The High Court did not address to the retrospective application of the
provision as the assail to the same was abandoned.
It also did not address
to the impact of non-issuance of notice prior to passing an order of
recovery.
It adverted to the merits of the case, that is,
whether the recovery could have been directed by the Assistant Commissioner or not and
repelling the proponements advanced by the assessee accepted the stand of
the revenue. =
The appeals shall be disposed
of within a period of three months from the date of its presentation after
giving opportunity of hearing to the parties. Needless to clarify, we have
not expressed any opinion whatsoever on the merits of the case. There will
be no order as to costs.
2014 - Sept. Month - http://judis.nic.in/supremecourt/filename=41913
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3380 OF 2010
Hindustan Coca Cola Beverage (P) Ltd. ... Appellant
Versus
Union of India and others ... Respondents
WITH
CIVIL APPEAL NO. 3381 OF 2010,
CIVIL APPEAL NO. 3383 OF 2010,
CIVIL APPEAL NO. 3384 OF 2010,
CIVIL APPEAL NO. 3385 OF 2010,
CIVIL APPEAL No. 3386 OF 2010,
CIVIL APPEAL NO. 3387 OF 2010,
CIVIL APPEAL NO. 3388 OF 2010 and
CIVIL APPEAL NO. 3389-3392 OF 2010
J U D G M E N T
Dipak Misra, J.
The present appeals, by special leave, have been preferred against the
judgment and order dated 24th June, 2009 passed by the Division Bench of
the High Court of Gauhati in Writ Appeal No. 435 of 2006 and other
connected appeals whereby it has affirmed the common judgment and order
dated 21.09.2006 passed by the learned Single Judge in a batch of writ
petitions. For the sake of clarity and convenience we shall advert to the
facts in Civil Appeal No. 3380 of 2010 and at the relevant time we shall
refer to quantum involved in other appeals.
The facts, in a nutshell, are that with a view to provide necessary impetus
to the development of industries in the north-eastern region a new
Industrial Policy Resolution was notified by the Government of India on
24.12.1997. In pursuance of the said policy, a Notification was issued on
8.7.1999 and thereafter further Notifications were issued on 29.06.2001 and
23.12.2002. Pursuant to the said Notifications, certain benefits were
availed of by the assessees. At that juncture, The Finance Act, 2003 (for
brevity “the Act”) was brought into force and by virtue of Section 153 of
the Act certain Notifications were amended with retrospective effect from
08.07.1999, i.e. the date of original Notification which we have mentioned
hereinabove.
After the amendment came into force, the Assistant Commissioner, Central
Excise, Jorhat referred to the amendment and the notifications and
eventually passed the following order on 3.6.2003:-
“In consideration of the above the entire refund amount sanctioned with
effect from 8.7.99 is required to be reviewed in terms of the provision of
the Eighth Schedule of the Finance Act, 2003 which on being re-assessed, it
appears that an amount of Rs.2.20,18.124.00 is required to be recovered
from the said unit being the refund granted earlier which have become not
eligible by virtue of the Clause 145 of the Finance Bill, 2003. Details of
duty paid month wise, refund sanctioned and amount required to be realized
are furnished in Annexure-1 to the Order enclosed.
Now in terms of the provision of Finance Act, 2003 M/s. Hindustan Coca Cola
Beverages Pvt. Ltd., P.O. R.R.L., Jorhat is hereby required to make payment
of the said amount of Rs.2,20,18,124.00 within a period of 30 (thirty) days
with effect from 13th May, 2003. Failure to comply with this Order with
the specified date an interest @ 15% p.a. shall be payable from the date
immediately after the expiry of the said period of thirty days till the
payment is made.”
Being aggrieved by the aforesaid order, the appellant preferred a writ
petition before the High Court. The validity of Notification No. 65/03
dated 06.08.2003 and certain other notifications including the original
notification No. 33/99 dated 3.7.99 were called in question. Before the
High Court, the constitutional validity of the amendment of the Finance Act
was also called in question. In the course of hearing, the challenge to
the validity was abandoned. It was contended in the writ petition that
without affording an opportunity of hearing to the appellant and without
issuance of the notice, the Assistant Commissioner had passed an order of
recovery which was absolutely impermissible.
The High Court did not address to the retrospective application of the
provision as the assail to the same was abandoned. It also did not address
to the impact of non-issuance of notice prior to passing an order of
recovery. It adverted to the merits of the case, that is, whether the
recovery could have been directed by the Assistant Commissioner or not and
repelling the proponements advanced by the assessee accepted the stand of
the revenue.
Mr. S.K. Bagaria, learned senior counsel appearing for the appellant very
fairly stated that the assessee had correctly abandoned the challenge
pertaining to the constitutional validity of the provision. Learned senior
counsel submitted that an order of recovery could not have been
straightaway passed without issuing notice to the appellant as that
violates the principles of natural justice. The learned senior counsel
further contended that the High Court has dwelled upon the merits of the
case on an erroneous footing inasmuch as the assessee-appellant had totally
utilized the CENVAT Credit and not taken the refund of the same. It is
further urged that in view of the amendment made by the Finance Act, it was
not payable and consequently not recoverable.
Mr. Mukul Rohtagi, learned Attorney General appearing for the Union of
India submitted that as the time schedule is fixed under Section 153 (4)
for recovery is thirty days, by implication, the principle of issue of any
show cause notice is not attracted. To support the said submission, he has
drawn strength from the decision in R.C. Tobacco (P) Ltd. v. Union of
India[1], especially paragraph 41 of the said pronouncement. Additionally,
it is submitted by him that post facto hearing may be thought of after the
amount is deposited and the sphere of hearing may be limited with regard to
payability or the refund of the sum.
To appreciate the controversy from a proper perspective it is seemly to
reproduce Section 153 of the Act which reads as under:
“Section 153. Amendment of notifications issued under Section 5A of the
Central Excise Act for certain period.
The notification of the Government of India in the erstwhile Ministry of
Finance (Department of Revenue), Nos. G.S.R. 508 (E), dated the 8th July,
1999 and G.S.R. 509 (E), dated the 8th July, 1999, issued under sub-section
(1) of Section 5A of the Central Excise Act read with sub-section (3) of
Section 3 of the Additional Duties of Excise (Goods) of Special Importance)
Act, 1957 (58 of 1957) and sub-section (3) of Section 3 of the Additional
Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978) by
the Central Government shall stand amended and shall be deemed to have been
amended in the manner as specified in the Eighth Schedule, on and from the
8th day of July, 1999 to the 22nd day of December, 2002 (both days
inclusive) retrospectively, and accordingly notwithstanding anything
contained in any judgment, decree or order of any court, tribunal or other
authority, any action taken or anything done or purported to have been
taken or done under the said notifications, shall be deemed to be and
always to have been, for all purposes, as validly and effectively taken or
done as if the notifications as amended by this sub-section had been in
force at all material times.
For the purposes of sub-section(1), the Central Government shall have and
shall be deemed to have the power to amend the notifications referred to in
the said sub-section with retrospective effect as if the Central Government
had the power to amend the said notifications under sub-section (1) of
Section 5A of the Central Excise Act read with sub-section (3) of Section 3
of the Additional Duties of Excise (Goods of Special Importance) Act, 1957
(58 of 1957) and sub-section (3) of Section 3 of the Additional Duties of
Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978),
retrospectively at all material times.
Notwithstanding the cessation of the amendment under sub-section (1) of the
22nd day of December, 2002, no suit or other proceedings shall be
maintained or continued in any court, tribunal or other authority for any
action taken or anything done or omitted to be done, in respect of any
goods under the said notifications, and no enforcement shall be made by any
court, tribunal or other authority of any decree or order relating to such
action taken or anything done or omitted to be done as if the amendment
made by sub-section (1) had been in force at all material times.
Notwithstanding the cessation of the amendment under sub-section (1) on the
22nd day of December, 2002, recovery shall be made of all amounts of duty
or interest or other charges which have not been collected or, as the case
may be, which have been refunded but which would have been collected, or,
as the case may be, which would not have been refunded if the provisions of
this section had been in force at all material times, within a period of
thirty days from the day on which the Finance Bill, 2003 receives the
assent of the President, and in the event of non-payment of duty or
interest or other charges so recoverable, interest at the rate of fifteen
per cent, per annum shall be payable, from the date immediately after the
expiry of the said period of thirty days, till the date of payment.
Explanation- For the removal of doubts, it is hereby declared that no act
or omission on the part of any person shall be punishable as an offence
which would not have been so punishable if the notifications referred to in
sub-section (1) had not been amended retrospectively by that sub-section.”
As the provision contained under Section 153(1) would reveal the
effect of the amendment has to be understood in the backdrop of the EIGHTH
SCHEDULE. THE EIGHTH SCHEDULE reads as follows:
“[See Section 153(1)]
|Sl.No. |Notification No. and |Amendment |Date of effect |
| |date | |of amendment |
|(1) |(2) |(3) |(4) |
|1. |G.S.R. 508(E) dated the|In the said |8th July, 1999 |
| |8th July, 1999 -– |notification, in | |
| |Central Excise, dated |paragraph 2, in | |
| |the 8th July, 1999) |clause (b), the | |
| | |following proviso | |
| | |shall be inserted, | |
| | |namely:- | |
| | | | |
| | |Provided that such | |
| | |refund shall not | |
| | |exceed the amount of| |
| | |duty paid less the | |
| | |amount of the CENVAT| |
| | |credit availed of, | |
| | |in respect of the | |
| | |duty paid in the | |
| | |inputs used in or in| |
| | |relation to the | |
| | |manufacture of goods| |
| | |cleared under this | |
| | |notification.” | |
|2. |G.S.R. 509 (E), dated |In the said |8th July, 1999 |
| |the 8th July, 1999 |notification, in | |
| |{33/1999-Central |paragraph 2, in | |
| |Excise, dated the 8th |clause (b), the | |
| |July, 1999} |following proviso | |
| | |shall be inserted, | |
| | |namely:- | |
| | | | |
| | |“Provided that such | |
| | |refund shall not | |
| | |exceed the amount of| |
| | |duty paid less the | |
| | |amount of the CENVAT| |
| | |credit availed of, | |
| | |in respect of the | |
| | |duty paid on the | |
| | |inputes used in or | |
| | |in relation to the | |
| | |manufacture of goods| |
| | |cleared under this | |
| | |notification.” | |
9. The first submission, as we find centres round the issue whether
whether the appellant-assessee was entitled to be given notice to show
cause before proceeding for recovery in view of the language employed under
Section 153(4) of the Act. In R.C. Tobacco (P) Ltd. (supra) the court
interpreting Section 153(4) has observed as follows:-
“In the present case Section 153(4) specifically and expressly allows
amounts to be recovered within a period of thirty days from the day Finance
Bill, 2003 received the assent of the President. It cannot but be held
therefore that the period of six months provided under Section 11-A would
not apply.”
In the said case while dealing with the question of notice prior the
recovery the court ruled:-
“On the question of notice prior to the recovery irrespective of Section 11-
A, it is contended by the petitioners relying on the decision of this Court
in East India Commercial Co. Ltd. v. Collector of Customs4 SCR at p. 361
that whether a statute provides for notice or not, it was incumbent upon
the respondents to issue notice to the petitioners disclosing the
circumstance under which proceedings are sought to be initiated against
them and that any proceedings taken without such notice would be against
the principles of natural justice. Assuming that the principles were
applicable to the case before us, in fact notices of personal hearing were
served on the petitioners by the Assistant Collector for a personal hearing
before the Assistant Collector passed the orders by which the petitioners
were held liable to repay the refunds made and to pay the excise on the
goods cleared for the [pic]subsequent periods.”
Relying on the same it is submitted by Mr. Rohatagi that as the
computation and the recovery are to be made within a time frame of thirty
days, issue of a show cause notice cannot be read into such a provision.
In essence, the submission is that the principles of natural justice have
been kept at bay by implication. Per contra, Mr. Bagaria has submitted
that in the above-referred decision notices have already been given and,
therefore, issuance of notice is a must. Ordinarily we would have adverted
to said submission advanced at the bar but we find, the assessee had not
demonstrably argued this ground and addressed the lis on merits before the
High Court and, therefore, we are not inclined to interpret whether the
concept of natural justice would be read into the said provision or not.
The said question is left open.
10. The next submission pertains to the issue whether the High Court was
justified addressing the lis on merits when series of factual aspects are
involved. We are disposed to think that the High Court should not have
entered into the factual score to decline the relief to the appellants. We
are obliged to say so as Mr. Bagaria, learned senior counsel has contended
that it can only be adjudicated upon with reference to the documents on
record. The documents mean the transactions, quantum of CENVAT availed of,
the amount that was taken as refund by paying from the P.L.A. and further
not availing refund of CENVAT credit at any point of time. Needless to
emphasise, the said aspect are in the realm of facts which could not have
been adjudged or adjudicated by the High Court under Article 226 of the
Constitution as the order of recovery was challenged on the ground that no
notice was issued to the appellant and that it was not liable to pay in the
obtaining factual matrix.
11. Be it stated, there is no cavil over the fact that an appeal lies
under Section 35 of the Central Excise Act, 1944 to the Commissioner
(Appeals) who can address both the issues relating to facts and law keeping
in view the applicability of the relevant notifications. It is borne out
from the record that the assessee-appellant had furnished a bank guarantee
amounting to Rs.2,20,18,124/- for obtaining an order of stay. In our
considered opinion it would not be appropriate to give an opportunity to
the appellant to prefer statutory appeals and allow it to enjoy the benefit
of stay of recovery on the basis of a bank guarantee. Therefore, we would
direct the assessee to deposit Rs.2.5 crores before the adjudicating
authority within six weeks and after the said deposit is made and the
receipt obtained, the appeal would be entertained within the said period.
On an appeal being filed, the Commissioner (Appeals) shall deal with the
matter on merits. Learned Attorney General very fairly stated that the
Revenue would not raise the issue of limitation as the period spent before
the High Court and this Court and the time granted for depositing of the
amount would stand excluded for the purpose of preferring the appeal.
12. At this juncture, it is apposite to mention here that the bank
guarantees furnished by the other appellants in respect of their respective
appeals. They are as under:
CIVIL APPEAL NO. NAME OF ASSESSEE AMOUNT(Rs.)
C.A. No. 3381/10 Assam Roofing 16,62,336/-
C.A. No. 3383/10 Ozone Pharmaceuticals 1,01,20,672/-
C.A. No. 3384/10 Ozone Ayurvedics 1,01,20,672/-
C.A. No. 3385/10 Herbo Foundation 39,81,566/-
C.A. No. 3386/10 Belle Herbals 4,44,740/- C.A. No.
3387/10 Eminent Healthcare 22,01,868/-
C.A. No. 3388/10 Tread & Patels 42,44,456/-
C.A.Nos.3389/92/10 Godres Sara Lee 36,51,495/-
19,12,132/-
Considering the amount in question in various appeals it is directed
that in case the bank guarantees furnished by the assessees have been
encashed no deposit shall be made. If the bank guarantees have not yet
been encashed the amount as mentioned hereinabove plus rupees five lakhs
shall be deposited within the stipulated time frame of six weeks. As we
have directed for deposition of the amount, it is directed that after
deposit of the said amount, the bank guarantees furnished in favour of the
jurisdictional Commissioner shall be returned to the assessee-appellants.
13. In the result, the appeals stand allowed in part. The judgment and
orders of the High Court in writ petitions and writ appeals are set aside
and the assessee/appellants are directed to prefer appeals with the
conditions precedent as imposed hereinabove. The appeals shall be disposed
of within a period of three months from the date of its presentation after
giving opportunity of hearing to the parties. Needless to clarify, we have
not expressed any opinion whatsoever on the merits of the case. There will
be no order as to costs.
.............................J.
[Dipak Misra]
.............................J.
[Abhay Manohar
Sapre]
New Delhi;
September 04, 2014
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[1] (2005) 7 SCC 725
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