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Saturday, September 20, 2014

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 = CIVIL APPEAL NO. 3380 OF 2010 Hindustan Coca Cola Beverage (P) Ltd. ... Appellant Versus Union of India and others ... Respondents = 2014 - Sept. Month - http://judis.nic.in/supremecourt/filename=41913

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


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[1]    (2005) 7 SCC 725

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