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213 Pages·2013·2.75 MB·English

Vol. 2 No. 2 FOREWORD
07.2013
Editor in Chief:
Sujit K.Sinha, Chief
Commissioner
Editor: I am happy to place before you the
S.K.Panda, Commissioner,
second issue of the second volume of the
Delhi
ECS Law Reporter for the quarter ending
Regional Editors:
R.K. Singla, Commissioner, April-June, 2013. This is the fourth issue in
Bangalore succession. It is a pleasure to note that the
Alok Shukla, Commissioner,
ECS Law Reporter has attained recognition
Chennai
K.L. Goel, Commissioner, by our offi cers. Our endeavor is to fi nally
Mumbai
place the judgements on website as soon as
Suvir Misra, Addl.
possible so as to enable the Departmental
Commissioner, Kolkata
S.K. Mall, Addl. offi cers and stake holders easy access.
Commissioner, Ahmedabad
2. The concerted efforts of
Co-ordinator:
Zonal offi ces in forwarding adjudication
Ms Shweta Bector, Deputy
Commissioner orders in favour of the Department would
P.K. Sharma, Superintendent
further bridge the present requirement in
O/o Chief Commissioner the regard.
(AR CESTAT, West Block-2,
3. We look forward to
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Disclaimer: All efforts have offi cers.
been made to ensure that
With Best Wishes
the information contained is
correct. The offi ce of Chief
Commissioner (AR) CESTAT,
New Delhi does not hold itself
liable for any consequences,
legal or otherwise. Sandhya Baliga
Member (L&J),CBEC
2012] INDEX iii
iv ECS Law Reporter
2013] M/S Hindustan Granities Vs. CCE, Bangalore 1
2013 (2) ECS ( ) (Bang - HC)
IN THE HIGH COURT OF KARNATAKA AT
BANGALORE
DATED THIS THE 31ST DAY OF OCTOBER 2012
BEFORE
THE HON’BLE MR. JUSTICE H.G. RAMESH
M/S HINDUSTAN GRANITIES
VERSUS
ASSISTANT COMMISSIONER OF CENTRAL EXCISE,
BANGALORE
WRIT PETITION NO.23884 OF 2012 (T-TAR)
BETWEEN
M/S HINDUSTAN GRANITIES
NO.5 LALBAGH HOSUR ROAD
WILSON GARDEN (OPP. 2ND CROSS)
BANGLORE-27
REP. BY SHRI M.G. ANANDA REDDY
(PROPRIETOR) … PETITIONER
AND:
ASSISTANT COMMISSIONER OF CENTRAL EXCISE
BANGALORE III DIVISON, 7TH FLOOR
KENDRIYA SADAN, KORAMANGALA
BANGALORE – 34 …RESPONDENT
(BY SMT.C. GEETHA, ADVOCATE FOR
SRI N.R. BHASKAR, SENIOR CGSC)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE
CONSTITUTION OF INDIA PRAYING TO DIRECT THE RESPONDENT
TO REFUND INTEREST PAYBACK FORTHWITH THE AMOUNT OF RS.
10,60,931/- (RUPEES TEN LAKHS SIXTY THOUSAND NINE HUNDRED
AND THIRTY ONE ONLY) ANN-G DATED 31.5.2012 TOGETHER WITH
INTEREST COLLECTED DURING THIS PERIOD OF INVESTIGATION
AND ALLOW THE WRIT PETITION.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING
IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:
“In view of the statutory remedy of appeal available to the petitioner, I
2 ECS Law Reporter [2013
decline to entertain this Writ Petition” [Para 1]
ORDER
H.G. RAMESH, J. (Oral):
This Writ Petition is directed against the order dated 31.05.2012
rejecting the claim for interest of Rs. 10,60,931/- on the pre-deposited amount
of Rs. 1,00,00,000/- (Rupees One Crore) refunded to the petitioner. Learned
Counsel appearing for the petitioner does not dispute that the aforesaid
impugned order at Annexure – G is appealable under Section 35 of the
Central Excise Act, 1944. In view of the statutory remedy of appeal available
to the petitioner, I decline to entertain this Writ Petition but with liberty to
the petitioner to avail of the statutory remedy of appeal as against the order
impugned herein in accordance with law.
Petition dismissed.
2013] M/s Karnataka Agro Chemicals Vs. CCE, Bangalore 3
2013 ( ) ECS ( ) (Bang - HC)
IN THE HIGH COURT OF KARNATAKA AT
BANGALORE
DATED THIS THE 11TH DAY OF JANUARY, 2013
PRESENT
THE HON'BLE MR.JUSTICE D V SHYLENDRA KUMAR
AND
THE HON'BLE MR.JUSTICE B MANOHAR
M/S KARNATAKA AGRO CHEMICALS
VERSUS
THE COMMISSIONER OF CENTRAL EXCISE,
BANGALORE
CEA Nos. 41 - 52 of 2012
BETWEEN:
M/S KARNATAKA AGRO CHEMICALS
REP. BY ITS PARTNER MR MAHESH G SHETTY APPELLANT
[By Sri G Sridhar, Adv. for M/s. Indus Law, Advs.]
AND:
THE COMMISSIONER OF CENTRAL EXCISE,
BANGALORE RESPONDENT
[By Sri N R Bhaskar, Sr. CGSC]
THESE CEAs ARE FILED UNDER SECTION 35G OF THE CENTRAL
EXCISE ACT, 1944 PRAYING TO SET ASIDE THE ORDER DATED02.02.2012
PASSED IN TRIBUNAL BEARING NO. 187- 198/2011 VIDE ANNEXURE
- A AND MODIFIED AS PER ORDER DATED 28.05.2012 PRODUCED AS
ANNEXURE - B AND GRANT COMPLETE WAIVER OF PRE-DEPOSIT IN
RESPECT OF THE DEMAND OF RS. 26,16,00,751/- (RUPEES TWENTY
SIX CRORE SIXTEEN LAKHS SEVEN HUNDRED FIFTY ONE ONLY)
ORDER OF THE RESPONDENT DATED 30.03.2010/31.03.2010
PRODUCED AS ANNEXURE - K, IN THE INTEREST OF JUSTICE AND
EQUITY AND ETC.,
THESE CEAs COMING ON FOR ORDERS, THIS DAY,
SITYLENDRA KUMAR, J., MADE THE FOLLOWING:
“In the revenue matters, Supreme Court has time and again said granting
stay should be an exception and not a rule. However, under the provisions
of the Act, pre-deposit is a rule and dispensation is an exception in terms
of Section 35G of the Act” [Para 11]
4 ECS Law Reporter [2013
ORDER
1. These appeals are preferred under Section 35G of the Central Excise
Act,1944, (for short `the Act') by the assessee, who is in appeal before
the Tribunal under Section 35B of the Act in appeal Nos. E/1364 to
1375/2010 has come up for orders before us on I.A.No. IV/2012 moved
by the respondent seeking for vacating the ex-parte interim order of
stay granted by this Court on 12.10.2012
2. We have heard Mr. G. Sridhar, learned counsel appearing for the
appellant and Mr.N.R. Bhaskar, learned Sr. CGSC appearing for the
respondent - the Commissioner of Central Excise, Bangalore.
3. Appeals though purporting to be under Section 35G of are those
directed against the order dated 10.02.1012 passed by the Tribunal on
Stay Application Nos. E/STAY/785 TO 796/2010 pending appeals
in Appeal No. E/1364 to 1375/2010 before the Tribunal was an
application under Section 35F of the Act for waiver of the amount
in deposit, which was the subject matter of appeals and which was
without any dispute of the value of Rs.26,00,00,000/- . The Tribunal
on examination of the application passed the order in favour of the
appellant and dispensed with the pre-deposit of the amount over and
above Rs.5,00,00,000/- i.e., to the extent of Rs.21,00,00,000/-deposit
was dispensed with and the Tribunal directed the appellant to deposit
only a sum of Rs.5,00,00,000/- after examining the application and
further material placed by the assessee before the Tribunal and also
taking into consideration the financial position of the assessee.
4. The Tribunal in terms of the order also granted eight weeks time to
comply with the order and it was made a condition that it is subject to
the compliance of this direction to deposit the sum of Rs.5,00,00,000/-
(Rs. Five Crores only) waiver of pre-deposit of the penalty imposed on
the assessee and the balance amount of the tax liability will operate.
5. The appellant deposited only Rs.50,00,000/- (Rs. Fifty Lakhs only
) within the permitted time and made Misc. application Nos.433-
444/2012 seeking for extension of time, the Tribunal in terms of its
order dated 28.05.2012 acceded to the request of the appellant and
granted further eight weeks time there from for deposit of balance
amount of Rs.4,50,00,000/- as per the earlier order.
6. The appellant has not deposited the amount before the Tribunal so
far. Instead the appellant had come up before this court by filing
W.P.Nos.25196 & 25305-315/2012 (CESTAT). However, the writ
petitions were disposed off by this court by order dated 22.09.2012
granting liberty to the appellant to prefer appeals. It is in this
background the present appeals are preferred and this court in terms
of the order dated 12.10.2012 granted interim stay. It is thereafter the
respondent – revenue after having been served has come up with the
application I.A.IV/2012 for vacating the order of stay.
2013] M/s Karnataka Agro Chemicals Vs. CCE, Bangalore 5
7. At the request of learned counsel for the parties, these appeals are taken
up for final disposal having regard to the limited scope involved in these
appeals. The appeals are preferred only against an order passed on the
applications under Section 35F of the Act seeking for waiver of pre-
deposit. We notice that the Tribunal itself in fact had granted waiver
to the extent of Rs.21,00,00,000/- which was the requirement of deposit
and directed the appellant to deposit only a sum of Rs.5,00,00,000/- and
time of eight weeks for deposit of the amount had also been granted.
The assessee did not question this order at that time, on the other hand,
the assessee went before the Tribunal seeking for further extension of
time, that was also accepted. It is thereafter the assessee has come up
with the writ petitions and now in appeals.
8. Submission of Mr. Sridhar, learned counsel for the appellant is that
the Tribunal has not at all taken note of the financial position of the
assessee and prima facie case of the subject matter of the appeal
and therefore, submits that the order warrants interference and also
places reliance on the judgment of the Supreme court in the decision
of BENARA VALVES LTD. AND OTHERS Vs. COMMISSIONER OF
CENTRAL EXCISE AND ANOTHER reported in (2006) 13 Supreme
Court Cases 347. At paragraphs 11 and 12 of this judgment is the
discussion about the scope of an application under Section 35F of the
Act, particularly, the expressions of "undue hardship" and "safeguard
the interest of the Revenue" which has to be balanced by the Tribunal
while passing orders on the application seeking for waiver of pre-
deposit. Further submission of Mr. Sridhar, learned counsel is that
the defects and likelihood of prejudice and injury that would be caused
to the appellant for insisting on pre-deposit and also the possibility
that due to financial constraints the appellant being unable to make
pre-deposit of the amount in question that also virtually disentitle the
right of appellant etc.
9. On the other hand, Mr. Bhaskar, learned Sr. CGSC has brought to our
notice the order passed by the Tribunal, particularly, at paragraph Nos.5
and 6 wherein the Tribunal has considered the prima facie case and has
also looked into the financial position of the assessee, as indicated
at paragraph No.6. The Tribunal was of the opinion, that there was not
much prima facie case, noticing the financial position as on 31.03.2011.
And it is because of this reason the Tribunal ordered deposit of only
Rs.5,00,00,000/- and not the entire amount of Rs.26,00,00,000/- as per
the requirement of Section 35F of the Act. Proviso came to the rescue
of the assessee for waiver of deposit of Rs.21,00,00,000/-.
10. While we find the judgment of the Supreme Court is not attracted to
the facts of the case, as the Tribunal considering the prima facie nature
of the appeal has also examined the financial position of the assessee.
We also find that the conduct of the assessee in seeking an order under
Section 35F of the Act taking the benefit of an order and further seeking
6 ECS Law Reporter [2013
extension of time and later on turning around and filing writ petitions
and appeals under Section 35G of the Act is neither bona fide conduct
nor one to be encouraged.
11. In the revenue matters, Supreme Court has time and again said
granting stay should be an exception and not a rule. However, under
the provisions of the Act, pre-deposit is a rule and dispensation is an
exception in terms of Section 35G of the Act and in the present case,
while on merits substantial relief had been granted by the Tribunal,
it is not as though the assessee was not granted any relief at all. The
assessee itself having accepted the order had sought for further time
to deposit balance amount of Rs.4,50,00,000/- which has not been
deposited till now.
12. It is in this background, we find no occasion to interfere in a matter
of this nature and therefore, we find no occasion to either continue
the interim order or retain these appeals on board. Interim order
dated 12.10.2012 is vacated. Accordingly, these appeals are dismissed.
However, we grant four more weeks time to deposit the balance
amount of 4,50,00,000/- before the Tribunal.
13. In view of the main appeals itself having been dismissed, I.A.II/2012
for condonation of 65 days delay does not survive for consideration, it
is accordingly dismissed.