TMI Blog2019 (12) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 10/12.3.1993 passed by the High Court of Delhi, disposing of the writ petitions filed by the appellant in no way extricate the appellant from the process to which the appellant had voluntarily submitted itself at its own volition, namely, under Rule 9B of the Rules. Thus, it was not a case of duty not levied or not paid or shortlevied or shortpaid. The understanding of the parties was absolutely clear that the appellant was liable to pay excise duty, but for the exposition of the High Court of Delhi in J.K. Cotton Spinning Weaving Mills Co. Ltd. Ors. [ 1980 (10) TMI 71 - HIGH COURT OF DELHI ]. Understood thus, the appellant is obliged to fulfill its statutory obligations including those arising from the undertaking/bonds in Form B-13 and cannot resile from the process to which it had submitted itself without any demur, namely under Rule 9B of the Rules. Section 11A of the Act as applicable at the relevant time, would apply to cases of recovery of duties not levied or not paid or short levied or short paid etc. - The case at hand, however, would come within the dispensation predicated by Rule 9B of the Rules, which deals with provisional assessment to duty. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no order/directions to clear the yarn on provisional assessment basis. The appellant cannot be allowed to approbate and reprobate for inviting the High Court of Delhi to pass interim order stipulating that the appellant would execute bonds in Form B-13 referable to Rule 9B of the Rules and continue to file monthly RT-12 returns from time to time, on which endorsements have been made indicating that it is a case of provisional assessment. The appellant cannot now be permitted to urge that it had not submitted to the process of provisional assessment as such for lack of a specific order of the concerned authority in that behalf. Appeal dismissed. - Civil Appeal No. 5297 of 2008 - - - Dated:- 9-12-2019 - A. M. Khanwilkar And Dinesh Maheshwari, JJ. For the Petitioner : Manik Karanjawala For the Respondent : B. Krishna Prasad, B. V. Balaram Das JUDGMENT A. M. Khanwilkar, J. 1. This appeal is directed against the judgment and order dated 13.9.2007 passed by the High Court of Judicature at Bombay in Central Excise Appeal No. 237 of 2006. Briefly stated, the appellant is engaged in manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnexure H) and to restrain defendants 3 and 4 from taking any steps or/proceedings pursuant to and in accordance with the aforesaid directives and notices. (d) Issue a writ of prohibition or any other appropriate writ, order or direction in the nature therefore, restraining the respondent from collecting duty of excise on yarn obtained by the petitioner in its composite mill which is further processed in the manufacture of fabrics. (e) Issue appropriate writ, order or direction directing the respondent to refund the amount of duty illegally recovered from the petitioner in respect of yarn obtained in the petitioner s composite mills and further processed in the manufacture of fabrics for the period commencing from 15.7.1977 in respect of cellulosic spun yarn and non-cellulosic spun yarn and from 17.3.1972 and in respect of cotton yarn and from 15.7.77 upto the date of disposal of the present writ petition and in particular the amounts referred to in statement (annexure E) together with interest at the rate of 12% p.a. and in the alternative to direct Respondents No.3 and 4 to grant the refund as per refund claims dated 13.5.1981 (colly.); ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) hereinabove : and (c) pass such other and further orders as may be deemed just and proper. 3. The High Court of Delhi vide order dated 25.5.1981, while issuing notice on the said miscellaneous petitions, granted interim relief in terms of Prayer clause (a) reproduced above. In furtherance of the said interim relief, the appellant furnished an undertaking dated 2/10.3.1983 in order to secure the payment of differential tax to the Department of Revenue, Ministry of Finance (for short, the Department ) in the event of dismissal of its writ petitions. The format of that undertaking was in conformity with the prescribed undertaking in Form B-13 referable to Rule 9B of the Rules, submitted by the assessee in the case of provisional assessment. Later on, the High Court modified the interim relief on 14.5.1985. The relevant portion of the modified interim relief reads thus: there will be no stay with regard to future payments. During the pendency of the Writ Petition, where will be stay in respect of 50% of the disputed amount of duties claimed by the respondents as arrears on the condition that the applicant furnish Bank Guarantee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee in terms of the interim order passed by the High Court of Delhi. Yet an opportunity was offered to the appellant to send its response. The said letter of the Assistant Collector reads as follows: OFFICE OF THE ASSTT. COLLECTOR OF CENTRAL EXCISE: DIVISION FI 2ND FLOOR, MADHU INDUS ESTATE: P.B. MARG, WORLI, BOMBAY13 F.No.FI/FI/V(18)3/81/1735 Bombay, the 26th March, 1993 M/s. Bombay Dyeing Manufacturing Co. Ltd., (spring Mills), G.D. Ambedkar Road, Bombay-14. Gentlemen, Sub Delhi High Court CW.P. No.1235/81 M/s. Bombay Dyeing Mfg. Co. Ltd. Versus Union of India and OTHERS Please refer to various correspondences exchanged on the above said state subject. I have been directed to inform you that the aforesaid case was listed on 12.3.93 before Hon ble the Chief Justice and Hon ble Mr. Justice Anil Dev Singh, Delhi High Court, New Delhi. The aforesaid case is decided in view of the orders passed by the Supreme Court of India in the case of M/s. Rohit Mills Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd stay order is vacated, the Bank guarantee can become encashable immediately. Therefore, we need not go into this question as to whether Section 11A is or is not attracted, we are of the opinion that because the petitioner furnished the Bank guarantee, makes secured a stay order which was conditional as a result of which levy and recovery was stayed once writ petition has been dismissed and the stay order has been dismissed . The Bank guarantee has become encashable, neither it will be proper nor equitable for this Court to say or make an order that the Bank guarantee should not be encashed .. With the above observation, we dismiss the writ petition with no order as to cost. In view of the facts of the case discussed above, the Section 11A is not applicable in the instant case since the amount was secured by the Bank guarantee furnished by the assessee in terms of the stay order of Hon ble Delhi High Court. However, complying the orders given by the Supreme Court of India in case of M/s. Rohit Mills Ltd., this office would like to know whether petitioner desires Show Cause cum Demand Notice to be issued by the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rohit Mills. 3. The directions issued by the Hon ble High Court in the above matter on the basis of the directions issued as in the case of Rohit Mills contemplate that adjudication has now to be done pursuant to a Notice under Section 11A of the Act. It is specifically directed that in cases where such notice has been not issued, the Assistant Collector may issue such notice which should not go beyond 6 months. In the present case, no show cause notice under Section 11A has been issued and as such, as per the direction of the Hon ble Supreme Court in the case of Rohit Mills Ltd., which direction also forms part of the order of the Hon ble High Court disposing also forms part of the order of the Hon ble High Court disposing of the above writ petition, your are now required to issue a Notice under Section 11A of the Act. On receiving such a notice, we shall raise our objections thereto and we reserve our right to do so. 4. You have kindly intimated that the hearing in the above matter is now fixed for 11.5.1993. We may mention here that before any hearing is taken up a show cause notice under Section 11A will have to be first issued and an oppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cause notice, which may be issued as per the directions of the Hon ble Supreme Court. Under these circumstances, we would request you to first issue a show cause notice under Section 11A of the Act and then give us an opportunity to file a reply thereto and a hearing in that respect. The hearing already fixed for 11th May, 1993 may kindly be adjourned since the matter cannot be adjudicated without issuing a show cause notice under Section 11A of the Act as per the directions of the Hon ble High Court. Yours faithfully, Sd/Illegible [K.R. NAYAK] MANAGER 7. The Assistant Collector of Excise vide orderinoriginal dated 19.8.1993 noted that the appellant had filed classified lists for its products which had been approved provisionally and the appellant had been directed to pay excise duty. He also noted the objection of the appellant about nonissue of a Show Cause Notice under Section 11A of the Act. However, he proceeded to finalize the classification lists by noting that the classification lists filed earlier by the assessee were treated as provisional. 8. In furtherance of the said order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf. 10. The appellant carried the matter in appeal before the Commissioner of Central Excise (Appeals), who in turn, rejected the appeal vide order-in-appeal dated 31.5.2000. The Commissioner of Central Excise (Appeals) also upheld the demand for excise duty and rejected the plea taken by the appellant regarding the necessity to issue a Show Cause Notice under Section 11A of the Act. 11. The appellant then unsuccessfully carried the matter in appeal being Appeal No. E/2747/2000 before the Customs, Excise and Service Tax Appellate Tribunal (for short, the CESTAT ). That appeal was dismissed on 22.2.2006. Against that decision, the appellant filed Central Excise Appeal No. 237/2006 before the High Court of Judicature at Bombay under Section 35G of the Act, which was eventually dismissed on 13.9.2007 following the decision of the Division Bench of the same High Court dated 7.9.2007 in First Appeal No. 2597/2005 titled as The Jam Shri Ranjitsinghji Spg. Wvg. Mills Co. Ltd. Anr. vs. Union of India Ors. 2007 (109) Bom LR 2167. 12. To complete the narration of facts, it is relevant to mention that the relied upon decision was assai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court of Delhi, the demand for central excise duty for the period starting from 25.5.1981 to 13/14.5.1985 would be clearly barred by limitation. It is then urged that had the authorities adopted the route of provisional assessment, they were obliged to expressly state that position by passing an order. In the present case, no such order has been passed by the authorities. To buttress the argument that it is incumbent upon the authorities to pass formal specific order directing provisional assessment, reliance is placed on the circular issued by the Ministry of Finance (Department of Revenue) bearing number 26/1989 dated 24.4.1989. It is urged that the fact that the appellant had executed B-13 bonds or the monthly RT-12 returns purportedly treated as provisional assessment, can never be held against the appellant especially in light of the observation of the High Court of Delhi that a formal notice be issued to the appellant, which was the basis for disposing of the writ petitions. In support of the above arguments, the appellant would rely on decisions of this Court in Rohit Mills Ltd. (supra); The Bhopal Sugar Industries Ltd. vs. The Income Tax Officer, Bhopal 1961 (1) SCR 47 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent is placing heavy reliance on the decision of the Division Bench of the High Court of Judicature at Bombay in the case of The Jam Shri Ranjitsinghji (supra), which has been upheld by this Court by dismissing Civil Appeal No. 1551/2008 on 7.3.2008. It is urged that the facts of the relied upon case and the present case are almost similar, if not identical. According to the respondent, the appeal is devoid of merits and the same be dismissed. 17. We have heard Mr. Kavin Gulati, learned senior counsel for the appellant and Mr. A.K. Sanghi, learned senior counsel for the respondent. 18. After cogitating over the rival submissions, the core issue that requires to be immediately addressed is about the purport of the order passed by the High Court of Delhi dated 10/12.3.1993, while disposing of the writ petitions filed by the appellant. The said order will have to be understood in the context of the stand taken by the appellant before the High Court. In the said writ petitions, the appellant had asserted that the fabric manufactured by the appellant was not amenable to excise duty as it was not removed from the premises within the meaning of Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, under Rule 9B of the Rules. Thus, it was not a case of duty not levied or not paid or shortlevied or shortpaid. The understanding of the parties was absolutely clear that the appellant was liable to pay excise duty, but for the exposition of the High Court of Delhi in J.K. Cotton Spinning Weaving Mills Co. Ltd. Ors. (supra @ F.N.1). Understood thus, the appellant is obliged to fulfill its statutory obligations including those arising from the undertaking/bonds in Form B-13 and cannot resile from the process to which it had submitted itself without any demur, namely under Rule 9B of the Rules. 20. Indeed, the High Court of Delhi while disposing of the writ petitions vide order dated 10/12.3.1993, had adverted to the decision of this Court in Rohit Mills Ltd. (supra). On a fair reading of that decision, it is obvious that the Court dealt with two situations referred to therein. First, where Show Cause Notices under Section 11A of the Act have been served and the claim does not cover any period beyond six months from the date of receipt of the notices. Second, where there is dispute as to whether the notice under Section 11A had been issued or not. In the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the rules made thereunder with intent to evade payment of duty, by such person or his agent, to whom a notice is served under the proviso to subsection (1) by the Central Excise Officer, may pay duty in full or in part as may be accepted by him, and the interest payable thereon under section 11AB and penalty equal to twentyfive per cent. of the duty specified in the notice or the duty so accepted by such person within thirty days of the receipt of the notice. (2) Central Excise Officer shall, after considering the representation, if any, made by the person on whom notice is served under subsection (1), determine the amount of duty of excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined: Provided that if such person has paid the duty in full together with, interest and penalty under subsection (1A), the proceedings in respect of such person and other persons to whom notice is served under subsection (1) shall, without prejudice to the provisions of sections 9, 9A and 9AA, be deemed to be conclusive as to the matters stated therein: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty. Explanation 2. -For the removal of doubts, it is hereby declared that the interest under section 11AB shall be payable on the amount paid by the person under this subsection and also on the amount of shortpayment of duty, if any, as may be determined by the Central Excise Officer, but for this subsection. Explanation 3 .-For the removal of doubts, it is hereby declared that no penalty under any of the provisions of this Act or the rules made thereunder shall be imposed in respect of payment of duty under this subsection and interest thereon. (2C) The provisions of subsection (2B) shall not apply to any case where the duty had become payable or ought to have been paid before the date on which the Finance Bill, 2001 receives the assent of the President. (3) For the purposes of this section- (i) refund includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or furnishing of such information or completion of such test or enquiry, be assessed provisionally at such rate or such value (which may not necessarily be the rate or price declared by the assessee) as may be indicated by him, if such assessee executes a bond in the proper form with such surety or sufficient security in such amount, or under such conditions as the proper officer deems fit, binding himself for payment of the difference between the amount of duty as provisionally assessed and as finally assessed. (2) xxx xxx xxx (3) The Collector may permit the assessee to enter into a general bond in the proper form with such surety or sufficient security in such amount or under such conditions as the Collector approves for assessment of any goods provisionally from time to time: Provided that, in the event of death, insolvency or insufficiency of the surety or where the amount of the bond is inadequate, the Collector may in his discretion demand a fresh bond and may, if the security furnished for a bond is not adequate, demand additional security. (4) The goods provisionally assessed under subrule (1) may be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court, after detailed analysis, concluded that in a case such as the present one, it is not open to the assessee to insist for a notice under Section 11A of the Act, which has no bearing in cases of provisional assessment. The High Court of Judicature at Bombay, while dealing with similar arguments, observed thus: 33. The question, therefore, to be considered is, firstly, whether circumstances for making provisional assessment existed in the present case and secondly, whether a provisional assessment order was made before clearance of the yarn for captive consumption? 34. With reference to the first contention, the argument of the appellant is that none of the circumstances for making provisional assessment set out in Rule 9B existed in the present case. Moreover, classification list and the price list were already approved, and therefore, there was no scope for making provisional assessment. There is no merit in this contention because under Rule 9B( 1)(c) of the 1944 Rules, even after the assessee has produced all the necessary documents and furnished full information for the assessment of duty it was open to the assessing officer to mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by the High Court of Judicature at Bombay. The High Court rightly observed that the said decisions have no application to case of provisional assessment followed by a final assessment. While dealing with those decisions, the Court observed thus: 39. At the outset, it may be noted that the observations made by the Apex Court in all the above cases regarding the issuance of notice under Section 11A of the 1944 Act was in the context of the excise duty that became payable on account of the Apex Court upholding the validity of the amendment to Rule 9 and 49 of the 1944 Rules with retrospective effect from 28.2.1944. Obviously, the said observations were meant to apply to cases where the final assessments were already made and not in respect of cases where the assessments were provisional, because duty liability is determined only at the time of final assessment. In other words, what is held in all the above cases is that, in spite of the retrospective amendment to Rule 9 and 49 is upheld, where the assessments are already finalised the duty under the amended Rule 9 and 49 can be recovered only by issuing notice under Section 11A of the 1944 Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conditional interim order is obliged to discharge its obligation in terms of the bonds executed in Form B-13 and the monthly RT-12 returns filed from time to time for the relevant period. 30. It is not necessary for this Court to dilate on the other observations in the decision of the High Court of Judicature at Bombay in The Jam Shri Ranjitsinghji (supra). For the same reason, it is not necessary for us to deal with the exposition in Metal Forgings (supra). That decision has been pressed into service to assail the finding of the Commissioner of Central Excise (Appeals), who had observed that the order passed to finalize the assessment based on the RT-12 returns itself be treated as Show Cause Notice. It is not necessary to dilate further on this aspect. 31. Similarly, the exposition of this Court in Metal Forgings (supra) and Hindustan National Glass Industries Ltd. (supra) to urge that specific order was required to be passed before an assessment is treated as a provisional assessment, will be of no avail considering the execution of bonds in Form B-13 by the appellantassessee at its own volition, which is referable to provisional assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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