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TMI Blog2014 (2) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... ade simplicitor under Section 154(4) of the Finance Act, 2003 as a result of withdrawal of exemption retrospectively then whether the machinery provided of the special procedure and independent mechanism provided for the recovery and the interest chargeable had been duly followed by the department while confirming the demand ? iv) Whether the Hon'ble CESTAT was correct in confirming interest on the duty amount in the light of the amended provisions of Section 11AB when confirming interest on duty and refund amount for the period prior to 2001 ? v) Whether the CESTAT failed to appreciate that the Commissioner of Central Excise, Shillong by passing an ex parte order without giving an opportunity of personal hearing to the appellant had violated the principles of natural justice as the same had taken away the right of the appellant to represent their case and file material and submissions in support of their case." 2. The appellant claimed exemption from Central Excise duty relying on Notification No.32/99-CE dated 08.07.1999. On that basis a dispute arose as to entitlement of the appellant for refund on the one hand and liability to pay the amount claimed by the department on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s being unreasonably retrospective (see : Rama Krishna vs. State of Bihar - AIR 1963 SC 1667). It was also held in Para 30 of the Judgment that when the Supreme Court reversed the view of High Court the litigant has to bear the burden of duty for the period they had manufactured the excisable goods. It was further held that by enacting Section 154, Parliament has fore-stalled the decision by this Court and in effect taken away the basis for decisions of the High Court. Under the circumstances, it cold not be said that financial burden was enforceable or unforceable. Following such principle, mere transfer of the matters from Hon'ble High Couirt of Guwahati as noticed in the Order of Adjudication (at page 28 of the Paper Book) the Appellants have no scope to argue that they do not have liability as determined by the learned Adjudicating Authority. 14. It was held by the Apex Court in R.C.Tobacco's case in para 30 that it is established law that benefits granted by exemptions may be modified or withdrawn. By the Notification the accrued liability to pay excise duty is merely suspended. Such an exemption by its very nature is susceptible to being revoked or modified or subjected to o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order passed in declining to accept the claim for refund and in directing payment of excise duty covered by the exemption notification was violative of principles of natural justice. The show cause notices issued to the petitioner are dated 28.08.2001 and 10.09.2001 while the retrospective amendment was introduced in the year 2003 and thus the appellant had no opportunity to contend that the benefit could not be retrospectively withdrawn, having regard to the individual facts and circumstances of the case of the appellant. Upholding of retrospectivity of withdrawal of exemption did not debar the adjudicating authority to go into the question of retrospectivity being arbitrary and not applicable to the case of the appellant. To this extent the judgment of the Hon'ble Supreme Court in R.C.Tobacco has not been correctly applied by the CESTAT which requires interference by this Court by way of remand for fresh consideration. 5. Learned counsel for the Revenue supports the impugned order and submits that even though the retrospective amendment was introduced in the year 2003 while the show cause notices had been issued in the year 2001, the order of the adjudicating authority itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I of the Constitution; (2) the law should not be prohibited by any particular provision of the Constitution such as, for example, Articles 276(2), 286, etc. and (3) the law or the relevant portion thereof should not be invalid under Article 13 for repugnancy to those freedoms which are guaranteed by Part III of the Constitution which are relevant to the subject-matter of the law." 21. A law cannot be held to be unreasonable merely because it operates retrospectively. Indeed even judicial decisions are in a sense retrospective. When a statute is interpreted by a court, the interpretation is, by fiction of law, deemed to be part of the statute from the date of its enactment. The unreasonability must lie in some other additional factors. The retrospective operation of a fiscal statute would have to be found to be unduly oppressive and confiscatory before it can be held to be so unreasonable as to violate constitutional norms: "Where for instance, it appears that the taxing statute is plainly discriminatory, or provides no procedural machinery for assessment and levy of the tax, or that it is confiscatory, courts would be justified in striking down the impugned statute as unconstitut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondents nor can they be asked to recover their dues from persons who may have ultimately taken over the responsibility to pay the excise duty as a result of an agreement with the manufacturer. (See in this connection State of Rajasthan v. J.K. Udaipur Udyog Ltd. (2004) 7 SCC 673 SCC at p. 692.) 50. Furthermore having upheld the constitutional validity of Section 154 it would be a pyrrhic victory for the Union of India if they could not in fact recover the tax. It is not a case where the legislation has merely withdrawn the exemptions. The consequences of the withdrawal have been statutorily provided for including the recovery of the excise duties refunded or not paid. The effective period of such imposition is about eight months. The State has been deprived of revenue without any corresponding benefit. It may be that the retrospective operation may operate harshly in some cases, but that would not by itself invalidate the demand. (See Epari Chinna Krishna Moorthy v. State of Orissa (1964) 7 SCR 185 : AIR 1964 SC 1581). It needs to be emphasised that in effect the retrospective operation extended over a very short period and principles of equity must give way to express statutory p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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