TMI Blog2015 (5) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... na's decision was appealed against by the Revenue to the Hon'ble Supreme Court, but though the decision was not interfered with, that Judgment will not bind it because the question of law is kept open by the Hon'ble Supreme Court, then, that is plainly and simply not per incuriam. Tribunal was aware of this settled test namely whether there is a prima facie point or arguable case and whether the appellant assessee or party before the Tribunal had established that there was a financial hardship. However, the Tribunal lost sight of the fact that the tests, as are evolved by the Hon'ble Supreme Court, cannot be taken to such ridiculous extreme or viewed with such rigor that would make it impossible for anybody to obtain an interim stay or a waiver, partial or full, in his favour of the condition of pre-deposit. - Tribunal in reaching the conclusion that the Appellant has not made out any prima facie case extensively dealt with the arguments as if it is called upon to decide the Appeal finally. That it was not called upon by the parties to do so nor was it expected of the Tribunal at the interlocutory or interim stage. All these observations and the entire attempt, is unsustainable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation filed by the assessee and virtually concluding the issue? (ii) Whether the Tribunal in the present facts and circumstances and in law erred in applying the test that prima facie an arguable case something which merits attention of the Tribunal and not a case which will ultimately succeed. (iii) Whether under the facts and circumstances, the Hon'ble Tribunal was right in holding that the Appellants are not entitled to utilize the credit of AED (GSI) of ₹ 6,59,36,795/- for payment of BED on tyres, on the ground that Explanation to Rule 3(7)(b) of Cenvat Credit Rules, 2004 would be applicable only in respect of AED (GSI) levied after 1.4.2000, apart from such AED (GSI) being paid after 1.4.2000? (iv) Whether under the facts and circumstances, the Hon'ble Tribunal is correct in holding that the credit of AED (GSI) in dispute cannot be utilized for payment of BED on the final products on the ground that the said AED (GSI) pertained to the period 16.3.1995 to 2.6.1998, even though the AED (GSI) was paid after 1.4.2000? 4. Mr. Sridharan, the learned senior counsel appearing on behalf of the assessee submits that the Tribunal has seriously erred in holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal does not raise any substantial questions of law. It deserves to be dismissed. 6. With the assistance of the learned counsel appearing for both sides, we have perused the Memo of Appeal and the annexures including the impugned order. 7. Before we proceed, we wish to invite the attention of the Tribunal to some pertinent observations of the Hon'ble Supreme Court in the case of United Commercial Bank v. Bank of India AIR 1981 SC 1426. The Hon'ble Supreme Court while considering as to whether an injunction can be granted to restrain encashment of Bank guarantee by resorting to the powers conferred in a trial court/civil court under order 39 of the Code of Civil Procedure held as under: 50. No injunction could be granted under Order 39, Rules 1 and 2 of the Code unless the plaintiffs establish that they had a prima facie case meaning thereby that there was a bona fide contention between the parties or a serious question to be tried. The question that must necessarily arise is whether in the facts and circumstances of the case, there is a prima facie case and, if so, as between whom? In view of the legal principles applicable, it is difficult for us to say on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt has evolved in the decision reported in the case of Inayat Hussain Fakhruddin v. Union of India 1979 Mh. L.J. 515 ought to be borne in mind. 19. Mr. Potey, however, lastly urged an argument based upon sub-rule (2) of rule 16 and the circumstances that a different view has been taken as to the operation of Section 281 and rule 16 by another High Court, thereby indicating that a triable issue arises between the parties. The first contention indicating that a triable issue arises between the parties. The first contention which Mr.Potey raised based upon sub-rule (2) of rule 16 was, that the words used in sub-rule (2) are where an attachment has been made . Mr. Potey contended that this would defer to the physical date of attachment and not the deemed date. According to Mr. Potey under rule 51 a fiction of relation back is created. There is in Mr. Potey's opinion a conflict between rule 16 sub-rule (2) and rule 51 and if there is a conflict, it was Mr. Potey's submission that it should be resolved in favour of the assessee. The eanctment being a fiscal enactment it should be so construed that the benefit should go to the assessee. I do not wish to express any opinion th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn is that a case which is not apparently barred by any provisions of law and in respect of which something can be said in favour of the plaintiff. 12. Equally as held by the Hon'ble Supreme Court in the case of Kihota Hollohons v. Zachilhu AIR 1993 SC 412, at page 455 para 51, the purpose of interlocutory orders is to preserve in status-quo the rights of the parties, so that, the proceedings do not become infructuous by any unilateral overt acts by one side or the other during its pendency. If we apply these tests to the facts and circumstances of the present case what we note is that the Tribunal had before it an Appeal of the assessee challenging the order of the commissioner who is manufacturer of tyre. It also manufactured the dipped nylon tyre cord fabrics during 16th March, 1995 to 2nd June, 1998. The dipped nylon tyre cord fabrics was subject to Additional Duty of Excise (in lieu of sales tax ) under the Additional Duty of Excise (Goods for Special Importance) Act, 1957 (hereinafter referred to as AED (GSI) , for short). This duty liability was not discharged, but disputed by the appellant assessee. The issue of classification of the goods was raised and which took ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in Goodyear India Ltd. (supra) was challenged by the Revenue in the Hon'ble Supreme Court by filing a Special Leave Petition 6312 of 2008. Though the High Court of Punjab and Haryana decision's in the case of Goodyear India Ltd. (supra) was not interfered with and the Revenue's Special Leave Petition was dismissed, the question of law was kept open. Thus, there is no finality attached to this judgment of Punjab and Haryana High Court and it will not bind the Revenue. 15. In dealing with these contentions, what the Tribunal has noted from paragraph 5.2 onwards is that the credit of duties specified in Clauses (I) to (XI) of Rule 3 of the Cenvat Credit Rules, would indicate that the credit of duties paid on inputs or capital goods could be taken if such input goods are received in the factory of the manufacturer only on or after 10th September, 2004, thus, there is merit in the contention of the Revenue that in the present case credit was taken in June 2006. The applicable Rules would be Cenvat Credit Rules of 2004, as per which the credit could not have been taken since the inputs were received/captively consumed in the factor of manufacturer prior to 1st Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2000 used in the Explanation to sub-rule (6) of Rule 3 of the Cenvat Credit Rules, 2002, should be construed and interpreted as duty ought to be leviable under section 3 of the AED (GSI) Act and ought to have been paid on or after the 1st day of April, 2000. In the present case the duty payment pertained to the period from 16.09.1995 to 02/06/1998 and therefore, the appellant cannot utilize the said credit for payment of basic excise duty for the period after 01/04/2000 and we hold accordingly. 5.8. The reliance placed by the appellant in the Goodyear India Ltd. case does not help for the following reasons. The ratio laid down in those decisions are not final as in the SLP filed by the department in the said case before the Apex Court, it was held that question of law is kept open . Secondly, the said decisions did not take into consideration the meaning ascribed to the expression paid by the Hon'ble Apex Court in the Elphinstone Spinning Mills case and of the Hon'ble High Court of Gujarat in the Tata Chemicals case. Thirdly, the Tribunal was overlooked the decision of the Special Bench decision in the Tata Iron Steel Company Ltd. case. Fourthly, a larger Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court in a decision of its constitution Bench in the case of Central Board of Dawoodi Bohra Community v. State of Maharashtra AIR 2005 Supreme Court 752. The Hon'ble Supreme Court in this context has observed as under: 7........... Per incuriam means of decision rendered by ignorance of a provisions binding decision such as a decision of its own or of a Court of co-ordinate or higher jurisdiction or in ignorance of the terms of a statue or of a rule having the force of law. A ruling making a specific reference to an earlier binding precedent may or may not be correct but cannot be said to be per incuriam. In a decision, Sunita Devi v. State of Bihar AIR 2005 SC 498, the Hon'ble Supreme Court explained the term in legal parlance. It held as under:- 20. Incuria literally means carelessness . In practice per incuriam is taken to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The quotable in law , as held in Young V. Bristol Aeroplane Co. Ltd. (1994) 2 All ER 293, is avoided and ignored if it is rendered, in ignoraium of a statute or other binding authority . Same has been accepted, approved a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of such conditions would vitiate the exercise of the discretionary power by the Tribunal. It lost sight of the fact that the power to grant a stay or waiver of the condition of pre-deposit is discretionary. The discretion must be exercised judiciously and not arbitrarily or capriciously. The Tribunal should not act as per its whims and fancies, but apply settled principles of law even at the interlocutory stage. The Tribunal has completely lost sight of all this, which is evident from the impugned order. It cannot be sustained. It accordingly is quashed and set aside. The Appeal succeeds. There will be a waiver of the condition of pre-deposit of the duty amount and interest pending the Appeal. There will also be a stay against recovery of the sum demanded under the Order-in-Original. 20. While we allow the Appeal, we take due note of the arguments of Mr.Rao that this was not a case of complete waiver but a partial one. Considering that the duty demanded was for the period 16th March, 1995 to 2nd June, 1998, and it is being confirmed, after all attempts to evade payment that we should not allow the assessee to get away, but direct him to deposit at least a substantial sum. In t ..... 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