Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (5) TMI 290 - BOMBAY HIGH COURT

2015 (5) TMI 290 - BOMBAY HIGH COURT - 2015 (321) E.L.T. 122 (Bom.) - Validity of Tribunal's order - Tribunal decided issue on merit instead of deciding the stay application - Denial of CENVAT Credit - Wrongful availment of CENVAT Credit - Held that:- When there is a attempt by the assessee and to demonstrate as to how a arguable case exists and in that process the assessee places reliance on a decision of a High Court and having a bearing of the issue, then, the attempt to not only distinguishe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vision or a binding precedent. Such is not a case which is found. If the Tribunal was of the view that the High Court of Punjab and Haryana'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 pri .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lusion 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 in law. - If that right is to be meaningful or purposeful and must be preserved and saved unless there are compelling circumstances, then, imposition of s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rder. It cannot be sustained. It accordingly is quashed and set aside. - Decided in favour of assessee. - CENTRAL EXCISE APPEAL NO.261 OF 2014 - Dated:- 4-3-2015 - SRI. S.C. DHARMADHIKARI AND SRI. SUNIL P. DESHMUKH, JJ. For The Appellant : Mr.V.Sridharan, Senior Advcoate a/w. Mr.Prakash Shah, Mr.Prasad Paranjpe, Mr.Ashish Philips, Ms.Anjali Hirawat, Mr.Jas Sanghavi, Ms.Niyati Hakani i/b. M/s.PDS Legal, Advocate For The Respondent : Mr.A.S. Rao with Ms.Suchitra Kamble, Advocate JUDGMENT This Appe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion order). The Adjudicating Authority confirmed a duty demand of ₹ 6,59,36,795/- against the appellant assessee along with interest thereon being the ineligible cenvat credit availed by the appellate assessee during April/May 2007. A penalty of ₹ 50,00,000/- had also been imposed under Rule 15 of the Cenvat Credit Rule, 2004. 3. Upon perusal of the order passed by the Tribunal, we are of the view that this Appeal raises substantial question of law. It is, therefore, admitted on the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ly 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 Tr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er there is any such case, the Tribunal has rendered elaborate findings and concluded the questions and issues in the pending Appeal. Mr.Sridharan submits that the attempt of the Tribunal in finding out a prima facie case or an arguable point should not result in the point or the issue being concluded. It is only a cursory reference to the submissions and the relevant material at the interlocutory stage which should result in the Tribunal either concluding that the Appellant raises no arguable o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ally meaningless. By imposition of the condition of deposit of entire duty amount at the interlocutory stage itself, so also by rendering elaborate findings and conclusions, the right of Appeal is completely lost to the appellant. The binding and sweeping conclusions which have been recorded will now stare in the face of the assessee even at the final hearing of the Appeal. In such circumstances, the Tribunal's order is totally illegal and erroneous. The discretion has not been exercised jud .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vat credit on the goods, by erroneously terming them as an inputs, that credit was not available at all. Once it was found to be wrongfully availed of and the demand of the Revenue has been confirmed, then, the Tribunal was justified in insisting on deposit of the entire sum. In the circumstances, this Appeal 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

prevent the appellant from recalling the amount of ₹ 85,84,456/-. The fact remains that the payment of ₹ 36,52,960/- against the first lot of 20 document made by the appellant to the Bank of India was a payment under reserve while that of reserve as well as against the letter of guarantee or indemnity executed by it. A payment 'under reserve' is understood in banking transactions to mean that the recipient of money may not deem it as his own but must be prepared to return it .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

parties or a serious question to be tried. Then, comes the other question which the Supreme Court dealt with and applicable at a interlocutory stage, namely, even if there was a serious question to be considered, the High Court had to consider the balance of convenience. 9. In the present case, the 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 f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. 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 wo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

should be so construed that the benefit should go to the assessee. I do not wish to express any opinion though I am not prepared to be taken in with the argument advanced by Mr. Potey. However, there is some substance in what he says that in view of the possibility of an interpretation of sub-rule (2) as to the fact of attachment and the different interpretation than the one which has been placed by Kerla High Court by me on section 281, a triable issue between the parties arises. It is true tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed is to show that he has some sort of prima facie case, which requires further investigation. It is not without some reluctance that I am inclined to think in the manner in which Mr.Potey wants me to do. But that can only be on terms. A litigation of this kind should not be used for purpose of defeating the provisions of tax laws. They have an impact on the public and involve rights and interest of other persons who are not before the Court apart from having a general effect upon the assessees .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

1977 confirmation has already taken place and a sale certificate issued. That the department thereafter is not responsible to do anything with reference to the auction purchaser of the property. If that is so, then it would be obvious that the injunction would be infructuous so far as that property is concerned. Interim injunction be issued on the above terms restraining the defendant from confirming the sale." 11. As this Court has succinctly summarized to a prima facie case, then the law .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

endency. 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, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2006, the duty demand was confirmed. 13. The appellant assessee paid this duty demand of AED (GSI), but took credit of the same in their cenvat credit account under AD(GSI). They utilized the credit of AD(GSI) towards payment of Central Excise Duty (basic excise duty) on tyres cleared in April 2007. Prior to 1st April, 2000, the credit of AD(GSI), all inputs could have been utilized only for payment of AD(GSI) on the finished products. However, with effect from 1st March, 2003, the Cenvat Credi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

had been utilized for payment of basic and special excise duty which was not permissible in view of the retrospective amendment made in the Finance Act, 2004. Since in the present case the duty payment towards AD (GSI) pertained to the period 16th March, 1995 to 7th June, 1998, the Revenue took the view that the assessee is not eligible to pay and utilize the credit for payment of excise duties other than AD(GSI). Accordingly, a show cause notice dated 29th July, 2007, was issued for recovery of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h Court of Punjab and Haryana in the case of Goodyear India Ltd. v. CCE 2006 (199) ELT 842 was misplaced. The 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ere 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 April, 2000. 16. Thereafter, in paragraph 5.3, the contentions of the assessee with regard to amendment to the Cenvat Credit Rules have been dealt with. 17. These arguments are sought to be met by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ur. Therefore, this is a fit case for complete waiver of the condition of pre-deposit. In that regard, the Tribunal found that it could justifiably place reliance on some of its larger bench decisions. The Tribunal should have indicated as to how and in what manner these decisions including that of its larger bench have a bearing on the controversy and how they would assist it in construing and interpreting the explanation which it finds below sub-rule (6) of Rule 3 of the Cenvat Credit Rules, 2 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessee places reliance on a decision of a High Court and having a bearing of the issue, then, the attempt to not only distinguishes but disregard it cannot be sustained particularly when the Appeal is yet to be heard finally. In that regard, we find that the Tribunal's following observations are ex-facie contrary to the settled canons and principles of law. Paragraph 5.7 to 5.8 of the Tribunal's order as read as under: "5.7. If we apply the ratio of the above decision to the facts .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uot;paid" should be construed as "ought to have been paid" or "contracted to be paid". Since these two decisions failed to consider the decisions of the Hon'ble Apex Court and of the Hon'ble Gujarat and Patna High Courts, they have to be considered as "per incuriam" or Stare decisis". Further, it is noted that the Goodyear case dealt with a situation where AED (GSI) was paid on 24/01/2004 and credit was taken immediately thereafter, that is, before .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at they are entitled to use the credit of AED (GSI) taken in June, 2006 as the said credit pertained to payment of duty on dipped nylon tyres cord fabrics captively consumed prior to 01/04/2000.' 18. We are of the view that the Tribunal's understanding of the principle of per incuriam or stare decisis leaves a lot to be desired. This understanding is completely and totally inaccurate and erroneous. A decision can be said to be per incuriam only when it is rendered disregarding a statutor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ood Year India Ltd. (Supra), does not take into consideration the meaning ascribed to the expression "Paid", by the Hon'ble Supreme Court of India in some other case, then, as well, there decisions are not per incuriam. A decision can be said to be per incuiram only in the above circumstances. As to what this term means has been amply clarified by the Hon'ble Supreme Court in a decision of its constitution Bench in the case of Central Board of Dawoodi Bohra Community v. State o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

iam." 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

udicial conscience.' Therefore, this is not a principle which could have been prima facie invoked and to deal with the arguments of the assessee's counsel. Further, the said argument could not have been also dealt with on the principle applied and which is to be found in paragraph 5.9 of the order passed by the Tribunal, that an assessee cannot take advantage of violation of a provision of law. It would apply after it is held that the assessee had indeed taken such advantage. We do not s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

bunal at the interlocutory or interim stage. All these observations and the entire attempt, is unsustainable in law. As we have held above in order to find out whether there is an arguable or prima facie case all that the Tribunal was called upon to consider is whether there is any point or issue which is bonafide raised and which requires an answer. If, the provisions of the Act, Cenvat Credit Rules, and the principles laid down by the Hon'ble Supreme Court and this Court were pressed into .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version