TMI Blog2012 (1) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... tion notifications dated 25.08.2003, 21.01.2004 and 09.07.2004 under Section 5A of the Central Excise Act, 1944 read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and the Finance Act, 2001. 4. Writ Appeal No.395 of 2010 has been filed against order of learned Single Judge dated 29.06.2010 issuing further directions in the writ petition of the assessee already decided by the order dated 06.01.2010. 5. We have heard Mr. K. N. Choudhury, learned Senior Counsel appearing for the appellants, and Dr. Ashok Saraf, learned Senior Counsel, appearing for the respondents. 6. The assessee is engaged in the manufacture of tobacco products falling under Chapter 24 of the Central Excise Tariff Act, 1985. By the above notifications exemption from Central excise was granted subject to certain conditions, mainly, requiring investment to be done in the infrastructure in North Eastern States within stipulated time. It will be appropriate to reproduce the notifications in question which are as under : Relevant part of Notification No. 69/2003 CE, dated 25.08.2003 : (a) The scheme would be available only in respect of those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a period of ten years from the date on which the 'investment' was made. 21st January, 2004 Notification No. 8/2004-Central Excise In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (59 of 1957), and sub-section (3) of section 136 of the Finance Act, 2001 (14 of 2001), and in supersession of the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 69/2003-Central Excise, dated the 25th August, 2003, published in the Gazette of India, vide G.S.R. 679(E), dated the 25th August, 2003, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all goods falling under sub-heading 2401.90, 2402.00, 2404.41, 2404.49 2404.50 or 2404.99 of the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from the whole of the duties of excise, additional duties of excise leviable under the said Central Excise Tariff Act, the Additional Duties of Excise (Goods of Special Impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (B), has been made, it shall issue a certificate to this effect to the manufacturer within a period of three weeks after the expiry of the one month referred to in condition (D), which shall be produced by the manufacturer, within a period of two weeks from the date of issue of such certificate, to the jurisdictional Central Excise Officer; (F) the investment made under this notification shall not be allowed to be withdrawn before the expiry of ten years from the date on which the investment is made except in a case where the investment withdrawn is reinvested in the same manner as specified in this notification, in any one of the States mentioned in condition (A): Provided that if the investment made under this notification is withdrawn before the expiry of ten years and is not reinvested as mentioned above, the duty which is equal to the amount so withdrawn and not so reinvested shall be paid by the manufacturer on the date on which the investment is withdrawn. G.S. Karki Under Secretary to the Government of India ‖ New Delhi, dated the 9th July, 2004 Notification No. 28/04 G.S.R (E).-In exercise of the powers conferred by sub-section (1) of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es specified in condition (B) within sixty days of its withdrawal from such account. (D) the manufacturer shall,- (i) submit a quarterly statement, within sixty days from the end of the relevant quarter to a Committee, consisting the Chief Commissioner of Central Excise, Shillong, the Principal Secretary in the Department of Industry of the State concerned in which the unit is located and the Principal Secretary in the Department of Industry of the State in which the investment is being made, giving details of deposits made in and withdrawal made from, the escrow account, along with details of investment, made during the quarter; (ii) provide all details relating to the investment made in terms of condition (B), not later than one month after the expiry of the period of two years referred to in condition (C), to the said Committee; (iii) prove to the satisfaction of the said Committee that the investment has been made for the purposes specified in condition (B); (E) if the Committee referred to in condition (D) is satisfied that the investment as specified in condition (B), has been made, it shall issue a certificate to this effect to the manufacturer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, cannot be understood to be a withdrawal or operation of the Escrow Account by the respondent Company, within the meaning of the Notification No. 8/2004-CE read with the Notification No. 28/2004-CE. If the Department itself had advised the respondent Company to open a separate Escrow Account in respect of the Agartala Unit after it was informed that the amount equivalent to the duty in respect of both the Guwahati and the Agartala Units were deposited in one Escrow Account, it is axiomatic that the Department had really ordered for transfer of the amount of duty in respect of the Agartala Unit to the separate Escrow Account which was directed to be opened. 16. Coming to the transfer of the amount of ₹ 26.58 Crores from the Escrow Account No. 01000051400 to a Corporate Liquid Term Deposit Account so as to earn interest, the said transfer was made by the respondent Company unilaterally. The question, therefore, that has to be answered by the Court is whether the said transfer made to the Corporate Liquid Term Deposit Account was prohibited by the Notification No. 8/2004-CE read with the Notification No. 28/2004-CE. 17. The contention of the respondent Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or utilized by the respondent Company. In the above facts, we are of the view that the learned Tribunal was perfectly justified in coming to the conclusion that the respondent Company had substantially fulfilled and complied with the requirements of the Notification No. 8/2004-CE read with the Notification No. 28/2004-CE and that the orders passed by the learned Commissioner confirming the demand and levying penalty were unjustified. 8. After the judgment of this Court dated 05.05.2010, the assessee sought its implementation. The application for implementation of the order was rejected vide order dated 7.6.2011 with the following observations : 4.3 In that context it is seen that section 72 of the Finance Act, 2011 has provided for retrospective amendment of the Notification Nos.08/2004-CE dated 21.01.2004 as amended by Not. No.28/2004-CE dated 09.07.2004 wherein time line provided for withdrawal from the Escrow account has been made 4 years in place of 2 years from the date of deposit. AS any withdrawal has to be examined within the scope of the amended Notification, this amount of ₹ 8.70 crore transferred to C.L.T.D. account was permissible for withdrawal/inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m complete non-application of mind inasmuch as it is not the respondent No. 2, who has applied his mind to the facts of the present case and decided to forfeit the amount; rather, he merely carried out the directions given by his superior authority; whereas the law made the respondent No. 2 responsible to take a decision on this aspect consciously and after fully applying his mind. This was obviously not possible without giving a notice to the petitioners to have their say in the matter and when the respondent No. 2 has acted at the behest of his superior officer and not according to his own decision reached after applying his mind dispassionately and after taking into consideration all the relevant facts presented before him, such a decision and the action, taken on the basis of such decision, cannot be sustained. This apart, the petitioners also have considerable force in their submission that in respect of a part of the amount, which has been appropriated in the manner, as aforesaid, by the respondent No.2, the CESTAT, Kolkata, had already granted stay and the stay order was still in operation, when the 'forfeiture' was done. The respondents have not even made an attempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermission from jurisdictional Commissioner, no such order was either needed or ought to have been passed. In fact, it is not discernible from the materials on record as to why such a direction freezing the account was given, when the manufacturer has a period of two years to make 'investment' of the amount withdrawn. 11. As a consequence of the above findings WP(C) No.591 of 2008 was allowed with the following directions : WP(C) 591/2008 (i) The impugned actions taken by respondent No.2, namely, Commissioner of Central Excise, Shillong, in forfeiting the sums of ₹ 57,61,37,536/- (Rupees Fifty Seven Crore Sixty One Lac Thirty Seven Thousand Five Hundred Thirty Six only), ₹ 28,55,14,172/- (Rupees Twenty Eight Crores Fifty Five Lakhs Fourteen Thousand One hundred and Seventy Two) and ₹ 30.35.24,690/- (Rupees Thirty Crores Thirty Five Lakhs Twenty Four Thousand Six Hundred and Ninety only) from the Escrow Accounts of the petitioners maintained by the respondent Nos.3 and 4, namely, State Bank of India, New Guwahati Branch, Guwahati, and Branch Manager, State Bank of India, Main Bazaar Branch, Agartala, respectively, and the directions give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounted to review and further directions on subsequent cause of action which was not at issue. The said directions are as under : 35. By making this application, the applicant has also sought for allowing them to file fresh withdrawal applications for making, under the notification, investments of the amounts, which would be made available to them pursuant to the judgment and order, dated 06.01.2010, aforementioned. In this regard, it needs to be noted that as a result of freezing of the accounts as well as in consequence of the act of forfeiture of diverse sums of money lying in the Escrow Accounts of the petitioners-applicants, the petitioners-applicants could not make withdrawal applications for making investments. As the respondents action of freezing the money lying in the petitioner-applicants Escrow Accounts as well as the respondents Escrow Accounts, by way of forfeiture, have already been held to be illegal and have been set aside, it logically follows that the petitioners-applicants were estopped from making their withdrawal applications, because of the said illegal acts of the respondents. In such circumstances, if the fruits of the orders are to be made availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as rightly held by the impugned judgment. Since the revenue has not assailed the said finding, there is no occasion to hold back. The binding effect of the directions cannot be held to have been nullified merely because of retrospective amendment by the Finance Act, 2011. It was further submitted that a clarificatory direction could be issued by learned Single Judge even after the writ petition was decided and order dated 29.6.2010 thus was fully justified. The view taken in Brahm Datt Sharma was distinguishable on the principle laid down in subsequent judgment in K.A. Ansari and another v. Indian Airlines Limited [(2009)2 SCC 164]. 14. Thus, the question which requires determination is whether the Finance Act, 2011 has the effect of nullifying the judgments of this Court and whether order of learned Single Judge giving further directions, after decision of the writ petition, is without jurisdiction. 15. In our view, both the questions have to be answered against the Revenue and in favour of the assessee. 16. If a retrospective amendment changes the law on which a judgment is based in such a way as to create a conflict in the judgment and the changed law, the retrospecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of December, 2012. (4) Any amount lying or remaining unutilised in the escrow account (referred to in notification number G.S.R. 419(E), dated the 9th July, 2004] on or after the 31st day of December, 2012 shall stand forfeited and be appropriated to the account of the Central Government. (5) Recovery of any duty along with applicable interest which has not been paid but was liable to be paid as if the benefits under the said notifications had not been made available on account of non-issue of certificate by the Investment Appraisal Committee or on any other account, shall be made within a period of one year from the 31st day of December, 2012 and the provisions of the Central Excise Act, 1944 shall apply for such recovery. 17. It is clear from the text of the amendment that the same does not in any way conflict with the finding recorded by learned Single Judge or by Division Bench of this Court, unlike the situation which was dealt with by the Hon ble Supreme Court in R.C. Tobacco (P) Ltd. where the judgment giving benefit of exemption was in conflict with the retrospective amendment withdrawing the exemption. 18. Nothing has been pointed out on behalf of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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