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2015 (10) TMI 1848 - GUJARAT HIGH COURT

2015 (10) TMI 1848 - GUJARAT HIGH COURT - 2016 (332) E.L.T. 109 (Guj.) - Waiver of pre deposit - validity of interim order passed by the tribunal - tribunal granted 50% stay - none of the orders are reasoned orders assigning any reasons for asking the petitioner to pre-deposit 50% of the customs duty - Benefit of CVD - Held that:- All that is stated in the orders dismissing the applications for modification is that the Tribunal does not find any merit in the applications; however, the merits of .....

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o modify its order.

Merely because the petitioner is more vigilant about its right is no reason to non-suit the petitioner on the ground that other similarly situated assessees have not thought it fit to move applications for modification of the order of pre-deposit. When the petitioner has moved an application for modification before the Tribunal and has made out a case of changed circumstances and there is a convention to grant complete waiver of pre-deposit when the matter is refer .....

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his court would remand the matter to the Tribunal for deciding the matter afresh, however, considering the fact that in the case of similarly situated assessees, the Tribunal has already granted complete waiver of pre-deposit and it is a convention to grant waiver of pre-deposit in case the matter is referred to the Larger Bench, no fruitful purpose would be served in remanding the matters to the Tribunal. - Stay granted. - SPECIAL CIVIL APPLICATION NO. 2957 of 2015 And 4210 of 2015 - Dated:- 24 .....

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or the parties were heard at length, the matter was heard finally at the admission stage itself. 2. For the sake of convenience, reference is made to the facts as appear in Special Civil Application No.2957 of 2015. The petitioner is a limited company engaged in the manufacture of dyes and chemicals in its factories in Sachin and Pandesara of Surat district. The petitioner company imported two consignments each, of Indonesian steam coal for use in its Sachin factory and Pandesara factory respect .....

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of ₹ 52,71,719/- in respect of Unit-I and ₹ 56,46,961/- in respect of Unit-2 with interest, by reclassifying imported coal as bituminous coal. Penalties of ₹ 8,00,000/- and ₹ 8,50,000/- respectively, also came to be imposed on the two factories. Against the two orders-inoriginal, the petitioner company preferred two appeals with stay applications before the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad (hereinafter referred to as the Appellate Tribunal ). .....

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11.2014. Thereafter, the petitioner moved a modification application dated 26.11.2014 on the ground that in view of a difference in opinion on the classification issue of steam coal as bituminous coal, the CESTAT (Chennai Bench) had referred the matter to a larger Bench. That the Mumbai Bench of the CESTAT has extended the benefit of concessional CVD for coal imported from Indonesia as well as the benefit of limitation while ordering pre-deposit in identical matters. In view of divergent views e .....

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unsel for some time for compliance of the said orders. Four weeks time came to be granted for reporting compliance by 1.1.2015. It appears that on 8.12.2014, a Bench of the Appellate Tribunal in the case of a similarly situated assessee, M/s. Rainbow Papers Ltd. waived the pre-deposit of the duty along with interest and penalties till the disposal of the appeal as the issue as to whether noncoking coals imported by the applicant declared as steam coal would be classified as bituminous coal had b .....

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it in the applications filed by the petitioner and that on the earlier occasion, the learned counsel sought time for compliance of stay orders and, accordingly, did not find any reason to entertain the modification applications at that stage and dismissed the appeals for non-compliance of the said orders. The modification applications filed by the petitioner also came to be dismissed. 3. Mr. S. S. Iyer, learned counsel for the petitioner invited the attention of the court to the order dated 8.12 .....

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milar relief. 3.1 In support of his submissions, the learned counsel placed reliance upon the decision of the Bombay High Court in the case of Union of India v. Sir Hurkisondas Norottam Hospital & Medical Research Centre, 2009 (234) ELT 426 (Bom.), wherein the court, after referring to its earlier decision in the case of Baron International Ltd. v. Union of India, 2004 (163) E.L.T. 150 (Bom.) as well as the decision of the Supreme Court in the case of Commissioner of Central Excise, Vadodara .....

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r show that while granting limited powers to rectify the order on the ground of mistake apparent on the face of record, one of the shades of power to review appears to have been conceded by the legislature in favour of the Tribunal so as to enable the Tribunal to rectify its mistake or error and to modify its order. Tribunal cannot review its order but can always modify. 3.2 Reliance was placed upon the decision of the Bombay High Court in the case of Sarla Performance Fibers Ltd. v. Union of In .....

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pre-deposit according to law. 3.3 Reference was also made to the decision of the Supreme Court in the case of Union of India v. West Coast Paper Mills Ltd., 2004 (164) ELT 375 (SC), for the proposition that once a special leave is granted and the appeal is admitted the correctness or otherwise of the judgment of the Tribunal becomes wide open. In such an appeal, the court is entitled to go into both questions of fact as well as law. In such an event the correctness of the judgment is in jeopard .....

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er the Central Excise Act, which gives power to the Commissioner (Appeals) to review his order. But such a power is available to the Tribunal under section 35C(2) of the Central Excise Act to rectify any mistake apparent on the record. 3.5 Reference was made to the various orders passed by the different Benches of the Tribunal, wherein it has been observed that once the issue is referred to the Larger Bench, as a convention, waiver of pre-deposit of the amount involved, needs to be allowed. It w .....

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er dated 29.9.2014 passed by the Tribunal granting stay of recovery on condition of depositing 50% of the duty. It was submitted that reliance placed by the petitioner on the interim order passed in the case of another assessee is misconceived, inasmuch as, the interim order passed by the Tribunal in another matter is not binding on the Tribunal while deciding the review/modification application. According to the learned counsel, a subsequent change in law is no ground to seek a review/ modifica .....

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to review its earlier order. Referring to the modification application made by the petitioner, it was submitted that there is no averment with regard to undue hardship. It was submitted that while asking the petitioner to deposit 50% of the amount of customs duty, the Tribunal had placed reliance upon its previous order which has subsequently been confirmed by this court in the case of Asian Natural Resources (India) Ltd. v. Commissioner of Customs, 2015 (317) ELT 233 (Guj.). It was contended t .....

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almost one year. 4.1 Reliance was placed upon the decision of the Bombay High Court in the case of Baron International Ltd. v. Union of India, 2004 (163) ELT 150 (Bom.), wherein it has been held thus: 7. The CEGAT must remember that it has no power to review its own order. No such power has been conferred on CEGAT by the legislature. In absence of such power, it cannot exercise review jurisdiction. Party before CEGAT can only seek modification of the order of CEGAT. For seeking modification, a .....

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art of its working hours. This wastage of labour and working hours can easily be saved by the CEGAT, if application moved in this behalf is prima facie, examined by CEGAT to find out whether any change in circumstances after the previous order, is shown with sufficient material in that behalf; or any other reason prima facie; exists warranting modification of the previous order on the ground which was not available when the previous order was made. It was submitted that as Tribunal does not have .....

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the petitioner, he would gain a march over other similarly situated assessees who have paid the amount of pre-deposit. It was submitted that the position would have been different if the Larger Bench had held in favour of the assessee on merits, however, as on date, except that the matter has been referred to the Larger Bench, the position is the same. It was contended that there was a conflict which is now recognized but the dispute is yet to be resolved and, therefore, qua pre-deposit it may .....

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8377; 20,00,000/-, which the court in the said order had observed was only a small fraction of the amount that the appellant was liable to pay under the order in original. It was submitted that the court after recording that the Tribunal had applied its mind to the facts of the case and had directed pre-deposit of only a small fraction of the demand, it sustained the said order. It was submitted that the facts of the said case are different from the facts of the present case, inasmuch as, in thi .....

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regards the conduct of the petitioner, it was submitted that the modification application was filed before the dismissal of the appeal and that the petitioner was duly entitled to file such application. 5.1 The learned counsel further made reference to section 129C of the Customs Act, 1962 and more particularly, sub- sections (6) and (7) thereof to submit that the provisions of the Code of Civil Procedure would be applicable to the limited extent specified therein and no more. It was contended .....

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s considered the submissions advanced by the learned counsel for the respective parties and has perused the decisions cited at the Bar. 7. The facts as noted hereinabove reveal that on the first application made by the petitioner seeking stay of the recovery under the order-in-original, the Tribunal by an order dated 29.9.2014 had directed deposit of 50% of the customs duty as confirmed by the adjudicating authority, only on the ground that in the case of similarly situated appellants such direc .....

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the ground that there was a difference of opinion on the classification issue of steam coal as bituminous coal, between two Benches of CESTAT (Chennai Bench) and the Mumbai Bench of CESTAT has extended the benefit of concessional CVD for coal imported from Indonesia as well as the benefit of limitation while ordering pre-deposit in identical matters. In view of divergent views on the issue by the other Benches, the petitioner sought modification of the earlier stay order by granting waiver of pr .....

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.2015. Before the due date for compliance of the above order, the petitioner once again moved an application for modification before the Tribunal on the ground that subsequent to the stay orders passed by the Tribunal, it has been reported that the CESTAT (Chennai Bench) has referred the matter of classification of Indonesian Coal to a Larger Bench due to difference of opinion between the CESTAT benches at Bangalore and Chennai and that the Ahmedabad Bench of the CESTAT has been subsequently ext .....

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he stay application filed by the petitioner as well as on the modification applications filed by it, what emerges is that none of the orders are reasoned orders assigning any reasons for asking the petitioner to pre-deposit 50% of the customs duty or as to why the application for modification should not be accepted. All that is stated in the orders dismissing the applications for modification is that the Tribunal does not find any merit in the applications; however, the merits of the application .....

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by this court in Asian Natural Resources (India) Ltd. v. Commissioner of Customs, (supra) reveals that the court has categorically noted that the Tribunal has considered the submissions made by the learned counsel for the respective parties at length and has thereafter come to its conclusion. The court has further noted that the Tribunal had directed payment of only a small fraction of the amount that the appellant there was liable to pay under the order in original. Thus, it cannot be said that .....

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e learned counsel for the respective parties; however, as observed by the Bombay High Court in the case of Union of India v. Sir Hurkisondas Norottam Hospital & Medical Research Centre, (supra), the Tribunal has powers to rectify its mistake or error and to modify its order. 11. At this juncture, reference may be made to the decision of this court in the case of Amar Food Products v. Union of India, 2010 (259) ELT 490 (Guj.), wherein this court was considering a case where the Tribunal had d .....

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n of the stay order dated 12.10.2006 on the ground that there was a change in circumstances, inasmuch as, on the same issue of classification, the Tribunal had referred the matter on 23.11.2006 to the Larger Bench of the Tribunal not agreeing with the decision of the Tribunal in the case of M/s. Favourite Food Products v. CCE. The Tribunal in the order impugned in the said petition had observed that since the pre-deposit has not been made, the appeal stood dismissed on 12.12.2006. Such order was .....

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on 23.11.2006, the Tribunal had itself referred the decision in the case of Favourite Food Products v. CCE (supra) to the Larger Bench. When, the Tribunal had itself directed the matter to be posted for reporting compliance on 20.12.2006, if as observed in the impugned order dated 11.1.2007, the appeal stood dismissed on 12.12.2006 for noncompliance of the directions issued vide order dated 12.10.2006, it is difficult to comprehend as to which matter was to be posted for reporting compliance on .....

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pliance of the earlier order. This was certainly a change in circumstances which at least would require the Tribunal to re-consider its earlier decision one way or the other, considering the fact that the Tribunal itself had not accepted the decision rendered in the case of Favourite Food Products v. CCE (supra) and had referred the same to the Larger Bench. In the circumstances, the Tribunal could not have dismissed the plea of the petitioner as regards change of circumstances on the ground tha .....

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smissed on 12.12.2006, as well as on the ground that there was no change in circumstances and as such the impugned orders made by the Tribunal cannot be sustained. 12. Thus, the court in the above decision has held that the Tribunal could not have dismissed the plea of the petitioner as regards change of circumstances on the ground that merely because a Division Bench has referred the decision to the Larger Bench, the same would not constitute a change in circumstances so as to warrant modifying .....

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once the issue has been referred to a Larger Bench, as a convention, waiver of pre-deposit of the amount involved needs to be allowed. In NSL Sugars v. CC, CE & ST, Guntur, the Tribunal by an order dated 5.2.2015 had waived pre-deposit of the liability of duty, interest and penalty and granted stay of all further proceedings in view of the order of reference to the Larger Bench. In Gupta Coal India Pvt. Ltd. v. Commissioner of Customs, Mumbai, the Appellate Tribunal, West Zonal Bench at Mum .....

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the Tribunal. The court noted that the Bench is also following the same view that when the matter is referred to the Larger Bench as a convention waiver of pre-deposit is granted. The Bench, accordingly, did not find any reason to deviate from such a view and allowed the application for waiver of pre-deposit and recovery thereof. Thus, from a conspectus of the above decisions of the Tribunal, it is evident that there is a convention that in case where an issue is referred to the Larger Bench as .....

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Larger Bench. Thus, despite there being a convention of waiving pre-deposit and pre-deposit having been waived in the case of a similarly situation assessee, the Tribunal without recording any reasons as to why the convention should not be followed and the order should not be modified, has simpliciter dismissed the application by a non-speaking order by stating that it did not find any merit in the application filed by the applicant. In the opinion of this court, merely because the petitioner h .....

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the respondents that if discretion is exercised on behalf of the petitioner, it would gain a march over other similarly situated assessees, who had made pre-deposit in terms of the order passed by the Tribunal. In the opinion of this court, merely because the petitioner is more vigilant about its right is no reason to non-suit the petitioner on the ground that other similarly situated assessees have not thought it fit to move applications for modification of the order of pre-deposit. When the p .....

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