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2015 (11) TMI 321 - MADRAS HIGH COURT

2015 (11) TMI 321 - MADRAS HIGH COURT - 2016 (332) E.L.T. 289 (Mad.) - Exemption under the levy of central excise as per Notification Nos.63/95 dated 16.03.1995 - whether the petitioner is ex facie entitled to exemption under Notification Nos.63/95 dated 16.03.1995 and 4/2006 dated 01.03.2006, have been overlooked - Held that:- Petitioner was issued with a show cause notice dated 26.12.2014 by the Commissioner of Central Excise, Tirunelveli, to show cause as to why the products viz., Ilemenite, .....

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rnished as per the order passed on 10.03.2015 and sent a reminder on 05.05.2015, however all of a sudden, to their surprise, the impugned letter dated 12.05.2015 was issued informing the petitioner that it is not reasonable to call for the documents which are not cited as relied upon documents in the show cause notice, on that basis, the petitioner was asked to submit his explanation, hence, the petitioner came to this court challenging the impugned communication dated 12.05.2015 raising two iss .....

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mine from the application of the Act.

In the judgment of the ESI Court at Tirunelveli in ESIOP.No.8/2012 that the petitioner comes under the purview of the Mines Act and their activities are mining activity, hence, it is necessary for the respondents to decide the preliminary issue whether the petitioner is entitled to exemption under Notification Nos.63/95 dated 16.03.1995 and 4/2006 dated 01.03.2006 for the reason that para 17(11) of the notification states that 'mine' has meaning .....

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titioner firm are coming within the definition of 'mine'

Impugned order dated 12.05.2015 informing the petitioner that it is not reasonable to call for the documents which are not cited as relied upon documents in the show cause notice dated 26.12.2014, is partly set aside - Decided partly in favour of assessee. - W. P (MD) No. 8871 of 2015, M. P (MD)No. 1 of 2015 - Dated:- 28-10-2015 - The Honourable Mr. Justice T. Raja, J. For the Petitioner : Mr. Srinath Sridevan For the Respondent .....

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of personal hearing, submitted that the two directions given by this Court to the Assistant Commissioner of Central Excise, Tirunelveli, to furnish copies of the documents on issue wise in a separate cover and directing the same authority to consider the preliminary issue whether the petitioner is ex facie entitled to exemption under Notification Nos.63/95 dated 16.03.1995 and 4/2006 dated 01.03.2006, have been overlooked, he pleaded. 2. Adding further, he would submit that the petitioner being .....

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014 should not be classified as concentrates of Ilemenite, Zircon, Rutile, Sillimanite, leucoxene under chapter sub heading 26140020, 26151000, 26060090 and 26140090 of CETA respectively, while similarly situated persons are granted exemption. The petitioner being a mining company alone cannot be treated differently, hence, they filed W.P(MD)No.3316 of 2015 before this Court. This Court, by order dated 10.03.2015 refusing to entertain the writ petition purely on the preliminary issue that no wri .....

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e petitioner, the respondent has rejected the request of the petitioner to furnish the documents in the present impugned order dated 12.05.2015 as a result, the petitioner is not able to give effective reply. 4. He further submitted that when the petitioner has also submitted a preliminary reply raising jurisdiction requesting the respondent to consider if the Exemption Notification Nos.63/95 dated 16.03.1995 and 4/2006 dated 01.03.2006 will clearly apply to the petitioner's mine, as per the .....

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in the show cause notice and thus caused an irreparable prejudice to the petitioner. 5. Continuing his arguments, learned counsel for the petitioner would submit that when the petitioner came to this Court by filing the present writ petition challenging the impugned communication refusing to provide all the documents as per the previous order of this Court dated 10.03.2015 made in W.P(MD)No.3316 of 2015, again, this Court on 08.07.2015 directed the petitioner to appear before the Assistant Comm .....

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he direction given by this Court when the petitioner appeared before the Assistant Commissioner of Central Excise, Tirunelveli, to receive the documents and asked for the Laboratorty Analysis Reports and Test Certificates showing that the materials taken from the petitioner are analysed and found to be 'ore' or 'concentrate' and also the copy of the order passed by the Customs Department on the very same identical issue, proof of export of minerals, copies of documents which were .....

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er can explain the same properly, however, leaving that course, simply giving one bunch of invoices to the petitioner to trace out the relevant documents therein without keeping the said documents inside the bunch will not amount to compliance of the order passed by this Court. 6. Referring to paragraph 3.2. of the show cause notice, he would further submit that when comparable goods (with the same grade Ilmenite) was given, the petitioner sought for copies of the actual invoices to show that co .....

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ts and documents to be used against him are made available to him. In the absence of such copies, the concerned person cannot prepare his defence, cross examine the witnesses and pinpoint the inconsistencies with a view to show that the allegations are incredible. In support of his submission, learned counsel for the petitioner has relied on a judgment of the Apex Court in Kasinath Dikshita vs. Union of India reported in (1986) 3 SCC 229 and one another judgment of this Court in the case of Thil .....

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ned counsel would submit that the petitioner is engaged in mining of certain mineral ores but never does any processing activity on ore to convert it to concentrate. Adding further, he would submit that when all the activities carried on in the petitioner's mine are entirely exempted from the levy of central excise vide Notification No.63/95 dated 16.03.1995, it is incumbent on the part of the 1st respondent to decide first whether the petitioner is entitled to the said exemption, because on .....

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xpress Newspapers (Private) Ltd., Madras vs. The Workers and others reported in AIR 1963 SC 569 holding that jurisdiction issue must be decided first as they go to the root of the matter, however, the respondents deliberately knowing fully well that there has been a direction issued by this Court on 08.07.2015 to furnish copies of documents on issue-wise in a separate cover and also to decide the preliminary issue, have miserably failed to adhere to the aforesaid directions, therefore, the impug .....

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use notice and the interim direction given on 08.07.2015 in the present writ petition namely, to furnish copies of documents on issue-wise in a separate cover and also to decide the preliminary issue. 8. Learned counsel for the petitioner further contended that the petitioner company engaging in mining of beach sand has a number of mining leases granted by the Government of Tamil Nadu for mining the beach sand containing Ilemenite, Garnet, Rutile and Leucoxene. Since all the mining leases are wi .....

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while so, the respondent first visited the Keeraikranthattu facility and head office on 26.03.2013 and during the site visit, as requested by them, the petitioner furnished the required production details vide covering letter dated 26.03.2013. At this stage, a complaint of bribery was made against one Raja Climax, an officer of the Central Excise Department vide CSR.No.439/2013. Since the said Raja Climax is a very influential person and also one of the office bearers of the Central Excise Offi .....

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y the respondents. On noticing the same, the petitioner wrote another complaint to the higher authorities and subsequently filed Crl.O.P(MD)No.22538 of 2013 against the said Raja Climax for a direction seeking expeditious action against the 2nd respondent. The 2nd respondent in order to harass the petitioner initiated the present proceedings, therefore, the petitioner has impleaded the 2nd respondent in his personal capacity. 9. He further submitted that the petitioner is having 8 plants located .....

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ubmit that admitted position of the petitioner's plants as mines could be very well seen in the stand taken by the department in order in Original No.TVM-Ex.Cus-000-COM-10-13-14 dated 30.12.2013 making it clear that all the process carried out at such plants are fully exempted from the levy of central excise by virtue of notification No.63/95 dated 16.03.1995. Besides, all these units have the legal status of mine and received the judicial recognition in the judgment and decree of the Princi .....

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of the lease area and therefore the petitioner's mining company is fully exempted from the levy of central excise as per Notification No.63/95 dated 16.03.1995. When these facts were brought to the notice of this Court, this Court by order dated 08.07.2015 directed the respondents to furnish all the documents and also to decide the preliminary issue whether the plants of the petitioner are exempted from the abovesaid notification so as to go into the jurisdictional issue, surprisingly the re .....

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es judicata. He has further contended that originally the petitioner was issued with a show cause notice dated 26.12.2014 to show cause to the Commissioner of Central Excise why the products viz., Ilemenite, Zircon, Rutile, Sillimanite, leucoxene manufactured out of sea sand (ore) and cleared the same during the period from 01.03.2011 to 31.03.2014 should not be classified as concentrates of Ilemenite, Zircon, Rutile, Sillimanite, leucoxene under chapter sub heading 26140020, 26151000, 26060090 .....

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ant documents which are relied on in the show cause notice with a further direction to the respondent to furnish the petitioner all the documents relied on in the show cause notice. 12. Denying the allegation that Raja Climax is having close relationship with the 2nd respondent/Commissioner of Central Excise Tirunelveli, it is further submitted that the said Raja Climax being Superintendent the 2nd respondent, normally, there is a relationship between them as superior and the subordinate only, t .....

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rtment is always ready to provide the same, however, so far as the averments and the allegations in the affidavit of the petitioner are concerned, they are made without any basis. 14. Referring to the petitioner's representation dated 14.01.2015, seeking to furnish copy of Notification No.4/2006 dated 01.03.2006, he would submit that the petitioner was informed to collect the same from the cbec website, however, with regard to the representation dated 15.01.2015 requesting four documents, le .....

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are mentioned in paragraph 11 of the show cause notice from the office on any working day between 10.00 hours to 17.00 hours, however, the petitioner without visiting the office for the purpose of collecting the relied upon documents, has been making vague allegation as if the department is not giving the documents to submit the reply. 15. Referring to the representations of the petitioner dated 01.04.2015 and 05.05.2015, learned counsel for the respondents contended that the petitioner has enla .....

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sked for more documents, this is nothing but dilatory tactics to stall the adjudication proceedings initiated in the show cause notice dated 26.12.2014. 16. Continuing his arguments, he would submit that when the respondents have not mentioned anywhere in the show cause notice about the Laboratorty Analysis Reports and Test Certificates, supply of the same are unwarranted. For the aforesaid reasons, he prayed for dismissal of the writ petition. Heard the learned counsel for the parties and perus .....

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s given a representation on 20.07.2015 giving the details of the documents requested and also making out a prayer for deciding the preliminary issue. On receipt of the same, the respondent issued another letter dated 20.07.2015 which is given as under:- Today on 20.07.2015 we are ready to serve upon documents mentioned in the SCN as directed by the Hon'ble Madurai Bench of Madras High Court vide Order dated 08.07.2015 made in W.P(MD)No.8871 of 2015. However, your authorized representative Sh .....

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oner of Central Excise, Tirunelveli, to show cause as to why the products viz., Ilemenite, Zircon, Rutile, Sillimanite, leucoxene manufactured out of sea sand (ore) and cleared the same during the period from 01.03.2011 to 31.03.2014 should not be classified as concentrates of Ilemenite, Zircon, Rutile, Sillimanite, leucoxene under chapter sub heading 26140020, 26151000, 26060090 and 26140090 of CETA respectively, within 30 days from the date of receipt of the same. Challenging the said show cau .....

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nish all the relevant documents which are relied on in the show cause notice. The relevant portion is given as under:- ''7.The learned Senior Counsel appearing for the petitioner submitted that they have sought for certain documents from the respondent for issuing proper reply to the show cause notice and the said request is yet to be considered by the respondent. If any such request is made, it is needless to say that the respondent shall consider the same and furnish the relevant docum .....

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documents in the show cause notice, on that basis, the petitioner was asked to submit his explanation, hence, the petitioner came to this court challenging the impugned communication dated 12.05.2015 raising two issues that in spite of a specific direction given by this court on 10.03.2015 in W.P(MD)No.3316 of 2015 to furnish all the relevant documents which are relied on in the show cause notice, the respondent failed to furnish the same, as a result, the petitioner is neither able to give repl .....

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sh all the relied upon documents, subsequently, although part of the documents were furnished to the petitioner, some other documents were not furnished, therefore, the subsequent communication has been impugned rightly, hence, the contention of the respondents that the principles of res judicata will apply to this writ petition is wholly unfounded. Therefore, this court accepting the case of the petitioner, keeping the present writ petition pending has passed the interim order on 08.07.2015 whi .....

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ioner, Customs & Central Excise, M.P.[2006 (6) SCC 340]. 3. The Kerala Minerals and Metals Ltd., vs. The Commissioner of Central Excise [2007 9120) ECC 273]. 4. TVM-EXCUS-OOO-COM-10-13-14 Indian Rare Earth Ltd. 2. The learned counsel for the respondent would submit that unless and until the preliminary issue as well as the merits of the matter are decided, there will not be any finality. He further submitted that the respondents are willing to furnish the documents required by the petitioner .....

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issue-wise in a separate cover. In case the documents relied upon by the respondent is pointed out by the petitioner, the same may also be considered by the respondent and shall be furnished to the petitioner. The petitioner shall appear before the authority on 20.07.2015 and the authority concerned shall hand over the documents as stated supra. It is also open to the authority concerned to consider the representations of the petitioner, if there are no legal impediments. 5. Post the case on 03. .....

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ish the documents required by the petitioner. 22. In this regard, it is relevant to extract the following portion from paragraph 6 of the counter affidavit filed by the 2nd respondent which is given as under:- The main issue in this writ petition is about serving of the relied upon documents for which the department is always ready to provide the same. No enquiry can be fair and complete unless the person facing enquiry is furnished with all the requisite documents. 23. It is a well settled lega .....

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ven particulars of that before hearing, so that he can prepare his defence. Therefore, I am of the view that the respondent should comply with the order dated 08.07.2015, hence, the respondents are directed to furnish all the documents sought for in the letter dated 05.05.2015. 24. Regarding the jurisdiction of the respondent is concerned, the same is settled in Australian Foods Ltd., vs. Central Excise, Chennai-II reported in 2010 SCC 2397 Mad, holding that normally if a jurisdiction of the aut .....

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Settlement Commission, which has been established as a quasi- judicial body under the Statute, has proceeded to deal with an aspect which is completely out of its purview and jurisdiction. 19. At this juncture, we feel it apt to quote the rulings of the Honourable Supreme Court on the aspect of jurisdiction. In Arun Kumar v. Union of India [(2007) 1 SCC 732] the Honourable Apex Court has held: 74. A 'jurisdictional fact' is a fact which must exist before a court, tribunal or an authorit .....

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y erroneously assuming existence of such jurisdictional fact, no authority can confer upon itself jurisdiction which it otherwise does not possess. It was further observed: 76.The existence of jurisdictional fact is thus sine qua non or condition precedent for the exercise of power by a court of limited jurisdiction. ..... A wrong decision on 'fact in issue' or on 'adjudicatory fact' would not make the decision of the authority without jurisdiction or vulnerable provided essentia .....

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passed by the second respondent/Commission is bad in law. 25. Similarly, the Apex Court also in Management of Express Newspapers (Private) Ltd., Madras vs. The Workers and others reported in AIR 1963 SC 569 while dealing with the jurisdiction of the industrial Tribunal has categorically held that normally such questions are to be decided by the Tribunal itself in the first instance, hence, it is relevant to reproduce paragraphs 11 and 12 of the said judgement which are given as under:- 11.There .....

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if the dispute is tried by the Industrial Tribunal, at the very commencement the Industrial Tribunal will have to examine as a preliminary issue the question as to whether the dispute referred to it is an industrial dispute or not, and the decision of this question would inevitably depend upon the view which the Industrial Tribunal may take as to whether the action taken by the appellant is a closure or a lockout. The finding which the Industrial Tribunal may record on this preliminary issue wi .....

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preliminary issue is a finding on a jurisdictional fact and it is only when the jurisdictional fact is found against the appellant that the Industrial Tribunal would have jurisdiction to deal with the merits of the dispute. 26. The issue viz., whether the petitioner firm is brought under the purview of the Mines Act, has already been adjudicated by competent courts and became final:- Applying the above ratio in the present case, it has become necessary to decide the preliminary issue for the si .....

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es Act and their activities are mining activity, hence, it is necessary for the respondents to decide the preliminary issue whether the petitioner is entitled to exemption under Notification Nos.63/95 dated 16.03.1995 and 4/2006 dated 01.03.2006 for the reason that para 17(11) of the notification states that 'mine' has meaning given in Section 2(i)(j) of the Mines Act, 1952 and as per Section 2(i)(j) the word 'mine' includes not only the mine area, but also the place where sand i .....

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44/2010 dated 27.06.2012. 2) Judgment passed by the learned Chief Judicial Magistrate at Tirunelveli in C.C.No.114/2007 dated 11.12.2009. 3) Judgment passed by the learned ESI Court at Tirunelveli in ESI.OP.No.8/2012 dated 04.01.2013, wherein, it is held thus:- It is the specific contention of the petitioner that they are doing mines activities and quarrying garnet. The respondent also admitted the above activities but he said the quarry is in somewhere a remote place and in the premises they ar .....

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s defined in the Mines Act. All the above mentioned competent civil and criminal courts have consistently held that all the units of the petitioner firm are coming under the definition 'mine'. Even though in an identical facts and circumstances, the Commissioner of Central Excise at Trivandrum in its order in Original No.TVM-Ex.Cus-000-COM-10-13-14 dated 30.12.2013 has held in the case of Indian Rare Earths Ltd., vs. Commissioner of Central Excise, BBSR-I [2002 (139) ELT 352 (Tri-Kolkata .....

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