TMI Blog2015 (11) TMI 1659X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to the respondents-Coal companies which is wholly owned, managed and controlled by the Central Government. Whenever such type of issues are referred to Larger Bench before the Courts and if the amount of tax is involved which is to be recovered by the Central Government companies or the Government companies by the traders, these differential excise duty is bound to be paid by the traders to the Government companies, even during pendency of the issue, before the Larger Bench so that there may not be any difficulty by the Government or for the Governmental companies for recovery of the differential sovereign dues. Otherwise, if, later on, the matter is decided against the traders or petitioners or private parties, it will be extremely difficult for the Government or by the Government Companies to recover the differential excise duty or sovereign dues. The companies, private or public, may be wound up, but, the Central Government and the instrumentalities of the Central Government will not be wound up. The amount of sovereign dues paid by the companies, public or private, is absolutely safe with the Central Government or with the Governmental companies. Keeping in mind this equi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue as defined under Section 4(3)(d) of the Central Excise Act, 1944 and, therefore, Union of India demanded differential excise duty from the respondents-Companies. The said amount has already been paid by the respondents-Companies to the Union of India and in terms of the contract between the petitioners and the respondents-Companies, they were liable to make payment of Central Excise duty. This differential excise duty has been demanded by the respondents from these petitioners and, therefore, these petitions have been preferred challenging the action of the respondents-Companies mainly on the ground that royalty is covered by the words other taxes as used in Section 4(3)(d) of the Act of 1944 and, therefore, royalty is not a part and parcel of transaction value and, therefore, no excise duty is leviable upon the royalty paid by these petitioners. 3. Counsels appearing for the petitioners have argued out their cases at length and have relied upon several decisions which are as under : - (1990) 1 SCC 12 - India Cement Limited Ors. v. State of Tamil Nadu and others ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2014, dated 1st September, 2014 [2014 (310) E.L.T. 263 (All.)], let this amount be deposited by the applicants before the respondents-Companies and when Hon ble Supreme Court finalising the issue of royalty whether it is a tax or not, proper steps for refund or otherwise can be taken as per the directions of Hon ble Supreme Court. Counsels for the respondents have relied upon the decisions rendered by the Division Bench of Hon ble Allahabad High Court in W.P. (T) No. 460 of 2014 judgment and order dated 1st September, 2014. (2) W.P. (T) No. 65 of 2013 delivered by Hon ble Chhattisgarh High Court at Bilaspur judgment and order dated 11th September, 2013. (3) a Decision rendered by the Hon ble High Court of Calcutta in W.P. (T) No. 20522(W) of 2013 and other allowed matters judgment and order dated 11th April, 2014. 6. Having heard learned counsels for both sides and looking to the facts and circumstances of the case, by virtue of the Finance Act, 2011 which is made effective from 1st March, 2011, the extraction of coal is made subject to payment of excise duty. These petitioners are the traders in coal and they purchased the coal under the Spot e-Auction Scheme 2007 . The te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of stowing excise duty can be added to the transaction value as mentioned in Section 4(3)(d) of the Act of 1944 royalty or not. 10. We are exercising powers under Article 226 of the Constitution of India. There is a contract between the parties i.e. the petitioners and the respondents-Companies. These petitioners have participated in Spot E-auction Scheme for the purchase of coal. The terms and conditions of Spot e-Auction Scheme 2007 is binding to the parties to this agreement and looking to Clause 4.4 thereof, these petitioners are bound to make payment of statutory levies, surface transportation charges, sizing/beneficiation charges taxes, cess, royalty, stowing excise duty (SED) and other charges. Thus, the contract between the parties is not a statutory contract, but, it is a contract of commercial in nature. Likewise, there is a clause for arbitration as contained in Clause 11.12 of the terms and conditions of Spot e-Auction Scheme 2007 (Annexure 1). The said Clause 11.12 reads as under : 11.12 In the event of any dispute, Bidder/Buyer is necessarily required to represent in writing to the General Manager (Sales) of the concerned coal company, who would dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not finalizing the issue of refund, because all will depend upon the direction to be given by the Hon ble Supreme Court in the aforesaid decision by the Larger Bench and will also depend upon whether the burden of the duty has been passed on the consumers or not, keeping in mind the principle of Unjust Enrichment . 13. Counsels for the petitioners in some of the petitions have also contended that there are different transactions between the petitioners and the respondents-Coal Companies and, thus, the amount recoverable under one transaction cannot be recovered by the respondents-Coal companies from the deposits made in separate and distinct contract. This contention is not accepted by this Court mainly for the reason that if the trader is the same and the respondents-Coal Company is the same, there may be more than one transactions between them. The differential excise duty payable under the Contract No. I can be recovered by the respondents-Coal companies from the amount deposited by the traders under Contract No. II. The sovereign dues cannot be kept pending. The sovereign dues have to be paid by the petitioners to the respondents-Coal Companies which is a State within ..... X X X X Extracts X X X X X X X X Extracts X X X X
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