TMI Blog2016 (7) TMI 1342X X X X Extracts X X X X X X X X Extracts X X X X ..... t from either of them as the law may permit. There is nothing before us to demonstrate that any highhanded action is being resorted to by the respondents for effecting said recovery. Whether in these facts, WCL committed any wrong in paying the differential amount of Excise duty? Whether such payment binds these petitioners? If not, Whether petitioners independent of pending reference before the Nine Judges of the Hon’ble Apex Court, can still oppose its recovery from them? - Held that: - The only effort of the petitioners has been to demonstrate that pendency of that reference has no bearing and till its adjudication, the law in force needs to be enforced. This effort is apparently misconceived and they cannot succeed with such an argument, in present facts. Moreover, this contention and the plea that they cannot now recover this differential Excise duty from their purchasers or consumers, at the most indicate breach of a contractual term which in present facts, is amenable to arbitration. The understanding of a legal provision and position by the WCL, its notice dated 22/25-3-2011 in this regard, its impact in law on civil rights of parties and claims (if any) arising therefr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule in all, making it returnable forthwith, with the consent of all the parties. 2. In all these writ petitions filed under Article 226 of the Constitution of India, the challenge is identical, and relief claimed is also same. Writ Petition No. 1425 of 2013 has been accepted as a main matter representing the challenges. Learned Senior Counsel Shri M.G. Bhangde argued on behalf of petitioner therein. Senior Counsel A.S. Jaiswal advanced contentions on behalf of petitioners in Writ Petition No. 2703 of 2013. Rest of the learned counsel have adopted the same. Senior Counsel Shri S.P. Dharmadhikari has replied to the same for respondents Western Coal Fields (hereinafter referred to as WCL for short) and its holding Company M/s. Coal India Ltd. 3. The question raised is - Whether additional (differential) Central Excise duty paid by adding Royalty and Stowing Excise Duty as components for determining the transaction value defined in Section 4(3) of the Central Excise Act, 1944 by the WCL to the Excise Department of the Union of India can be recovered by it from the Petitioners? Neither the Excise department nor the Union of India are the party respondents in every matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners that these two components needed to be treated as part of coal value and called upon them to pay the excise duty accordingly from 1-3-2013. Petitioners opposed it and on 12-3-2013, wrote back that they have calculated the purchase price on bid price as per terms of E-auction Scheme, as also sale price; and any retrospective deviation therein would put them to irreparable loss. They also point out that on 12-3-2013 itself Coal India has written to WCL to keep ready, only for audit purposes, the supplementary bills raised on petitioners for such differential duty for the period from 1-3-2011 to 28-2-2013. Thus, according to them, Coal India has not asked WCL to recover it from the petitioners. 8. It is urged that the reference of an issue by the Hon ble Apex Court to its Larger Bench does not have the effect of unsettling the law of land and till a contrary view is taken by such Hon ble Larger Bench, the earlier view needs to be honoured and acted upon. Support is being taken from judgment of Hon ble Supreme Court in case of Ashok Sadarangani v. Union of India [(2012) 11 SCC 321] and the Division Bench judgment of this Court at Nagpur dated 5-5-2009 in W.P. 413 of 2008 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attisgarh High Court in W.P. (T) 65 of 2013, dated 11-9-2013 - M/s. Hind Energy Coal Beneficiation (India) Ltd. v. South Eastern Coal Fields Ltd. are also pointed out to support the prayer to dismiss these writ petitions. 11. Shri Bhangde, learned Senior Counsel, in reply submits that the legal principle that reference to the Larger Bench of Hon ble Apex Court does not alter the settled law which needs to be enforced till such adjudication by the Larger Bench, was not required to be looked into by the Allahabad or the Jharkhand or the Chhattisgarh High Court. Similarly, point regarding the non-permissibility of extra-legal coercive recovery did not fall for consideration there. 12. The learned Single Judge of Chhattisgarh High Court after taking note of contention that the contract is not statutory one, recovery was of demand made by the Excise Department and that an arbitration clause was available, did not find it proper to grant any interim orders to the petitioners before that High Court. Said petitioners were given time of three months to deposit and it was subjected to outcome of the writ petition. 13. The Division Bench of Jharkhand High Court has considered the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia Ltd. Ors. (supra) about nature of royalty and of question whether the majority view in State of West Bengal v. Kesoram Industries Ltd. Ors. (supra) runs counter to view of Hon ble 7 Judges Bench in India Cement Ltd. Ors. v. State of Tamil Nadu Ors. (supra). It then proceeds to examine whether interference in writ jurisdiction was warranted and notices that contract was a non-statutory one, the differential burden was deposited by the respondents, Clause 4.4 of the terms and conditions obliged the petitioners to shoulder the same and its Clause 11.12 provided an arbitration. It found that if Larger Bench of Hon ble Apex Court finds that these components constitute tax and cannot be recognized as part of the transaction value , remedies for refund under Section 11B of the Excise Act needed to be resorted to. Hence, while declining to entertain the writ petitions, it issued directions to the respondents to maintain separate accounts of such recoveries to facilitate working out of the equities and balancing of rights after conclusion of the proceedings before the Hon ble Apex Court. Judgment of Chhattisgarh High Court has been taken note of herein by the Allahabad High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Royalty on mineral rights is not a tax on land but a payment for the user of land. Thereafter, in next paragraph, i.e., Paragraph No. 57, the Hon ble Apex Court (Five Judges) point out that vide Paras 22 and 31, which precede Para 34 (reproduced above), the Hon ble 7 Judges Bench has held that royalty is not a tax. The Hon ble Five Judges Bench records - 57. In the first sentence the word royalty occurring in the expression royalty is a tax , is clearly an error. What the majority wished to say, and has in fact said, is cess on royalty is a tax . The correct words to be printed in the judgment should have been cess on royalty in place of royalty only. The words cess on appear to have been inadvertently or erroneously omitted while typing the text of the judgment . 17. Thus, the view of Larger Bench of Hon ble Apex Court consisting of 7 Judges as explained by its 5 Judges is not in favour of the petitioners. In this backdrop, when the Hon ble Three Judges of the Apex Court note some inconsistency between the view of Hon ble Seven Judges and Hon ble Five Judges, and therefore, find it apt to place the controversy before a still Larger Bench of Hon ble Apex Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... needs to be enforced. This effort is apparently misconceived and they cannot succeed with such an argument, in present facts. Moreover, this contention and the plea that they cannot now recover this differential Excise duty from their purchasers or consumers, at the most indicate breach of a contractual term which in present facts, is amenable to arbitration. The understanding of a legal provision and position by the WCL, its notice dated 22/25-3-2011 in this regard, its impact in law on civil rights of parties and claims (if any) arising therefrom, are all the disputes arising under the non-statutory contract and forum of arbitration is accepted therefor by the petitioners. It cannot be said that reliefs sought in these writ petitions do not emanate from the contract between the parties. For period beyond 1-3-2013, Excise duty is being paid by these petitioners accepting Royalty and Stowing Excise Duty as components of the transaction value. They have not objected to it till date. Hence, in these facts, we are not inclined to intervene in the matter that too at this stage, in our extraordinary jurisdiction. We, therefore, in present facts, conclude that judgments of Hon ble Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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