2019 (1) TMI 499
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....s challenging the said order. 2.For the sake of convenience, the parties shall be referred to as per their rank assigned in the writ petition. 3.The writ petitioner challenged the show cause notice on the ground that it is without jurisdiction, clear abuse of process of law and therefore, the revenue should be prohibited from proceeding further with the show cause notice. Before the learned Single Bench, the revenue raised preliminary objections regarding the maintainability of the writ petition, which objection was overruled by the learned Single Bench and it was held that the writ petition would be maintainable when the show cause notice was issued without jurisdiction and it is a clear abuse of process of law. 4.Mr.Rajnish Pathiyil, learned Senior Central Government Standing Counsel appearing for the revenue reiterated the said objection which was raised before the learned Single Bench and relied upon the following decisions which were cited before the learned Single Bench, which is as follows: 1.Medopharam vs. Superintendent of Central Excise, Madras reported in 1995 (77) ELT 524 (Mad); 2.State of Madhya Pradesh and others vs. M.V.Vyavsaya and Company reported in (1197) ....
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....Article 226 of the Constitution of India to interfere with the show cause notice is extremely limited and circumscribed. Further, as rightly observed by the learned Single Bench, it is not a case of inherent lack of jurisdiction but an imposed restriction which has been elucidated in several decisions which were cited by Mr.Rajnish Pathiyil, learned SCGSC appearing for the revenue. In the decisions cited by the learned senior counsel appearing for the writ petitioner, the Court have pointed out that under which circumstances, a show cause notice can be interfered. Therefore, to that extent, Mr.Rajnish Pathiyil is correct in contending that the writ petition challenging a show cause notice should not be entertained. However, we do not agree with his submission that there is an absolute and total bar for entertaining a writ petition which has been clarified by the Hon'ble Supreme Court in several decisions and when a show cause notice is challenged as being without jurisdiction or when it is a case of abuse of process of law, this Court is well justified in exercising its jurisdiction under Article 226 of the Constitution of India. Therefore, the preliminary objection raised by t....
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....in the circumstances mentioned in sub-rule (2) of Rule 6. Sub-Rule (2) of Rule 6 obliges the manufacturer or provider of output service, who avails CENVAT Credit and who manufactures final products which are chargeable to Duty as well as exempted goods to maintain separate accounts. Subrule (2) of Rule 6 reads as follows:- "(2) Where a manufacturer or provider of output service avails of CENVAT credit in respect of any inputs or input services, and manufacturers such final products or provides such output service which are chargeable to duty or tax as well as exempted goods or services, then, the manufacturer or provider of output service shall maintain separate accounts for receipt, consumption and inventory of input and input service meant for use in the manufacture of dutiable final products or in providing output service and the quantity of input meant for use in the manufacture of exempted goods or services and take CENVAT credit only on that quantity of input or input service which is intended for use in the manufacture of dutiable goods or in providing output service on which service tax is payable." 31. But if a manufacturer of goods or provider of output service opts....
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....obutylene or Methyl Ethyl Ketone (MEK) and returned by the factory to the refinery from where such petroleum gases and other gaseous hydrocarbons are received. The notification contains an explanation which states that for the purposes of the exemption the quantity of the petroleum gases and other gaseous hydrocarbons consumed in the manufacture of polyisobutylene shall be calculated by subtracting from the quantity of the said gases received by the factory manufacturing polyisobutylene the quantity of the said gases returned by the factory to the refinery, declared as such under Rule 20 of the Central Excise Rules, 2002, which supplied the said gases. Thus, what is to be borne in mind is that the product is petroleum gases and other gaseous hydrocarbons. If we turn to the show cause notice issued, the attempt of the revenue is that the composition of the goods received by CPCL and the goods returned to CPCL are different in its chemical composition and the product is distinguishable. The revenue nowhere denies the fact that the product returned is a petroleum gas which should have been the only factor that is relevant. 10.The above finding given by us is fortified by perusing th....
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....uantity of LPG generated in such manufacture and returned by the manufacturer of MRL. 8.The refund application filed by KSCL may be considered by the Assistant Collector of Central Excise in the light of the exemption contained in this adhoc exemption order. The amount of refund as may be found admissible would be subject to the provisions of Section 11B of the Central Excises and Salt Act, 1944." 11.The Central Government clearly understood the manufacturing process and taken into consideration that the return quantity of LPG has ultimately been cleared on payment of appropriate duty by oil Companies, the Central Government is satisfied that the burden of excise duty on the returned quantity of LPG, which was originally supplied by MRL to the writ petitioner at the price for industrial use, has fallen on the writ petitioner which is much more than the excise duty applicable on the quantity of LPG actually consumed by them. The adhoc exemption order is a clear answer to the case of the appellant. 12.One subsequent event which has taken place after the GST regime is also very relevant at this point of time. The circular issued by the Government of India, Ministry of Finance (Dep....