TMI Blog2019 (1) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... he only factor that is relevant. 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 - 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 the revenue before us is held to be not sustainable and the finding recorded by the learned Single Bench in that regard is affirmed. 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) 1 SCC 156; 3.Alembic Glass Industries Ltd. vs. Union of India reported in 1998 (97) ELT 28 (SC); 4.GKN Driveshafts (India) Ltd. vs. Income Tax Officer and others reported in (2003) 1 SCC 72; 5.G.K.N. Driveshafts (India) Ltd. vs. Income Tax Officer and others reported in (2002) 257 ITR 702 (Delhi); 6.Commissioner of Customs and Central Excise and others vs. Charminar Nonwovens Ltd. reported in (2004) 5 SCC 125; 7.Special Director and another vs. Mohd. Ghulam Ghouse and another reported in (2004) 3 SCC 440; and 8.Malladi Drugs and Pharma Ltd. vs. Union of India (UOI) reported in 2004 (166) ELT 153 (SC). 5.In addition, the learned Senior Central Government Standing Counsel also referred to the following decisions: 1.Devi Constructions vs. The Assistant Commissioner (ST) reported in MANU./TN/5718/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 the revenue before us is held to be not sustainable and the finding recorded by the learned Single Bench in that regard is affirmed. 8.Next we take up for consideration as to whether the learned Single Bench was justified in interfering with the show cause notice. On a reading of the impugned order, more particularly, from paragraph 20 onwards, one gets an impression that the learned Single Bench has gone into the factual thicket, examined the disputed questions of fact, made a rowing enquiry into the manufacturing process and then found that the show cause notice is not sustainable. However, on a closer reading of the impugned order, more particularly, from paragraph 20, it is evidently clear that no such exercise has been do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 not to maintain separate accounts, he will have to follow either of the two options mentioned in sub-rule (3) of Rule 6. The first option is to pay an amount equivalent to 10% of the value of the exempted goods (in respect of manufacturer of goods). The second option is to pay an amount equivalent to the CENVAT credit attributable to inputs and input services used in the manufacture of exempted goods. 33. Therefore, the sheet anchor of the case of the Respondents is that the petitioner is engaged in the manufacture of both dutiable and exempted goods and that therefore, Rule 6(3) has to be applied. According to the Respondents 1 and 2, the petitioner has not been maintaining separate accounts and hence he is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leum 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 the adhoc exemption order No.22/3/95-CX dated 24.03.1995. The need for issuing adhoc exemption order was on account of rescinding of Notification No.64/94-CE dated 01.03.1994. The adhoc exemption order pursuant to exemption from Central Excise duty on return stream polybutylene enriched liquified petroleum gas (PELPG) supplied by M/s.Madras Refineries Ltd (MRL) to the writ petitioner. After taking note of the representation, the exemption was granted and the relevant portion of the notification reads as follows: 5.KSCL has represented that they consumed only a small portion of the polybutylene enriched LPG received for the extraction of polybutene and it would be unbearable for them if the duty is to be b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 (Department of Revenue) in Circular No.39/3/2018-GST dated 25.01.2018 which was placed before us by the writ petitioner along with a memo dated 07.11.2018 clearly clarifies the position. For better appreciation, the circular is quoted herein below: Circular No. 29/3/2018-GST F.No.354/1/2018-TRU) Government of India Ministry of Finance Department of Revenue (Tax Research Unit) ***** North Block, New Delhi Dated, 25 January, 2018 To Principal Chief Commissioners/Principal Directors General, Chief Commissioners/Directors General, Principal Commissioners/Commissioners, All under CBEC. Madam/Sir, Subject: Clarification regarding applicability of GST on Polybutylene f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... net quantity of polybutylene feedstock and liquefied petroleum gas retained for the manufacture of Polyisobutylene and Propylene or Di-butyl Para Cresol; further, the Central Government has clarified that GST will be payable by the refinery only on the net quantity of Polyisobutylene feedstock and Liquefied Petroleum Gas retained by the manufacturer for the manufacture of Polyisobutylene and Propylene or Di-butyl Para Cresol; though, the refinery would be liable to pay GST on such returned quantity of Polyisobutylene feedstock and Liquefied Petroleum Gas, when the same is supplied by it to any other person. 14.Considering the above facts, we are of the clear opinion that the learned Single Bench was perfectly right in entertaining the writ petition and quashing the impugned show cause notice that it has been wholly without jurisdiction. Furthermore, the learned Single Bench rightly held that they cannot upset the apple-cart and try to come to a new conclusion, that too, after a period of nearly 24 years. Further, when the impugned show cause notice is issued against the adhoc exemption order issued by the Government of India, then it is a clear case of abuse of process of law. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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