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TMI Blog2018 (8) TMI 2016X X X X Extracts X X X X X X X X Extracts X X X X ..... st subsidies, and other benefits, etc. Pursuant to the policy of Govt. of India, a number of notifications were issued by the Ministry concerned, being Excise Notification Nos. 32/99 and 33/99, dated 8-7-1999 by which diverse benefits were extended to the entrepreneurs who were running their business in the north-eastern region of the country. Under the first notification, all excisable goods were exempt from duty under the Act if the goods were produced by new industrial units which commenced their commercial production on or after 24-12-1997 and were located in defined areas specified in the annexure to the notification. The said benefit was extended for a period of ten years from the date of publication of the notification or from the date of commencement of commercial productions, whichever was later. 3. The second notification exempted goods produced in specified industries located in areas outside the growth centres and procedure was prescribed before obtaining the exemption under both the notifications that the manufacturer of goods in such industrial units would have to pay excise duty and subsequently claim refund from the Excise authorities. At a later stage, notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th retrospective effect as if the Central Government had the power to amend the said notifications under sub-section (1) of Section 5A of the Central Excise Act read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-section (3) of Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), retrospectively at all material times. (3) No suit or other proceedings shall be maintained or continued in any Court, tribunal or other authority for any action taken or anything done or omitted to be done, in respect of any goods under the said notifications, and no enforcement shall be made by any Court, tribunal or other authority of any decree or order relating to such action taken or anything done or omitted to be done as if the amendments made by sub-section (1) had been in force at all material times. (4) Recovery shall be made of all amounts of duty or interest or other charges which have not been collected or, as the case may be, which have been refunded but which would have been collected or, as the case may be, which would have not been refunded if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery of the excise duties refunded or not paid. The effective period of such imposition is about eight months. The State has been deprived of revenue without any corresponding benefit. It may be that the retrospective operation may operate harshly in some cases, but that would not by itself invalidate the demand. [See : Epari Chinna Krishna Moorthy v. State of Orissa, [(1964) 7 SCR 185 : AIR 1964 SC 1581]. It needs to be emphasized that in effect the retrospective operation extended over a very short period and principles of equity must give way to express statutory provision. As was said in Story on Equity (3rd Eng.Edn.1920) p. 34 :- "Where a rule, either of the common or the statute law, is direct, and governs the case with all its circumstances, or the particular point, a Court of equity is as much bound by it as a Court of law, and can as little justify a departure from it." 9. After notifying Section 154 of the 2003 Act, which had nullified the effect of Notification No. 32/99 retrospectively annulling the effect thereof altogether, the 1st respondent herein issued a demand notice dated 3-6-2003 to the two separate units of the petitioner-company for recovery of a sum o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be served in issuance of a show cause notice and which would be a futile exercise after the law has been laid down by the Apex Court in R.C. Tobacco (P) Ltd. (supra). We consider it appropriate to quote paras 37, 39 and 45 of the judgment reported in (2015) 8 SCC 519 which reads ad infra : "37. Therefore, we are inclined to hold that there was a requirement of issuance of show cause notice by the Deputy Commissioner before passing the order of recovery, irrespective of the fact whether Section 11A of the Act is attracted in the instant case or not. 39. We are not concerned with these aspects in the present case as the issue relates to giving of notice before taking action. While emphasising that the principles of natural justice cannot be applied in straightjacket formula, the aforesaid instances are given. We have highlighted the jurisprudential basis of adhering to the principles of natural justice which are grounded on the doctrine of procedural fairness, accuracy of outcome leading to general social goals, etc. Nevertheless, there may be situations wherein for some reason - perhaps because the evidence against the individual is thought to be utterly compelling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 8-7-1999. This Notification stands nullified by Section 154 of the 2003 Act, which has been given retrospective effect. The legal consequence of the aforesaid statutory provision is that the amount with which the appellant was benefited under the aforesaid Notification becomes refundable. Even after the notice is issued, the appellant cannot take any plea to retain the said amount on any ground whatsoever as it is bound by the dicta in R.C. Tobacco (supra). Likewise, even the officer who passed the order has no choice but to follow the dicta in R.C. Tobacco (supra). It is important to note that as far as quantification of the amount is concerned, it is not disputed at all. In such a situation, issuance of notice would be an empty formality and we are of the firm opinion that the case stands covered by "useless formality theory". 48. Therefore, on the facts of this case, we are of the opinion that non-issuance of notice before sending communication dated 3-6-2003 has not resulted in any prejudice to the appellant and it may not be feasible to direct the respondents to take fresh action after issuing notice as that would be a mere formality." 14. Thus, other judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to pass a detailed order after affording opportunity of hearing the petitioner. 16. It further reveals from the record that in compliance of the interim order of this Court dated 8-12-2015 the petitioner appeared before the assessing authority on 25-4-2016 and the grievance primarily projected was that the Department has committed an error in calculation and two calculation sheets of interest due of their two Units at the time of personal hearing was furnished and the departmental calculation was based on thirty days of exemption/relief period as provided in the Act for paying interest from 14-5-2003, the date of assent of the Finance Act, 2003 by the President of India dated 12-6-2003 (both days inclusive) i.e. the interest was calculated taking into account the day 13-6-2003 but the petitioner has calculated interest from 14-6-2003 excluding the date of assent on 14-5-2003 and we consider it appropriate to quote the grievance which was raised by the petitioner in computing the component of interest due and noticed by the Assistant Commissioner in its order dated 19-5-2016 which was passed after affording opportunity of hearing to the petitioner after finalization of quan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rincipal amount during a long span of period from 2007 to 2012 i.e. long after the last due date of payment 13-6-2003. Hence, there were one, two or three leap year viz. 2004, 2008 & 2012 in the intervening paying period of principal amount. In the Departmental calculation, the number of days in a leap year was counted as 366 days whereas the assessee has taken all the years as 365 days. Hence, there is a difference of 1, 2 or 3 days against each day of payment. Further, an amount of Rs. 63,05,760/- was recovered by adjustment from the Escrow account of the assessee vide order dated 27-12-2007 issued by the Commissioner of Central Excise, Shillong. The assessee has taken the date of payment as 27-12-2007 i.e. date of order, whereas the Department has taken the date of payment as 29-12-2007. Thus, differences, so arises between Departmental calculate Sl. No. Assessee Dept. calculation (In Rs.) Assessees Calculation (In Rs.) Difference (In Rs.) 1. M/s. DSL Unit I 16,38,11,349.00 16,36,03,934.97 2,07,414.03 Rounding off 16,38,11,349.00 16,36,03,935.00 2,07,414.00 2. M/s. DSL Unit II 2,60,10,054.00 2,59,79,768.39 30,285.61 Rounding off 2,60,10,054.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objections dated 28-6-2017 that the liability of interest needs to be computed from thirty days after the correct computation has been informed to the petitioner and this has first happened in September, 2015 during pendency of writ petition by the present notice and for affording opportunity to present their case in person for the reason that the interest is required to be recalculated from applicable date. 19. Both the two objections were primarily rejected/repelled by the Apex Court after affirming the demand notice dated 6-6-2003 and so also the fact that in the instant case the petitioner was not required to be served with the show cause notice before the demand being raised and compliance of natural justice in the facts of the instant case would be an empty formality as observed by the Apex Court, obviously have no leg to stand, and accordingly, the Assistant Commissioner dealing with the objections further issued a demand notice on 20-6-2017 followed by 14-9-2017 to make the payment of interest of Unit-I and Unit- II in terms of the provisions under Section 154(4) of the Finance Act, 2003 which has been impugned by the petitioner in the instant proceedings. 20. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of the Apex Court and what being raised is no more res integra and open for scrutiny. 23. It has been further urged by the counsel for the respondents that the petitioner is liable to pay principal amount with interest under Section 154 of the 2003 Act of which demand was raised on 3-6-2003 but the petitioner paid the principal amount in installments but did not pay the interest but after the Apex Court has made it clear that the interest under Section 154(4) of the Finance Act, 2003 is payable by the assessee the present litigation which has been initiated at the instance of the petitioner is a futile litigation and deserves outright rejection. 24. Counsel for the respondents further submits that as and when the demand notices have been issued intimating the petitioner to pay the interest in terms of Section 154(4) of the Act, 2003 twice have approached this Court by filing writ petitions and by an interim order passed at one stage opportunity of hearing was also afforded and interest was recalculated as prayed for by the petitioner and nothing remained thereafter which would come to the rescue of the petitioner and the relief which the petitioner is seeking i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the demand raised has never been questioned by the petitioner and it was neither disputed before the Apex Court as observed in para 46 nor before us and after being settled that issuance of show cause notice in the given facts and circumstances of the present case of the petitioner would be an empty formality and no useful purpose is going to be served and once the demand notice dated 3-6-2003 has been upheld by the Apex Court further demand notice issued to the petitioner is only an intimation apprising of the demand which has not been paid for one or the other reason and at least not open for the petitioner to question the intimation which has been made to him to pay the demand after it has been upheld by the Apex Court. 27. It may be further noticed that when the notices were issued by the assessing authority to deposit the outstanding interest in terms of Section 154(4) of the 2003 Act vide notice dated 30-9-2015 the petitioner submitted their objections and after affording opportunity of hearing in terms of the interim order of this Court dated 8-12-2015 the authorized representative of the petitioner appeared before the assessing authority on 25-4-2016 and the only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason that after the constitutional validity of Section 154 of the Act, 2003 has been upheld by the Apex Court, being clear and self explicit in terms that recovery of all amounts of duty or interest or other charges under the section has to be made within a period of thirty days from the date of interest or other charges which have not been collected for one time refunded would have to be collected if the provisions of this section had been in force at all material times, within a period of thirty days from the day on which the Finance Bill, 2003 receives the assent of the President and in the event of non-payment of duty or interest or other charges so recoverable, interest has been mandated to be charged at the rate of fifteen per cent per annum payable from the date immediately after the expiry of the said period of thirty days till the date of payment under the mandate of law as being referred to under Section 154(4) of the Finance Act, 2003 leaving no discretion with the assessing authority to charge interest at the rate of fifteen per cent per annum, payable immediately after the expiry of the said period of thirty days till the date of payment and after being considered in ..... 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