TMI Blog2021 (2) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... hat judicial pronouncements are made only stating all facts of a particular case. It has been settled in catena of decisions of the Apex Court that circumstantial flexibility, one additional or different fact may make a difference between conclusion in two cases. Disposal of cases by merely placing reliance on a decision is not desirable. Precedent should be followed only so far as it marks path of justice - The Apex Court, in the case of Haryana Financial Corporation and Another vs. Jagdamba Oil Mills [ 2002 (1) TMI 1266 - SUPREME COURT ] has held that placing reliance blindly on the judgment is not proper. Factual situation between the decided cases and the case at hand are required to be gone into. M/s. Balaji Enterprises appears to have exported 221 consignments of the goods manufactured by it during November, 2003 to September, 2004 and has claimed rebate of excise duties paid by it on the exported goods. The Central Excise authorities, after scrutinizing the rebate claims, sanctioned the same as well as paid the rebate for all the 221 exported consignments. Regular orders, sanctioning the rebate to the tune of ₹ 7,06,66,186/- (Rupees seven crore six lac sixty six t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IAL CIVIL APPLICATION NO. 10195 of 2020 - - - Dated:- 16-2-2021 - HONOURABLE MS. JUSTICE SONIA GOKANI And HONOURABLE MS. JUSTICE SANGEETA K. VISHEN MR PARESH M DAVE FOR THE PETITIONER MR DEVANG VYAS FOR THE RESPONDENT ORDER ( PER : HONOURABLE MS. JUSTICE SANGEETA K. VISHEN ) 1. With the consent of the learned advocates for the respective parties, the matter is taken up for final disposal. 2. By this petition, inter alia, under Article 226 of the Constitution of India, the petitioner has prayed to quash and set aside the Order-in-Appeal No.OCESA-SRT (APPEALS)/PS- 636/2019-20 dated 27.2.2020 with a further direction to the respondents to forthwith return and restitute ₹ 50,00,000/- deposited by the petitioner with the department. 3. Brief facts, as can be culled out from the memo of the writ petition, are as under:- 3.1 The petitioner, has been a concern solely controlled and operated by Ved Prakash Wadhwani, a citizen of India. The petitioner, at the relevant point of time, was having a factory at Udaipur in the State of Rajasthan, where parts and components of wrist watches and clocks were being manufactured. The petitioner was registered with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posing penalties on the petitioner and also its authorised signatories. Being aggrieved, the petitioner and others against whom liabilities were confirmed, preferred appeals along with stay applications before the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad (hereinafter referred to as 'the Appellate Tribunal') which, passed a common order dated 4.9.2012, inter alia, observing that, against the penalty imposed, there is a deposit of an amount of ₹ 50,00,000/-, which was enough deposit to hear and dispose of the appeal of M/s. MSN Enterprises i.e. the petitioner. The appeals were thereafter heard by the Appellate Tribunal which, after hearing all the concerned, passed an order dated 10.7.2019, whereby, the appeal filed by the petitioner was allowed and the matter was remanded to the Adjudicating Authority for fresh determination. 3.5 The petitioner thereafter, filed a detailed reply dated 30.7.2019 before the Adjudicating Authority and the Adjudicating Authority thereafter, held a personal hearing on 15.10.2019 when the petitioner and its advocate appeared and had made various submissions in support of its case. It has been averred that the case is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund would not become due merely on remand, more particularly, when the amount was paid by the petitioner on his own assessment. 4. The petitioner is aggrieved by the Order-in-Original dated 8.11.2019 as well as order dated 27.2.2020 passed by the respective authorities rejecting the claim of the petitioner mainly on the ground that the same is premature considering the fact that the proceedings before the Adjudicating Authority are still pending and has not attained finality. 5. The respondent Nos.1, 2 and 3 have filed their respective replies. The respondent No.1 in the affidavit has, inter alia, narrated the events which took place after the passing of the order dated 10.7.2019 by the Appellate Tribunal till the stage of the hearing, pending before the Adjudicating Authority. The affidavits of the other two respondents are along similar lines, i.e. narrating the facts from the year 2004, followed by the issuance of the show-cause notice, further followed by the passing of the order dated 4.9.2012 and the final order dated 10.7.2019 by the Appellate Tribunal. It has been further averred about the status of the proceedings before the concerned respondent. 6. Mr. Paresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue and retention of the amount, more particularly after the order dated 10.7.2019 of Appellate Tribunal, is without authority of law for, the petitioner has lodged its claim for refund and restitution of such amount. 6.2 It is further submitted that the Deputy Commissioner of Central Excise, Daman erroneously rejected the claim of the petitioner for refund by passing Order-in-Original dated 8.11.2019 on the ground that the payment of ₹ 50,00,000/- could not be treated as pre-deposit because, the same was deposited voluntarily, during investigation and prior to the issuance of the show-cause notice in the year 2007. The Deputy Commissioner of Central Excise, Daman committed an error in observing that the claim of the petitioner was premature because the case remanded by the Appellate Tribunal, is still to be adjudicated and cannot be said to have attained finality. The Commissioner of CGST Central Excise (Appeals), Surat who, committing similar error, rejected the claim of the petitioner along similar lines. The findings of the Commissioner of CGST Central Excise (Appeals), Surat are erroneous when he observes that the refund would not become due merely on remand of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have been deposited as pre-deposit while filing the appeal. Therefore, in light of the Circular dated 16.9.2014, the petitioner is entitled to the refund of the pre-deposit which, should have been refunded by the authorities below along with statutory interest from the date of filing of the appeal before the Appellate Tribunal. 6.6 Learned advocate for the petitioner in support of his submission as regards the refund, has placed heavy reliance on the judgment in the case of Century Metal Recycling Pvt. Ltd. vs. Union of India reported in 2009 (234) E.L.T. 234 (P H). The Hon'ble Punjab Haryana High Court has held that irrespective of the fact that the amount was deposited under coercion or voluntarily, the fact remains that unless there is assessment and demand, the amount deposited by the party concerned cannot be appropriated. Further, in absence of any exceptional justification shown for retaining the amount deposited, except saying that since the amount was deposited voluntarily, the party concerned is entitled for refund of the amount paid. 6.7 Further reliance has been placed on the judgment in the case of Concepts Global Impex vs. Union of India reported in 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislature with an intention to protect interest of Revenue. It is therefore, submitted that the term pre-deposit is a misnomer and that there is no concept of pre- deposit under the provisions of the Act. 6.9 It is therefore, submitted that in view of the well established proposition of law laid down by this Hon'ble Court as well as by other Hon'ble High Courts, across the country, the act on the part of the respondent in refusing to refund the deposit on the ground that the deposit was made voluntarily and was not a deposit for hearing the appeal before the Appellate Tribunal, is erroneous and deserves to be deprecated. 6.10 It is therefore, urged that the present petition requires to be allowed and the respondents be directed to forthwith return and restitute the amount of ₹ 50,00,000/- deposited by the petitioner in the year 2004 together with interest. 7. Per contra, Mr. Devang Vyas, learned Additional Solicitor General of India has vehemently opposed the petition. At the outset, it is submitted that during the course of investigation, the petitioner had voluntarily deposited ₹ 50,00,000/- only with a view to avoiding the amount of interest, pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sit, the petitioner cannot take recourse of the refund and both the authorities have therefore, rightly held that the payment having been made in the year 2004 under protest during the course of the investigation and before issuance of the show-cause notice in the year 2007, the same cannot be treated as pre-deposit as it was not a deposit of certain percentage of duty demanded or penalty imposed before filing of appeal as per Section 35F of the Act of 1944. 7.3 It is further submitted that it has been rightly concluded by the respondent Nos.2 and 3 that the refund claim of the amount of ₹ 50,00,000/- is to be rejected as premature on the basis that the case has been remanded by the Appellate Tribunal and that the case has still not attained finality. So far as the contents of the Circular dated 16.9.2014 are concerned, it is submitted that the Circulars are issued keeping in mind the larger interest and would govern the bona fide payments made under the routine manner. It is therefore, submitted that the Circular dated 16.9.2014 cannot be made applicable to the facts of the present case. It is submitted that the Circular dated 16.9.2014 only corroborates that pre-deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any provisions under the Act to withhold the amount, the same would be without any authority of law and would be against the spirit of Article 265 of the Constitution of India. It is further submitted that the usage of the term deposit and pre-deposit is only a misnomer. In fact, in view of the judgment of this Court in the case of Ghaziabad Ship Breakers Ltd. (supra), the said difference has been washed out and therefore, there is no distinction between the term deposit and pre-deposit . It is therefore, urged that the submissions made by the respondents may not be accepted and the petition be allowed in terms of the prayers prayed for. 9. Heard Mr. Paresh M. Dave, learned advocate assisted by Mr. Amal Dave, learned advocate for the petitioner and Mr. Devang Vyas, learned Additional Solicitor General of India on behalf of the respondents. 10. At this juncture, the judgments relied upon by the petitioner need a brief mention. In the case of Century Metal Recycling Pvt. Ltd. (supra), the Punjab Haryana High Court while allowing the claim of refund has observed in paragraph 13 to the effect that unless there is assessment and demand, the amount deposited by the party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, in all the judgments discussed herein above, it has been held that the deposit made during the course of investigation and before the issuance of the show-cause notice or for hearing of the appeal, the assessee is entitled for the refund in the event of the appeal being allowed and remanded to the Adjudicating Authority for de novo consideration. 15. It is well settled proposition of law that there is always peril in treating words of a judgment as though they are words in a legislative enactment; it is to be remembered that judicial pronouncements are made only stating all facts of a particular case. It has been settled in catena of decisions of the Apex Court that circumstantial flexibility, one additional or different fact may make a difference between conclusion in two cases. Disposal of cases by merely placing reliance on a decision is not desirable. Precedent should be followed only so far as it marks path of justice. The Apex Court, in the case of Haryana Financial Corporation and Another vs. Jagdamba Oil Mills reported in (2002) 3 SCC 496 has held that placing reliance blindly on the judgment is not proper. Factual situation between the decided cases and the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /08/2014-CX dated 16.9.2014 issued by the Government of India, Ministry of Finance, Department of Revenue (Central Board of Excise and Customs) deserves a brief mention. Paragraph 3.1 of the Circular provides that the payment made during the course of investigation or audit, prior to the date on which the appeal is filed, to the extent of 7.5% or 10%, subject to the limit of ₹ 10 crore can be considered to be a deposit made towards fulfillment of stipulation under Section 35F of the Act of 1944 or Section 129E of the Customs Act, 1962. Further, paragraph 5 deals with refund of pre-deposit . Paragraph 5.4 deals with the aspect that in the event of a remand, refund of the pre- deposit shall be payable along with interest. Therefore, the amount deposited by the petitioner having been treated by the Appellate Tribunal as enough deposit to hear and dispose of the appeal, in the normal circumstances, in view of the provisions of Circular, the respondents were obligated to refund the same together with interest. However, in view of the peculiar facts obtaining in the present case and discussed in the succeeding paragraphs, plea of the petitioner for refund cannot be acceded to. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der and his wife and daughter were the partners in the said firm. They had show the export of their finished goods i.e. wrist watches clocks, through a merchant-exporter viz., Krishna, Ahmedabad, during the period April, 03 - Sep. - 03, without the payment of CE duty, under bond. In the subsequent period, they had shown the clearances of their finished goods i.e., parts/components of wrist watches and clocks to Balaji on the payment of CE duty from their CENVAT account. For the manufacture of the said goods, it had shown the purchase of raw-materials from M/s.S.K. Times Industries, M/s. Aditya Metals, M/s. Shiv Industries etc. and had availed CENVAT credit on the basis of the invoices of such suppliers. 4.3.5.1 The instant case investigation was also conducted at the end of the purported raw-materials suppliers of MSN, Udaipur. During the course of the said investigation it was revealed that the said suppliers were not registered with the CE Department and no goods were supplied by them to MSN, Udaipur. The invoices of the said suppliers were fake and no payment of CE duty was made by the said suppliers in respect of the goods purported to have been received by MSN, thereby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilized the said irregular CENVAT credit, passed on to it by MSN, by showing fictitious manufacture of goods and export thereof through Krishna on the payment of CE duty out of the said irregular/illicit CENVAT credit. Further, the duty, for which CENVAT credit was taken, was never paid in the said entire chain and was shown only on paper. Such amounts were taken by Balaji as rebate of CE duty for the exports made through Krishna. The instant case investigations proved that no goods were received by MSN and by Balaji, no goods were manufactured by them and no goods were supplied by them to Krishna and no CE duty was paid by the suppliers of the raw-materials of MSN, Krishna got watches assembled in and around Ahmedabad from the non- duty paid components procured locally or from Rajkot and subsequently exported the said watches of inferior quality. Thus, it appears that Balaji was not entitled to any rebate of the duty which was not actually paid to the Govt. exchequer at any stage. 20. Moreover, the order, inter alia, records that the amount of rebate claim erroneously refunded has been proposed to be recovered from M/s. Balaji Enterprises, M/s. MSN Enterprises and Krishna Imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 11 AC of the CEA, 1944, if M/s. Balaji Enterprises, Gala No.105, Jaynath Industrial Estate, Survey No.53/3A, Ringanwada, Daman, pays in full the said amount of rebate claim erroneously refunded and interest determined hereinabove, as at para nos. 5.1 5.2 of this order, without 30 (thirty) days of the datew of the communication of this order, the amount of penalty liable to be paid by it under Section 11 AC ibid, w.r.t. para no.5.3, herein-before, shall be 25% thereof, which is also 25% of the said CE duty determined, subject to the further stipulation that even the latter has been paid within 30 (thirty) days of the communication of the instant order. 5.5 Besides, I impose a penalty amounting to ₹ 1,76,66,446/- (Rupees one crore seventy six lakh sixty thousand five hundred forty six only) on M/s. MSN Enterprises (noticee no.3), 95, Hiran Magri, Sector-11, Udaipur, under Section 11 AC of the CEA, 1944. I find that during the course of the instant case investigations it had paid ₹ 50,00,000/- (Rupees fifty lakh only) against the said erroneous rebate claim and hence, I order the appropriation of the same against the instant penalty imposed upon it as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty lakhs only) within a period of twelve weeks from today and report compliance on 04.12.2012. 7. In the case of M/s. MSN Enterprises, we find that against the penalty imposed, there s a deposit of an amount of ₹ 50 lakhs, which we consider as enough deposit to hear and dispose the appeals. 9. As regards the penalty imposed on Shri Venkat R. Chari, we find that it would be appropriate to direct him to deposit an amount of ₹ 7 lakhs (Rupees Seven lakhs only) within a period of twelves weeks from today and report compliance on 04.12.2012. 10. As regards the penalty imposed on Shri Jignesh R Shah, we find that the proprietor of M/s. Shree Krishna Impex Shri Vijay Punjabi was directed by us to deposit an amount of ₹ 10 lakhs and report compliance on 04.12.2012, we do not intend to direct Shri Jignesh R Shah, an employee of M/s. Fanny Impex, to make any pre-deposit in order to hear and dispose the appeal. 11. We dispose of all the Stay Petitions as indicated herein above. 22. The appeal filed by the petitioner and others came to be finally disposed of by the Appellate Tribunal vide order dated 10.7.2019. The Appellate Tribunal, while setti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and two others, however, the fact remains that the order dated 30.3.2011 of the Adjudicating Authority cannot be said to have been quashed in its entirety. Owing to the failure on the part of M/s. Balaji Enterprises in depositing the amount and consequent rejection of appeal, the order dated 30.3.2011 passed by the Adjudicating Authority, attained finality so far as M/s. Balaji Enterprises and M/s. Krishna Impex are concerned. Further, as emerges from the order, common findings have been recorded by the Adjudicating Authority of holding, M/s. Balaji Enterprises, M/s. MSN Enterprises and Krishna Impex, jointly and severally liable for taking the benefit of rebate. Therefore, it cannot be said that it is clear case of remand. Had it been a clear case of remand with the quashing of order whole hog, this Court would have perhaps considered and followed the principle laid down in the judgments discussed herein above. However, under the peculiar circumstances prevailing in the present case, the request of the petitioner claiming refund cannot be acceded to. 25. In view of the afore-mentioned discussion, the Order-in- Appeal No.OCESA-SRT (APPEALS)/PS-636/2019-20 dated 27.2.2020 does ..... X X X X Extracts X X X X X X X X Extracts X X X X
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