Delhi High Court
Kamkhaya Steel (P) Ltd. vs Union Of India (Uoi) And Ors. on 15 April, 2002
Equivalent citations: 2002VIAD(DELHI)599, 98(2002)DLT190, 2002(64)DRJ64, 2002(83)ECC881, 2002(143)ELT38(DEL)
Author: Dalveer Bhandari
Bench: Dalveer Bhandari, Vikramajit Sen
JUDGMENT Dalveer Bhandari, J.
1. We propose to dispose of CWP Nos. 1729, 1740, 1744-45/2002 by a common judgment. For the sake of convenience, facts of only CW 1729/02 are recapitulated. We are informed that the facts of other petitions are more or less identical
2. In this petition the petitioner has prayed that Section 3A of the Central Excise Act, 1944 empowering the Central Government to charge excise duty on the basis of capacity of production in respect of notified goods, which was inserted in the Act w.e.f. 14.5.1997 by Section 81 of the Finance Act, 1997 be deleted as unconstitutional and violative of Article 14, 19 & 265 of the Constitution of India. The petitioner has also prayed that Rule 96 ZO of the Central Excise Act, 1944 be also struck down. The petitioner has also prayed that the Induction Furnance Annual Capacity Determination Rules, 1997 be also struck down by the Central Government in exercise of the powers conferred by Sub-section (2) of Section 3A of the Act. The petitioner has further prayed that Notification No. 24/97-C. E. dated 1.8.1997 be also struck down.
3. The petitioners have prayed that Sub-rule (3) of Rule 96 Zo of the Central Excise Rules is not only ultra vires of Section 3A of the Act but also of the rules making powers of the Central Government under Section 37 of the Act. Therefore, the same be also struck down.
4. Advance copy of the writ petition was served on the respondents. Mr. Deepankar Aeron, Deputy Commissioner, Central Excise, Muzaffarnagar has filed a short counter affidavit. It is mentioned in the counter affidavit that this petition suffers from mis-statement of facts and concealment of relevant facts. In paragraph 14 of the petition it has been wrongly stated that the petitioner has not filed any other similar petition earlier. Later by supplementary affidavit dated 14.2.2002, the respondents have stated that they had filed a writ petition in the Supreme Court which was not pressed in view of the fact that such a writ petition did not lie under Article 32 of the Constitution and the proper remedy was to file a petition under Article 226 in the High Court.
5. In the counter affidavit it is also mentioned that the aforesaid statements are false to the knowledge of the petitioner. It is also mentioned that all the four petitioners before this Court were also petitioners in CW 373/2000 in the Supreme Court. That petition was disposed of by a comprehensive judgment on 15.10.2001. It is also mentioned in the writ petition before the Supreme Court that the petitioners specifically gave up the challenge to the validity of Section 3A of the Act. The challenge to Rule 96 Zo was heard and rejected on merits after relying upon the earlier judgment of the Supreme Court in Commissioner of Central Excise vs. M/s Venus Castings Pvt. Ltd. It is mentioned in the counter affidavit that the challenge to Section 3A was not pressed in order to move the High Court under Article 226 is totally false. In fact the challenge to the section was withdrawn without seeking any liberty to move the High Court for challenging the validity of Section 3A of the Act.
6. It is also mentioned in the counter affidavit that Rule 96 Zo has been challenged and this challenge has been specifically rejected and the validity of the rule has been upheld by the Supreme Court. This has been suppressed from this court.
7. Section 3A of the Act permits assessment of duty on the basis of production capacity. Section 3A(4) of the Act provides for reduction of duty in case of actual production being lower than the capacity under Section 3A(1). The rationale behind these sections has been gone into and approved by the Supreme Court in the case of Venus Castings (Supra) where it has been held as follows:
" What can be seen is that the charge under the Section is clearly on production of the goods but the measure of taxi is dependent on either actual production of goods. It cannot be said that collection of tax based on the annual furnace capacity is not relatable to the production of goods and does not carry the purpose of the Act."
8. Rule 96 Zo provides for the measure of excise duty for manufacture of alloy steel in gots and billets. Under Rule 96 Zo (1) the manufacturer has to pay Rs. 750 per metric ton of capacity of production. Alternatively the petitioners opt for the procedure under Rule 96 Zo (3) whereby a manufacturer having a total furnace capacity of 3 metric tons should he opt to pay a sum of Rs. 5 lacs per month instead of the liability under Rule 96 Zo (1), in that case he will not avail of the benefit under Section 3A(4) of the Central Excise Act. These two procedures namely under Rule 96 Zo (3) and Section 3A(4) have been held to be alternative to each other and it has been held that once a manufacturer has opted for the procedure under Rule 96 Z0 (3), he cannot avail the benefit of Section 3A (4) even if his liability under the actual production measure is less.
9. Hon'ble Supreme Court by a judgment Union Of India & Ors. vs. Supreme Steels & Gen. Mills & Ors. (delivered on 15.10.2001 by a Bench consisting of S. P. Bharucha, Hon'ble the Chief Justice, Y. K. Sabharwal, J & Brijesh Kumar, J) disposed of a number of civil appeals and writ petitions. The very first paragraph of the judgment reads as under:
" The above noted bunch of cases, comprising of civil appeals, S. L. Ps and writ petitions relate to charge of excise duty on notified goods on the basis of capacity of production, as introduced by newly added Section 3A in the Central Excise Rules has also been challenged on the ground that it is inconsistent with the provisions of the Act. In pursuance of the above noted provisions certain notifications were also issued by the Central Government, their validity is also under challenge. A number of writ petitions had been filed in the Delhi High Court as well and in some of them orders of interim relief dated 28.10.1997 had been passed giving rise to filing of the appeals by the Union of India in this Court."
10. Mr. Jayant Bhushan, the learned counsel for the UOI, submitted that undoubtedly, the validity of Section 3A of the Central Excise Act was challenged in the writ petition before the Supreme Court. During the course of hearing perhaps the challenge was not pressed. The petitioners did not seek permission of the Supreme Court to withdraw the said challenge and move a petition in the High Court. According to Mr. Bhushan,the petitioners are guilty of suppressing material facts and their petitions deserve to be dismissed in liming. He also submitted that the petitioners cannot be permitted to re-agitate the issues before this court which were involved in the similar writ petition preferred before the Supreme Court in a clandestine manner.
11. We have heard learned counsel for the parties. In Supreme Steel (supra) all the petitioners before this court were also petitioners before the Supreme Court challenging the validity of Section 3A of the Central Excise Act, 1944 and Rule 96 Zo of the Central Excise Rules. Perhaps for the reasons best known, the petitioners, during the course of hearing, have not pressed challenge to the validity of Section 3A of the Central Excise Act. Normally, when the courts are not inclined to give the desired reliefs, the petitioners at times do withdraw the challenge during the course of hearing and at times courts also grant such permission. This does not seem to be a case where the petitioners have withdraw the challenge to the said Rule in order to enable them to approach the High Court under Article 226. No such permission was granted by the Hon'ble Supreme Court. There is no doubt that the petitioners in para 14 have wrongly stated that "no similar petition has also been filed by the petitioner and the same has not been already dismissed by this Hon'ble Court". The petitioners ought to have disclosed that they had preferred a writ petition before the Supreme Court and the result thereof, particularly when all these petitioners were the petitioners before the Supreme Court and their petitions were disposed of by a detailed judgment of the Supreme Court. The courts have repeatedly held that those who approach the court must come to the court with clean hands.
12. In Rajabhai v. Vasudev reported as , their Lordships of the Supreme Court observed:
"A party who approaches the Court knowing or having reason to believe that if the true facts were brought to its notice this Court would not grant special leave, withholds that information and persuades this Court to grant leave to appeal is guilty of conduct forfeiting all claims to the exercise of discretion in his favor. It is his duty to state facts which may reasonably have a bearing on the exercise of the discretionary powers of this Court. Any attempt to withhold material information would result in revocation of the order, obtained from this Court."
13. In Har Narain v. Badri Das reported as , their Lordships of the Supreme Court observed as follows:
"It is of utmost importance that in making material statements and setting forth grounds in applications for special leave, care must be taken not to make any statements which are inaccurate, untrue or misleading."
14. In Asiatic Engineering Co. v. Achhru Ram, (Full Bench), the court observed that no relief can be granted in a writ petition which is based on mis-statement or suppression of material facts.
15. Similar principals have been laid down in English cases The King v. Williams (1914) 1 KB 608 and Rex v. Kensington Income Tax Commissioners (1917) 1 KB 486, which were considered with approval by the Supreme Court in number of judgments. Their Lordships of the Supreme Court also relied these cases in the latest judgment of the Supreme Court in Udai Chand v. Shankar Lal, . In this case the court revoked the special leave petition and vacated the stay order. The court while following the ratio of the aforementioned cases observed that "Supreme Court would be justified in revoking the leave to appeal if the same was obtained by making mis-statement of a material fact."
16. This principle has been consistently followed in number of other cases by various courts. The petitioners have not approached the court with clean hands. The petitioners were not correct in stating on oath that no similar petition has been filed by the petitioners when similar petition was in fact filed in the Supreme Court which was dismissed by a detailed judgment.
17. In view of the conduct of the petitioners, they are not entitled to any relief from this Court. These petitions deserves to be dismissed with costs and we order accordingly.