Karnataka High Court
M/S Shamnur Sugars Limited vs Commissioner Of Central Tax on 17 March, 2023
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
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WP No. 238 of 2018
R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 17TH DAY OF MARCH, 2023
BEFORE
THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION NO. 238 OF 2018 (T-TAR)
BETWEEN:
M/S SHAMNUR SUGARS LIMITED
DUGGAVATHI VILLAGE
HARAPANAHALLI TQ
DAVANAGERE DIST
(REPRESENTED BY SRI S S BAKKESH,
MANAGING DIRECTOR OF
M/S SHAMNUR SUGARS LTD
AGED ABOUT 52 YEARS
S/O SHRI S SHIVASHANKARAPPA.
...PETITIONER
(BY SRI.V.RAGHURAMAN, SENIOR ADVOCATE FOR
SRI. RAGHAVENDRA C R.,ADVOCATE)
AND:
1. COMMISSIONER OF CENTRAL TAX
NORTH-WEST COMMISSIONERATE
Digitally signed by 2ND FLOOR, SOUTH WING
CHANDANA B M BMTC BUS STAND COMPLEX
Location: High SHIVAJI NAGAR, BENGALUR-560 051.
Court of
Karnataka 2. JOINT COMMISSIONER OF CENTRAL TAX
NORTH-WEST COMMISSIONERATE
2ND FLOOR, SOUTH WING BMTC BUS STAND COMPLEX
SHIVAJI NAGAR, BENGALURU-560 051.
3. ASSISTANT COMMISSIONER OF CENTRAL TAX
(FORMERLY KNOWN AS ASSISTANT COMMISSINER OF CENTRAL
EXCISE). C R BUILDING,
DEVRAJ URS LAYOUT
DAVANAGERE-577 006.
...RESPONDENTS
(BY SRI.AMIT ANAND DESHPANDE, SENIOR CGSC)
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WP No. 238 of 2018
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE
CONSTITUTION OF INDIA PRAYING TO QUASH IMPUGNED SHOW CAUSE
NOTICE DTD: 30.03.2017 ISSUED BY R-3 ENCLOSED AS ANNX-A
STATEMENT OF DEMAND 20/2017 DTD 25.10.2017 IN FILE DTD 25.10.2017
ISSUED BY R-2 ENCLOSED IN ANNX-B.
THIS PETITION, COMING ON FOR FURTHER HEARING, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
The petitioner is engaged in the manufacture of sugar and molasses, falling under Chapter Sub Heading No.17011190 and 17031000 of the First Schedule to the Central Excise Tariff Act, 1985 (for short "the said Act of 1985") vide registration No.AAEFS1892AXM001. The petitioner is availing facility of Cenvat credit under the provisions of the Cenvat Credit Rules, 2004 (for short "the said Rules of 2004") during the course of crushing sugar cane, bagasse is generated, which is used to generate electricity.
2. It is contended that bagasse is an agricultural waste and cannot be considered as a manufactured product so as to attract the provisions of Rule 6 of the said Rules of 2004 is contemplated that where a manufacturer uses inputs and input services, on which Cenvat credit has been availed for manufacture of both taxable as well as exempted goods, the manufacturer is required to either -3- WP No. 238 of 2018 reverse the proportionate Cenvat credit or pay an amount equal to 6% of the value of the exempted goods. Accordingly, the show-
cause notices issued to the petitioner for various periods up to February, 2015 were dropped on the basis of the decision of the Apex Court in the case of UNION OF INDIA Vs. DSCL SUGAR LIMITED - 2015 (322) ELT 769 (SC), wherein it was held that bagasse is an agricultural waste and not a manufactured product and consequently, Rule 6 of the said Rules of 2004 was inapplicable to bagasse as well as electricity generated using bagasse by the petitioner.
3. On 01.03.2015, Rule 6 of the said Rules of 2004 was amended by inserting two explanations. Explanation No.1 provided that non-excisable goods cleared for consideration shall also be considered to be exempted goods or final products/finished goods for the purpose of explanation of the said Rule 6 referred to supra.
In pursuance of the same, the Central Board of Excise and Customs issued Circular No.1027/15/2016-CX dated 25.04.2016 clarifying that consequent to the amendment, the aforesaid Rule 6 w.e.f. 01.03.2015, bagasse would be considered as 'exempted goods'. Based on the aforesaid Circular, the respondents issued -4- WP No. 238 of 2018 show-cause notice dated 21.10.2016 to the petitioner calling upon it to pay a sum of Rs.33,48,966/- for the period October-2015 to March-2016. The petitioner having contested the show-cause notice, the Assistant Commissioner of Central Tax passed an order dated 31.03.2017 dropping the proceedings against the petitioner.
The said order having been challenged by the respondents-
Revenue before the Commissioner of Central Tax (Appeals), the said appeal was dismissed by the Appellate Authority vide Order dated 09.08.2021 and the same has attained finality and become conclusive and binding upon the petitioner and the respondents.
4. In the meanwhile, the 3rd respondent issued the impugned show-cause notice dated 30.03.2017 at Annexure-A calling upon the petitioner to pay a sum of Rs.9,53,787/- for the period from March-2015 to September-2015. So also, the 2 nd respondent issued the impugned Statement of Demand at Annexure-B dated 25.10.2017 calling upon the petitioner to pay Rs.1,01,70,199/- for the period from October-2015 to June-2017.
The said show-cause notice and statement of demand are assailed by the petitioner, who is before this Court by way of the present petition.
-5- WP No. 238 of 20185. The respondent has filed its Statement of Objections disputing and denying the various contentions and claims put forth by the petitioner and sought for dismissal of the petition. It was contended that the impugned show-cause notice and statement of demand, which were issued pursuant to the amendment to Rule 6 w.e.f. 01.03.2015 and the Circular dated 25.04.2016 are perfectly legal and proper and the same do not warrant interference by this Court in the present petition. It was also contended that the judgment of the Apex Court in DSCL Sugar's case supra, was not applicable to the facts of the present case and the said contention of the petitioner was liable to be rejected. It was therefore contended that there is no merit in the petition and that the same is liable to be dismissed.
6. The petitioner has filed its rejoinder denying and disputing the various contentions urged in the Statement of Objections and has reiterated the grounds and contentions urged in the petition and contended that the impugned Show Cause Notice and Statement of Demand deserve to be quashed.
7. Heard Sri. V. Raghuraman, learned Senior counsel appearing on behalf of Sri. C. R. Raghavendra, learned counsel for -6- WP No. 238 of 2018 the petitioner and also Sri. Amit Anand Deshpande, learned Senior CGSC for the respondents and perused the material on record.
8. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior counsel for the petitioner submits that the impugned Show cause notice and Statement of Demand were illegal, arbitrary and without jurisdiction or authority of law and contrary to the material on record including the judgment of the Apex Court in DSCL Sugar's case supra and the same were liable to be quashed. It was submitted that during the pendency of the present petition, the aforesaid Circular dated 25.04.2016 issued by the respondents pursuant to the amendment to Rule 6 of the said Rules of 2004 w.e.f. 01.03.2015 was struck down by the Division Bench of the Allahabad High Court in the case of BALARAMPUR CHINI MILLS LTD., VS. UNION OF INDIA - 2019 (368) ELT 276 (ALL), but the same was followed by the Division Bench of the Punjab and Haryana High Court in the case of INDIAN SUCROSE LIMITED VS. UNION OF INDIA - 2020 SCC ONLINE P&H 374, which in turn was confirmed by the Apex Court in SLP(C) No.1700/2021 dated 04.03.2022. In addition thereto, the said Circular dated -7- WP No. 238 of 2018 25.04.2016 which clarified that the amendment to Rule 6 of the said Rules of 2004 was applicable to bagasse was withdrawn by the Central Board of Indirect Tax and Customs vide Circular No.1084/05/2022-CX dated 07.07.2022 and accordingly, the impugned Show cause notice and statement of demand which are based on the said withdrawn Circular dated 25.04.2016 deserve to be quashed on this ground also.
Learned Senior counsel also invited my attention to the order dated 31.03.2017 passed by the respondents dropping proceedings as against the petitioner for the period from October 2015 to March, 2016 and the same having been confirmed by the appellate authority vide order dated 09.08.2021, the impugned Notice of Demand dated 25.10.2017 which also pertains to the period from October 2015 to June 2017 is impermissible and barred by the principles of res judicata and constructive res judicata and the present petition deserves to be allowed.
9. Per contra, learned counsel for the respondents -
revenue, in addition to reiterating the various contentions urged in the petition submits that there is no merit in the petition and that the same is liable to be dismissed.
-8- WP No. 238 of 201810. Before adverting to the rival contentions, it is necessary to extract Rule 6 of the CENVAT Credit Rules, 2004 (prior to 2015 amendment) which read as under:-
" [Obligation of a manufacturer or producer of final products and a provider of [output] service] .
6. (1) The CENVAT credit shall not be allowed on such quantity of [ input used in or in relation to the manufacture of exempted goods or for provision of exempted services, or input service used in or in relation to the manufacturer of exempted goods and their clearance upto the palace of removal or for provision of exempted services], except in the circumstances mentioned in sub-rule (2):
[Provided that the CENVAT credit on inputs shall not be denied to job worker referred to in rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the manufacture of goods cleared without payment of duty under the provisions of that rule]."
11. The issue / question as to whether bagasse is an agricultural waste or a manufactured product so as to attract Rule 6 came up for consideration before the Apex Court in DSCL Sugar's case supra, wherein it was held as under:-
" 1. Leave granted in all the special leave petitions. All these appeals are filed by the Revenue and the -9- WP No. 238 of 2018 question which arises for consideration is common, namely, whether Bagasse which emerges as residue/waste of sugarcane is subjected to excise duty or not. The excitability of the aforesaid residue depends on the answer to the question as to whether it is a manufactured product and falls within the definition of "manufacture" as contained in Section 2(f) of the Central Excise Act.
2. The facts in brief are as under : the respondents herein are manufacturer of sugar and molasses falling under Chapter Sub-headings 17011190 and 17031000 respectively, of the First Schedule to the Central Excise Tariff Act, 1985. In the process of manufacture of sugar, sugarcane is crushed, its juice is extracted and Bagasse emerges as residue/waste of sugarcane.
3. It is not in dispute that Bagasse is otherwise classified under Chapter Sub-heading 23032000 of the First Schedule to the Central Excise Tariff Act, 1985 and attracts nil rate of duty.
4. However, show-cause notices were issued to the respondents herein stating that Bagasse would be subject to duty under the Central Excise Act, 1944, as "other products". These show-cause notices were issued to the respondents in terms of the provision contained in Rule 6(3) of the CENVAT Credit Rules, 2004 demanding various amounts. The said show-cause notices were challenged by the respondents filing writ petitions in the High Court of Allahabad. The High Court has allowed [Balrampur Chini Mills Ltd. v. Union of India, 2012 SCC OnLine All 4519] these writ petitions holding that Bagasse being a waste
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and not a manufactured product, no duty is payable thereupon. For arriving at this conclusion, the High Court has also relied upon the judgment of this Court in Balrampur Chini Mills Ltd. [CCE v. Balrampur Chini Mills Ltd. Civil Appeal No. 2791 of 2005 sub nom CCE v. Star Paper Mills Ltd., 2010 SCC OnLine SC 60] decided on 21- 7-2010.
5. The aforesaid judgment was pronounced by this Court related to the period before 2008. In the year 2008 there was an amendment in Section 2(d) as well as in Section 2(f) of the Act which defines "excisable goods"
and "manufacture" respectively. Section 2(d) with the said amendment reads as under:
"2. (d) "excisable goods" means goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as being subject to a duty of excise and includes salt;
Explanation.--for the purposes of this clause, "goods" includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable."
6. As per the aforesaid Explanation, "goods" would now include any article, material or substance capable of being bought or sold for consideration and as such goods shall be deemed to be marketable. Thus, it introduces the deeming fiction by which certain kind of goods are treated as marketable and thus excisable.
7. However, before the aforesaid fiction is to be applied, it is necessary that the process should fall within the definition of "manufacture" as contained in Section 2(f)
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WP No. 238 of 2018of the Act. The relevant portion of amended Section 2(f) reads as under:
"2. (f) "manufacture" includes any process--
(i) incidental or ancillary to the completion of a manufactured product;
(ii) which is specified in relation to any goods in the section or Chapter Notes of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to manufacture; or
(iii) which in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer;
and the word "manufacture" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production of manufacture on his own account;"
8. The Revenue sought to cover the case under sub-clause (ii) as per which the process which is satisfied in relation to any goods in the section or Chapter Notes of the First Schedule to the Central Excise Tariff Act, 1985 would amount to "manufacture". Here again, fiction is created by including those goods as amounting to manufacture in respect of which process is specified in the section or Chapter Notes of the First Schedule.
9. In the present case it could not be pointed out as to whether any process in respect of Bagasse has been
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WP No. 238 of 2018specified either in the section or in the Chapter Notes. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of "manufacture" under Section 2(f) of the Act and in the absence of manufacture, there cannot be any excise duty.
10. Since it is not a manufacture, obviously Rule 6 of the CENVAT Rules, 2004, shall have no application as rightly held by the High Court.
Civil Appeal No. 9332 of 2013:CCE v. Saryoo Sahakari Chini Mills Ltd.
11. Since Bagasse is held not to be result of any manufacture, this appeal is also dismissed.
1. SLP (C) No. 3340 of 2013:Union of India v. Haidergarh Chini Mills
2. SLP (C) No. 3342 of 2014:Union of India v. Akbar Pur Chini Mills
3. SLP (C) No. 3344 of 2014:Union of India v. Gularia Chini Mills
4. Civil Appeal No. 2761 of 2014:Union of India v. Manakpur Chini Mills
5. Civil Appeal No. 2762 of 2014:Union of India v. Kumbi Chini Mills
6. Civil Appeal No. 2763 of 2014:Union of India v. Manakpur Chini Mills
7. SLP (C) No. 10273 of 2014:Union of India v. Upper Ganges Sugar & Ind. Ltd.
8. Civil Appeals Nos. 1231-32 of 2014.
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WP No. 238 of 201812. CENVAT credit in respect of electricity was denied only on the premise that Bagasse attracts excise duty and consequently Rule 6 of the C ENVAT Credit Rule is applicable. Since this action of the appellant is found to be erroneous, all these appeals of the Revenue also stand dismissed."
12. As can be seen from the aforesaid judgment, the Apex Court clearly held that bagasse was agricultural waste and was not a manufactured product and consequently, the provisions of Rule 6 were not applicable to bagasse; the Apex Court further held that Rule 6 was also not applicable to Electricity generated from bagasse. Under these circumstances, the Demands made by the respondents on the petitioner in relation to the periods up to February, 2015 were dropped on the basis of the said judgment of the Apex Court in DSCL Sugar's case supra.
13. By Notification bearing No.6 / 2015 - CE(NT), various provisions of the said Rules were amended including Rule 6 supra w.e.f. 01.03.2015; after amendment, Rule 6 reads as under:-
" [Obligation of a manufacturer or producer of final products and a provider of ( output) service].
6. (1) The CENVAT credit shall not be allowed on such quantity of [ input used in or in relation to the manufacture of exempted goods or for provision of
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exempted services, or input service used in or in relation to the manufacturer of exempted goods and their clearance upto the palace of removal or for provision of exempted services], except in the circumstances mentioned in sub-rule (2):
[ Provided that the CENVAT credit on inputs shall not be denied to job worker referred to in rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the manufacture of goods cleared without payment of duty under the provisions of that rule]."
Explanation 1- For the purposes of this rule, exempted goods or final products as defined in clauses (d) and (h) of rule 2 shall include non- excisable goods cleared for a consideration from the factory.
Explanation -2 Value of non- excisable goods for the purposes of this rule, shall be the invoice value and where such invoice value is not available such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Excise Act and the rules made thereunder."
14. As can be seen from the aforesaid amendment, Explanation (1) was inserted, which provided that non-excisable goods cleared for consideration shall also be considered to be exempted goods or final products/finished goods for the purpose of explanation of the said Rule 6 referred to supra. In pursuance of
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WP No. 238 of 2018the same, the Central Board of Excise and Customs issued Circular No.1027/15/2016-CX dated 25.04.2016 clarifying that consequent to the amendment the aforesaid Rule 6 w.e.f.
01.03.2015, bagasse would be considered as exempted goods.
15. The said Circular No.1027/15/2016-CX dated 25.04.2016, reads as under:
1027/15/2016-CX Bagasse, dross and skimming of aluminium, zinc, or other non- ferrous metals- Circular about their excisability withdrawn.
Circular No. 1027/15/2016-CX, dated: 25.04.2016 F.No. 96/115/2015- CX.1 Government of India Ministry of Finance ( Department of Revenue) Central Board of Excise & Customs, New Delhi Excisability of bagasse and similar other by - products or wastes arising during the course of manufactures of an excisable product has been an issue under dispute. Following Circular/instruction hae been issued from time to time on the subject: -
(a) Circular No. 904/24/2009-CX, dt: 28.10.2009(2009(243) E.L.T.(T9) ]
(b) Circular No. 941/02/2011-CX, dt: 14.02.2011 [ 2011 (264) E.L.T.(T21)] (C) Instruction F.No. 17.02.2009 -CX(pt), dated: 12.11.2014[ 2014 (309) E.L.T ( T16) ]
2. The issue came before the Hon'ble Supreme Court in case of M/s. Union of India and Ors, vs. M/s. DSCL Sugar Ltd., [2015 TIOL-240-SC CX = 2015 (332) EL.T. 769(S.C.) dated:
15.7.2015. Hon'ble Supreme Court examined the issue and reaffirmed that bagassee is not a manufactured product. The Judgment applies to both periods, before and after the insertion of explanation in Section 2 (d) of the Central Excise Act, 1944 by the Finance act, 2008. It may also be noted that Hon'ble High Court of Bombay in case of M/s. Hindalco Industries Ltd., v.
Union of India [ 2015 (315) E.L.T. 10 (Bom.] came to similar conclusion in relation to dross and skimming of aluminum, zinc or other non- ferrous metal.
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WP No. 238 of 20183. In the light of the above judgments, circulars of the Board on the subject viz, 904/24/2009-CX, dated: 28.10.2009, 941/02/2011-CX, dated: 14.02.2011 and instruction issued vide F.No. 17/02/2009-cx(Pt.), dated: 12.11.2014 have become non est and are hereby rescinded. Cases kept in Call book on the above issue may be taken out and adjudicated.
4.1. It may also be noted that rule 6 of the Cenvat, Credit Rule (CCR), 2004 was amended with effect from 1.3.2015 by inserting explanation 1 and explanation 2 in sub-rule (1) of rule 6. These explanations continue in the present rule 6 also and are reproduced below for ease of reference:-
: Explanation 1. For the purposes of this rule, exempted goods or final products as defined in clauses (d) and (h) of rule 2 shall include non-excisable goods cleared for a consideration from the factory.
Explanation 2 , - Value of non- excisable goods for the purposes of their rule, shall be the invoice value and where such invoice value is not available, such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Excise Act and the rules made thereunder."
4.2 Consequently, Bagasse, Dross and skimming of non-
ferrous metals or any such by -product or waste, which are non- excisable goods and are cleared for a consideration from the factory need to be treated like exempted goods for the purpose of reversal of credit of input and input services, in terms of rule 6 of the CENVAT Credit Rules, 2004.
5. Difficulty experienced, if any, in implementing the circular should be brought to the notice of the Board. Hindi version would follow."
16. As can be seen from the aforesaid Circular, the respondents have referred to the judgment of the Apex Court in DSCL Sugar's case supra, as well as the 2015 amendment to Rule 6 of the said Rules of 2004 for the purpose of directing the bagasse, which are non-excisable goods and are cleared for consideration from the factory need to be treated like exempted goods for the purpose of reversal of credit of input and input
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WP No. 238 of 2018services in terms of Rule 6 of the said Rules of 2004; in other words, by virtue of the said Circular, the respondents sought to overcome the judgment of the Apex Court in DSCL Sugar's case supra and invoke the 2015 amendment to Rule 6 for the purpose of making the said Rule 6 applicable to bagasse. As stated supra, pursuant to the said Circular, the respondents issued show-cause notices to various persons including the petitioner demanding payment for the period subsequent to 01.03.2015.
17. The said Circular dated 25.04.2016 was challenged before the Division Bench of the Allahabad High Court in Balarampur Chini Mill's case supra, which was disposed of on 12.04.2019, by holding as under:-
" Heard Sri. Rahul Agarwal, learned counsel for the petitioner as well as Sri. Dipak Seth, learned counsel appearing for the respondents.
2. The petitioner has approached this Court challenging the show cause notice dated 24/03/2017 issued by The Asst. Commissioner, Central Excise and Service Divisions, Faizabad as well as circular no. 1027/15/2016-CX dated 25/04/2016 issued by the Central Board of Excise and Customs thereby seeking to reverse the CENVAT credit relating to Bagasse in light of the notification dated 1.3.15 treating Bagasse as an non excisable good for the purposes of reversal
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of credit of input and input services, in terms of Rule 6 of the CENVAT Credit Rules, 2004.
3. The petitioner is manufacturer of sugar which falls under subheading no. 17011190 of the 1st schedule of Central Excise Tariff Act, 1985. The petitioner has set up its plant to manufacture sugar, which is an excisable product. During the process of Manufacture of sugar, waste in the form of Bagasse emerges, and the manufacturer cannot control the process and prevent the emergence of Bagasse.
4. The petitioner is availing credit of Central Excise Duty held on inputs, input services and capital goods as provided under CENVAT Credit Rules, 2004 for the payment of Central Excise Duty on the final product, namely sugar. That in the process of manufacture of sugar, sugar cane is crushed, its juice is extracted and "Bagasse" emerges as a residue/waste of the sugar cane which is neither a manufactured product not a final product of the sugar industry. It is further been submitted that there is a fixed proportion of raw material (sugar cane, lubricants, grease etc) that is required to manufacture a particular quantity of sugar; the petitioner cannot use lesser quantity of input/materials so as to avoid the emergence of waste in the form of Bagasse.
5. In the schedule to the Central Excise Tariff Act, 1985, in the six digit tariff, Bagasse is classified under heading 2301.00 with the description "Residue and waste from food industries, including Bagasse other ways of sugar manufacturers and oil cakes" in
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the eight digit tariff, it is classified under tariff heading 2303, 20, 000 with the description "Beet Pulp, Bagasse and other wastes of sugar manufacture"
6. Rule 6 of the CENVAT Credit Rules, 2004 provides that if CENVAT credit has been taken on inputs which are used for manufacture of dutiable and exempted final products, then this Bagasse is required to reverse proportionate credit or pay 6% amount of the value of the exempted final products. Rule 6 of the CENVAT Credit Rules, 2004, as it existed prior to 28/02/2015. In Union of India v. DSCL Sugar Ltd., (2015 (322) ELT 769) and other connected appeals the Hon'ble Supreme Court held that Bagasse is not a manufactured product but an agricultural waste and residue, which itself is not the result of any process. The Hon'ble Supreme Court further held that "since it is not a manufacture, obviously Rule 6 of the CENVAT Rules shall have no application".
7. That the Union of India, amended the CENVAT Credit Rules, 2004 w.e.f. 01/03/2015 by inserting Explanation 1 and 2 in Rule 6(1) and by means of Explanation 1 for the purposes of Clause (d) & (h) of Rule 2 by providing that exempted goods or final products shall include non-excisable goods cleared for consideration from the factory, and subsequently by means of the impugned circular dated 25/04/2016 interpreted the aforesaid amendment carried out in the CENVAT Credit Rules, 2004 and held that Bagasse is an exempted product for the purpose of reversal of CENVAT credit in terms
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WP No. 238 of 2018of Explanation 1 to Rule 6, and have thereby issued the show cause notice to the petitioner which have been challenged in the instant writ petition.
8. The main thrust of the petitioner's argument is that precondition for applicability of Rule 6(1) is that there should be "manufacture of exempted goods"
which can be clearly inferred from a bare perusal of Rule 6(1). The obligation for reversal of credit can arise only in case of manufacture of dutiable final product and manufacture of exempted products, and in case the exempted goods are not manufactured there is no substantive liability on the Bagasse for reversal of credit.
9. It has been further submitted that by means of the aforesaid amendment in Rule 6 non-excisable goods cleared for a consideration from the factory may have the effect of treating Bagasse to be an exempted good, but cannot result in Bagasse being a manufactured good, as the nature of Bagasse namely, that it is an agricultural waste or residue and not a manufactured product and therefore despite the aforesaid amendment, and also in light of the ratio laid down by the Hon'ble Supreme Court in the case of Union of India v. DSCL Sugar Ltd. (supra) remains unaffected, and therefore the petitioner cannot be saddled with the liability of reversal of CENVAT credit.
10. Sri. Deepak Seth, appearing on behalf of respondent no. 2 to 4 raised preliminary objection and submitted that the petitioner has challenged the show cause notice dated 24/03/2017, wherein he has full
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WP No. 238 of 2018opportunity to place his claim/reply before the respondents who would consider the same and pass necessary orders, and the writ petition in this regard would not be maintainable. It is further submitted that the effect of amendment in Rule 6 of the CENVAT Credit Rules 2004 is only to the effect that for the purposes of Rule 6 the exempted goods or final product as defined in the Clauses (d) & (h) of Rule 2 shall include non-excisable goods cleared for a consideration from the factory. This amendment is made vide notification number 6/2015 dated 01/03/2015, and the said notification having not been challenged by the petitioner, he is not entitled to the relief claimed for.
11. The learned counsel for the respondent further submitted that the basic purpose of issuing the circular dated 25/04/2016 has been to (i) rescind the three earlier circulars referred therein as a consequence of the decision of the Hon'ble Supreme Court in the case of Union of India v. DSCL Sugar Ltd. (supra) as well as in the case of Union of India v. Hindalco Industries, 2003 (153) E.L.T. 481 (SC) and
(ii) to clarify the effect of amendment of Rule 6 by Notification No. 6/15 dated 01/03/2015 by which Rule 6 of the Rules 2004 has been amended. It is further submitted that circular dated 25/04/2016 issued by Central Board of Excise and Customs only states that the goods which are non-excisable goods and are cleared for consideration from the factory need to be treated like the exempted goods for the purpose of
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WP No. 238 of 2018reversal of credit of input and input services, in terms of rule 6 of the CENVAT Credit Rules 2004, and lastly he submitted that it is not the intention of the respondents to treat Bagasse as a manufactured product, and this show cause notice has been issued to the petitioner on the basis of the amendments made in the rule 6 of the CENVAT Credit Rules 2004 and not on the basis of the circular dated 25/04/2016.
12. The issues arise for consideration of this Court are:--
i. Whether the writ petition challenging the show cause notice dated 24/03/2017 is maintainable in exercise of the power under Article 226 of the Constitution of India;
ii. Whether the Circular No. 1027/15/2016-CX dated 25/04/2016 issued by The Central Board of Excise and Customs, New Delhi treating Bagasse to be an exempted good for the purpose of reversal of credit of input and input services in terms of Rule 6 of the CENVAT Credit Rules, 2004 is in consonance with the amendments made in the Central Excise Act and CENVAT Credit Rules.
13. In response to the preliminary objection raised by the counsel for the respondent, the counsel for the petitioner has submitted that the show cause notice is just a formality, and the respondents are bound by the Circular dated 25/04/2016 whereby subsequent to the amendment of the CENVAT Credit Rules, 2004, Bagasse being a non-excisable goods cleared for consideration from the factory and needs to be treated
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WP No. 238 of 2018like exempted good for the purpose of reversal of credit input and input services, and therefore the respondents are bound to follow the circular of the Central Board of Excise and Customs and any argument to the contrary is bound to be rejected, and therefore the petitioner's need not be relegated to the alternative remedy.
14. In the present case by means of circular dated 25th April, 2016 The Central Board of Excise and Customs have interpreted the amendment dated 01/03/2015 of the CENVAT Credit Rules 2004 so as to treat Bagasse as an exempted good for the purpose of reversal of credit of input in terms of Rule 6 of the CENVAT Credit Rules 2004. The show cause notice has been issued by Asst. Commissioner, Central Excise, Faizabad Division, Faizabad relying on the amendment dated 01/03/2015, to the effect as to whether the petitioner was reversing CENVAT Credit Rules, 2004, related with the Bagasse and pressmud after introduction of Notification dated 01/03/2015. The Circular dated 25/04/2015 is a policy decision of the Department and the same is binding on all the authorities of the Central Board of Excise and Customs, and they were bound to follow the directives issued in the said circular.
15. We have also considered the judgement cited by the counsel for the respondent namely Union of India v. Guwahati Carbon Ltd., 2012 (278) ELT 26 (SC), Rahat Industries v. Commissioner of Central Excise, 2010 (254) ELT 385 (All), Hiran Tobacco
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WP No. 238 of 2018Factory v. Union of India, 2014 (302) ELT 58 (All.) and Union of India v. Zalcon Electronics, 2010 (255) ELT 490 (SC). All the said judgements are distinguishable on the facts inasmuch as they had approached the High Court under the writ jurisdiction after passing of the order by the competent authority without approaching the appellate authority, and in the circumstances the Hon'ble Supreme Court in the case of Union of India v. Guwahati Carbon Ltd. (supra) has held that the assessee has a remedy in the form of a right to appeal under the statute, that remedy must be exhausted first, and the High Court ought not to have interfered under Article 226 of the Constitution of India. In the Case of the Rahat Industries (supra), the Division Bench of this Court relegated the petitioner to the competent authority and directed the petitioner to submit reply to the show cause notice, and refused to interfere in the matter and exercise of writ jurisdiction under Article 226 of the Constitution of India. This case is also distinguishable as the petitioner could not indicate any reason for not approaching the competent authority, rather than approaching the High Court in the writ jurisdiction.
16. That on the other hand the Supreme Court in the case of Dhampur Sugar Mills Ltd. v. State of U.P., (2007) 8 SCC 338 the Court has considered a similar controversy and has held as under:--
"16. As to alternative remedy available to the writ petitioner, a finding has been recorded by the High Court in favour of the writ petitioner and the same has not been challenged by the State before us. Even
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otherwise, from the record, it is clear that the decision has been taken by the Government. Obviously in such cases, remedy of appeal cannot be termed as "alternative", or "equally efficacious". Once a policy decision has been taken by the Government, filing of appeal is virtually from "Caesar to Caesar's wife", an "empty formality" or "futile attempt". The High Court was, therefore, right in overruling the preliminary objection raised by the respondents."
17. In the instant case the petitioner has challenge the show cause notice which seeks to saddle it with the liability to reverse the CENVAT Credit claimed by it, in the light of the amendment in CENVAT Credit Rules dated 01/03/2015, and further elaborated by means of Circular dated 25/04/2016 which treats Bagasse as an exempted good for the purpose of reversal of credit of input in terms of rule 6 of the CENVAT Credit Rules 2004. We are inclined to agree with the argument of the petitioner, that relegating them to the competent authority to decide the issue after receiving the reply from the petitioner would be just an empty formality in as much as the argument of the petitioner that despite the amendment dated 01/03/2015 the CENVAT credit claimed by them cannot be reversed in as much as the bagasse not being a manufactured product is out of the purview of Rule 6 of the CENVAT Credit Rules 2004. We are also in full agreement with the argument that the competent authority deciding the claim of the petitioner consequent to the Show Cause Notice, would be bound by the departmental Circular dated 25/04/2016 and he would not have the liberty of
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WP No. 238 of 2018disagreeing with the circular issued by Central Board of Excise and Customs. In this view of the matter it would not be efficacious to relegate the petitioner before the competent authority and in light of the above we have no hesitation in holding that the writ petition in the present facts and circumstances of the case would be maintainable.
18. The main argument of the petitioner with regard to the challenge of the Circular dated 25/04/2016 is that despite the insertion of Explanation 1 with effect from 01/03/2015, the Legislature has not removed the basis on which the judgment of the Hon'ble Supreme Court dated 24/07/2015 was pronounced, and therefore despite the amendment treating certain non-excisable goods as exempted goods or final products, Bagasse would not be treated to be an exempted good for the purpose of reversal of credit of input in terms of Rule 6 of the CENVAT Credit Rules 2004 and still the condition of "manufacture" of the exempted good would be required.
19. Rule 6 of the CENVAT Credit Rules 2004, as it existed prior to 28.02.2015, is as follows:--
"RULE 6. [Obligation of a manufacturer or producer of final products and a [provider of output service].-
(1) The CENVAT credit shall not be allowed on such quantity of input or input service which is used in the manufacture of exempted goods or for exempted services, except in the circumstances mentioned in subclause (2) (2) Where a manufacturer or provider of output service avails of CENVAT credit in respect of any inputs or
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input services, and manufactures such final products or provides such output service which are chargeable to duty or tax as well as exempted goods or services, thyen, the manufacturer or provider of output service shall maintain separate accounts for receipt, consumption and invertory 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.
(3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow either of the following options as applicable to him, namely:--
i. the manufacturer of the goods shall pay an amount equivalent to five percent of the value of the exempted goods and the provider of output service shall pay an amount equal to six percent of the value of the exempted services; or ii. ............."
20. The union of India amended CENVAT Credit Rules, 2004 with effect from 01/03/2015 by inserting Expression 1 and 2 in Rule 6(1), which reads as under:--
"Explanation 1. - For the purposes of this rule, exempted goods or final products as defined in clauses (d) and (h) of rule 2 shall include non- excisable goods cleared for a consideration from the factory.
Explanation 2. - Value of non-excisable goods for the purposes of this rule, shall be the invoice value and where such invoice value is not available, such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Excise Act and the rules made thereunder."
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WP No. 238 of 201821. A perusal of Rule 6(1) clearly shows that the manufacturer has to manufacture dutiable goods as well as exempted goods. Since Bagasse is not manufactured good but the waste product which emerges/comes into existence in the process of manufacture of sugar, and therefore the production of Bagasse cannot be held to be manufacture of exempted good.
22. Rule 6(2) provides that where a manufacturer avails of CENVAT credit in respect of any inputs and manufacturers such final products which are chargeable to duty as well as exempted goods, the manufacturer shall maintain separate accounts for the same, and in an inventory of input meant for use in the manufacture of dutiable final product and the quantity of input meant for the use in the manufacture of exempted goods.
23. As per Rule 6(3) the manufacturer of dutiable final product and the manufacturer of exempted goods who does not maintain separate accounts shall be liable to pay an amount of 5% of the value of the manufactured goods.
24. The Hon'ble Supreme Court in the case of Union of India v. DSCL Sugar Ltd. (supra), held that Bagasse is not a manufactured product but an agricultural waste and residue, which itself is not the result of any process. It is relevant to point out that in the said judgement the Hon'ble Court also considered the amendment in Section 2(d) wherein in the definition of "excisable goods" were duly amended to
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WP No. 238 of 2018include any article or material substance capable of being bought or sold for consideration and as such could/shall be deemed to be marketable, and therefore the fiction was introduced wherein certain kinds of goods were treated to be marketable and thus excisable.
25. Considering the aforesaid amendment Hon'ble Supreme Court in Union of India v. DSCL Sugar Ltd. (supra) held:--
"However, before the aforesaid fiction is to be applied, it is necessary that the process should fall within the definition of "manufacture" as contained in section 2(f) of the Act."
26. The Hon'ble Supreme Court also considered the definition of "manufacture" as provided in Section 2(f) of the Act wherein there is a deeming provision amounting to manufacture in respect of certain goods, and specifically with regard to Bagasse and held as under:--
"in the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the section or in the chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of section 2(f) of the act and the absence of manufacture, there cannot be any Excise duty. Since it is not a manufacture, Rule 6 of the CENVAT Credit Rules 2004, shall have an application rightly held by the High Court."
27. After the aforesaid judgement which has clearly held Bagasse not to be a manufactured
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WP No. 238 of 2018product, and therefore Rule 6 of the CENVAT Credit Rules, 2004 shall have no application, Section 6(1) has been amended by inserting the 2 Explanations, which the respondent contends is sufficient to include Bagasse within the fold of Section 6, and further to justify the stand for a reversal of CENVAT Credit Rules, 2004.
28. A perusal of the Explanation 1 to Rule 6 would indicate that it provides that the exempted good and final product as defined in Clause (d) & (h) of Rule 2 shall include non-excisable goods cleared for a consideration from the factory.
29. Explanation 1, talks about the inclusion of non- excisable goods cleared for consideration from the factory within the category of exempted goods or final products while the Circular dated 25/04/2016 proceeds on the basis that Bagasse is a non- excisable good and is now to be treated like exempted good for the purpose of a reversal of input and Input service.
30. As noted by the Hon'ble Supreme Court in the case of Union of India v. DSCL Sugar Ltd. (supra) specifically in the contest of Bagasse, Rule 6 applies only when there is a manufacture of final products or of exempted products, and if there is no manufacture, Rule 6 of the CENVAT Credit Rules, 2004, has no application.
31. This amendment may have the effect of treating Bagasse to be an exempted good, but cannot result in Bagasse being manufactured good, as the
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WP No. 238 of 2018nature of Bagasse remains that of an agricultural waste and residue and is not in effect a product. This aspect and character of Bagasse remains unaltered by insertion of Explanation 1.
32. In absence of Bagasse being a manufactured final product, the obligation of a reversal of CENVAT period under Rule 6(1) of the CENVAT Credit Rules, 2004 is not attracted. It has also been noticed that Bagasse has always been an "exempted goods"
under Rule 2(d) of the CENVAT Credit Rules, 2004. It has been mentioned in Central Excise tariff heading 2303 20 000 and was subjected to NIL rate of duty. It therefore, fell within the definition of "exempted goods"
as defined under Rule 2(d) and is not a non-excisable good, as mentioned in the impugned Circular.
33. That the Circular dated 25/04/2016 interpreting Explanation 1 to Rule 6 has provided that "consequently, Bagasse, dross and skimmings of nonferrous metal or any such byproduct of waste, which are non-excisable goods and are cleared for consideration from the factory need to be treated like exempted goods for purpose of reversal of credit of input and input services, in terms of rule 6 of the CENVAT Credit Rules, 2004. The circular therefore treating Bagasse to be a non-excisable good, is clearly erroneous, and for this reason also the Circular dated 25/04/2016 is liable to be quashed with regard to Bagasse.
34. In light of the above we are of the considered opinion that in absence of Bagasse being a
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WP No. 238 of 2018manufactured final product, the obligation of reversal of CENVAT Credit under Rule (1) of the CENVAT Credit Rules, 2004 is not attracted, and the ratio laid down in the judgement of the Hon'ble Supreme Court in the case of Union of India v. DSCL Sugar Ltd. (supra) still holds the field. Rule 6 of the CENVAT Credit Rules would have no application for reversal of CENVAT Credit in relation to Bagasse. The Circular No. 1027/15/2016-CX, dated 25/04/2016, contained in Annexure - 1 to the writ petition to the extent that it includes Bagasse under the purview of the reversal of credit of input services in terms of Rule 6 of the CENVAT Credit Rules, 2004, as well as the impugned show cause notice dated 24/03/2017 contained in Annexure - 2, are hereby quashed.
35. The writ petition is accordingly allowed.
36. No order as to costs."
18. As can be seen from the aforesaid judgment, the Allahabad High Court quashed the said Circular as well as the impugned show-cause notice; while doing so, the Allahabad High Court came to the categorical conclusion that despite the 2015 amendment to Rule 6 of the said Rules of 2004, bagasse were not manufactured products, but continued to remain agricultural waste and residue and that the judgment of the Apex Court in DSCL Sugar's case supra, continued to apply and operate and govern
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WP No. 238 of 2018bagasse even after the 2015 amendment. The High Court also held that the 2015 amendment was not applicable to bagasse, since it was not a manufactured product/goods and consequently, the said Circular dated 25.04.2016 was illegal and arbitrary and contrary to law and the same was accordingly quashed.
19. Subsequently, the said judgment in Balarampur Chini Mill's case supra was followed by the Division Bench of the Punjab and Haryana High Court in the case of Indian Sucrose Limited Vs. Unin of India and Others - 2020 SCC OnLine P&H 374, wherein the quashment of the aforesaid Circular dated 25.04.2016 was noticed and the show-cause notice issued by the respondents-Revenue was set aside by holding as under:
" By this petition the petitioner has challenged the circular No. 1027/15/2016-CX, dated 25.04.2016 issued by the Central Board of Excise and Customs thereby seeking to reverse the CENVAT credit relating to Bagasse treating Bagasse as an non excisable good for the purposes of reversal of credit of input and input services, in terms of Rule 6 of the CENVAT Credit Rules, 2004.
2. At the very outset learned counsel for the petitioner states that this very circular was challenged in the Allahabad High Court and by the judgment and order dated 12.04.2019 passed in CWP (M/B) No. 9854 of 2017, titled as Balrampur Chini Mills Ltd. v. Union of India, 2019 SCC
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OnLine All 4846 set aside this circular and this judgment has been permitted to become final.
3. Mr. Sunish Bindlish, Sr. Standing Counsel has very fairly accepted this factual assertion but states that as regards the argument about the judgment having been allowed to become final he is not in a position to corroborate this fact.
4. Be that as it may. In this view of the matter and in view of the categoric statement made by the learned counsel for the petitioner, we allow this writ petition in the same terms as the above judgment with liberty to the Revenue to file an application for review in case the assertion regarding the judgment having been permitted to become final is not correct. However, it is clarified that once the circular has been set aside the show cause notice based on the impugned circular is also automatically set aside.
5. Petition stands allowed.
6. Since the main case has been decided, the pending civil miscellaneous application, if any, also stands disposed of."
20. The respondents-Revenue challenged the aforesaid order of the Punjab and Haryana High Court in M/s. Indian Sucrose's case supra before the Apex Court, which dismissed the said SLP(c) No.1700/2021 vide order dated 04.03.2022, by holding as under:
" Heard the learned counsel for the parties.
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In view of the judgment of this Court in Union of India vs. DSCL Sugar Ltd., & Ors. reported in 2015 ( 322) ELT 769 holding Bagasse to be non-excisable to which the Cenvat credit Rules had no application, the circular dated: 25.04.2016 is unsustainable in law.
The special leave petition is, therefore, dismissed.
Pending application, if any, shall stand disposed of. "
21. Subsequently, the respondents-Revenue took cognizance of the aforesaid facts and circumstances including the judgments of the Apex Court referred to supra and issued Circular No.1084/05/22 dated 07.07.2022, whereunder the earlier Circular dated 24.05.2016 was rescinded and withdrawn as under:
CBIC-110267/33/2022-CX-VIIISECTION CBSE Government of India Ministry of Finance Department of Revenue Centrao Board of Indirect Tax & Customs (CX & ST Wing) New Delhi, dated: 7th July, 2022.
To,
1. The Principal Chief Commissioner/Chief Commissioner, CGST & CX( ALL)
2. The Principal Director General/Director General ( All)
3. The Principal Commissioner/ Commissioner, CGST & CX (All)
4. [email protected] for uploading the instruction of CBIC'S website.
Madam/Sir,
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WP No. 238 of 2018Subject: Excitability of waste/residue arising during the process of manufacture- withdrawal of Circular No. 1027/15/2016-CX dated: 25.04.2016- Reg.
Excitability of bagasse and similar other by - products or waste arising during the course of manufacture of an excisable product has been brought to the attention of the Board.
2. It may be recalled that rule 6 of the CENVAT credit Rules, 2004 was amended with effect from 1.03.2015 by inserting Explanation 1 and 2 in sub rule (1) of rule 6, which provides that exempted goods or final product shall include non- excisable goods cleared for consideration from the factory.
3. Accordingly, Circular No. 1027/15/2016-CX dated: 25.04.2016 was issued highlighting that Bagasse, Dross and skimming of non- ferrous metals or any such by product or waste, which are non - excisable goods and are cleared for a consideration from the factory need to be treated like exempted goods for the purpose of reversal of credit of input and input services, in terms of rule 6 of the CENVAT Credit Rules, 2004. This circular was issued in the background of judgment of the Hon'ble Supreme Court in the case of Union of India vs. M/s. DSCL Sugar Ltd., [ 2015(322) E.L.T, 769 (S.C.) ] holding that Bagasse is only an agricultural waste and residue and it is not a result of any process which can be termed as ' manufacture'. Similar conclusion was also drawn by the Hon'ble High Court of Bombay in the case of M/s. Hindalco Industries Ltd., vs. Union of India [ 2015 (3115) E.L.T, 10 (Bom.] in relation to dross and skimming of aluminum, zinc, or other non- ferrous metals.
4. The issue again came before the Hon'ble Supreme Court in the case of Union of India vs. M/s. Indian Sucrose Limited ( SLP (C) No. 1700/2021], where in the Hon'ble Supreme Court vide its judgment dated:
04.03.2022, referred to its observations in the Union of India vs. M/s. DSCL Sugar Ltd & Ors. (supra) holding that Bagassee is non- excisable to which the CENVAT credit Rules have no application and held that the Circular dated:
25.04.2016 is unsustainable in law.
5. In light of the above judgment, Circular No. 1027/15/2016-CX dated: 25.04.2016 has become non-est and is hereby rescinded. Cases kept in Call Book on the
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WP No. 238 of 2018above issue, if any, may be taken out and adjudicated in light of the law decided by the Apex Court.
6. Difficulty experienced, if any, in implementing the circular should be brought to the notice of the Board.
7. Hindi version will follow."
22. The aforesaid facts and circumstances clearly establish that the Circular dated 25.04.2016, which was the basis on which the respondents-Revenue issued the impugned Show cause notice and the impugned Statement of Demand has been quashed and finally rescinded/revoked/withdrawn by the respondents vide Circular dated 07.07.2022, thereby leading to the inescapable conclusion that the impugned Show cause Notice and Statement of Demand at Annexures-A and B deserve to be quashed.
23. The material on record also discloses that the show cause notice dated 21.10.2016 for the period October-2015 to March-2016 issued by the respondents to the petitioner was dropped and the appeal by the respondents was dismissed by the Appellate Authority on 09.08.2021. In this context, it is relevant to state that the impugned Statement of Demand at Annexure-B dated 25.10.2017 for the period October-2015 to June-2017 includes the aforesaid period in relation to the Show cause notice dated 21.10.2016, in respect of which the demand was dropped
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WP No. 238 of 2018and the proceedings attained finality in favour of the petitioner.
Viewed from this angle also, the said order dated 09.08.2021 passed by the Appellate Authority categorically holding that the 2015 amendment to Rule 6 was not applicable to bagasse or the electricity generated from bagasse having attained finality and become conclusive and binding upon the respondents, the impugned Show cause notice and Statement of Demand in relation to the same issue are clearly barred by the principles of "res judicata" and "issue estoppel" and on this ground also, the same deserve to be quashed.
24. The aforesaid facts and circumstances and the judgments referred to supra, clearly establish that bagasse is not a manufactured product and Rule 6 of the Cenvat Credit Rules, even after 2015 amendment is not applicable to bagasse nor to electricity generated from bagasse coupled with the fact that the Circular dated 25.04.2016 issued by the respondents pursuant to the 2015 amendment to Rule 6 having not only been quashed, but the same having been rescinded by the respondents by issuance of the Circular dated 07.07.2022 and consequently, the respondents did not have jurisdiction or authority of law to issue the
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WP No. 238 of 2018impugned show cause notice and Statement of Demand, which deserve to be quashed.
25. In the result, I pass the following:-
ORDER
(i) Petition is hereby allowed.
(ii0 The impugned Show Cause Notice at Annexure - A dated 30.03.2017 issued by the 3rd respondent is hereby quashed and consequently, the Statement of Demand at Annexure-B dated 25.10.2017 issued by the 2nd respondent is also hereby quashed.
Sd/-
JUDGE Srl.