Calcutta High Court
Andrew Yule & Co Ltd vs Commissioner Of Central Excise on 27 July, 2015
Author: Arindam Sinha
Bench: Arindam Sinha
ORDER SHEET
WP No. 1545 of 2008
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
ORIGINAL SIDE
ANDREW YULE & CO LTD.
Versus
COMMISSIONER OF CENTRAL EXCISE,KOL-V
COMMISSIONERATE & ORS
BEFORE:
The Hon'ble JUSTICE ARINDAM SINHA
Date : 27th July, 2015.
Mr. J.P. Khaitan, Sr. Adv.
Mr. Sanjoy Bhowmick, Adv.
Mr. Partha Banerjee, Adv.
...for the petitioner
Mr. R. Bharadwaj, Adv.
Mr. K.K. Maiti, Adv.
...for the respondents
The Court : The writ petitioner has challenged a show-cause notice dated 9th February, 1994, the following adjudication order dated 30th November, 2005 and the order in appeal dated 14th February, 2007. Mr. Khaitan, learned senior Advocate appearing on behalf of the petitioner submitted that the petitioner by filling in Annexure 1 effective from 25th July, 1991 under Rule 173B of the Central Excise Rules, 1944, had, inter alia, given the description of three items manufactured by it being Field Switch, Transwitch Unit and Stator Rotor Panel. The petitioner had given the description of such goods to have classification under tariff items 85.35 2 and 83.37 in the first schedule to the Central Excise Tariff Act, 1985. The said tariff items read as follows:
"85.35 8535.00 Electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, fuses, ligh- tning arresters, voltage limiters, surge suppressors, plugs, junction boxes), for a voltage exceeding 1,000 volts 85.37 8537.00 Boards, panels (including numerical control pan-
els), consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading No. 85.35 or 85.36, for electric control or the distribu-
tion of electricity, including those incorporating instruments or apparatus of Chapter 90, other than switching apparatus of heading No. 85.17"
According to him, a belated show-cause notice was issued on 9th February, 1994 alleging suppression to bring it within the proviso to Section 11A of the Central Excise and Salt Act, 1944. An adjudication order followed upholding the demand made in the show-cause notice. The petitioner however preferred an appeal beyond the period of limitation provided and as such the same was not considered on merits. Mr. Khaitan relied on a decision in the case of 'U.P. State vs. Mohammad Nooh' reported in AIR 1958 SC 86 in which, inter alia, the following was stated:
"...It has also been held that a litigant who has lost his right of appeal or has failed to perfect an appeal by no fault of his own may in a proper case obtain a review by certiorari. If, therefore, the 3 existence of other adequate legal remedies is not per se a bar to the issue of certiorari and if in a proper case it may be the duty of the superior Court to issue a writ of certiorari to correct the errors of an inferior Court or tribunal called upon to exercise judicial or quasi-judicial functions and not to relegate the petitioner to other legal remedies available to him and if the superior Court can in a proper case exercise its jurisdiction in favour of a petitioner who has allowed the time to appeal to expire or has not perfected his appeal e.g., by furnishing security required by the statute, should it then be laid down as an inflexible rule of law that the superior Court must deny the writ when an inferior Court or tribunal by discarding all principles of natural justice and all accepted rules of procedure arrived at a conclusion which shocks the sense of justice and fair play merely because such decision has been upheld by another inferior Court or tribunal on appeal or revision ?"
"11. On the authorities referred to above it appears to us that there may conceivably be cases - and the instant case is in point - where the error, irregularity or illegality touching jurisdiction or procedure committed by an inferior court or tribunal of first instance is so patent & loudly obtrusive that it leaves on its decision an indelible stamp of infirmity or vice which cannot be obliterated or cured on appeal or revision. If an inferior Court or tribunal of first instance acts wholly without jurisdiction or patently in excess of jurisdiction or manifestly conducts the proceedings before it in a manner which is contrary to 4 the rules of natural justice and all accepted rules of procedure and which offends the superior court's sense of fair play the superior Court may, we think, quite properly exercise its power to issue the prerogative writ of certiorari to correct the error of the Court or tribunal of first instance, even if an appeal to another inferior Court or tribunal was available and recourse was not had to it or if recourse was had to it, it confirmed what ex facie was a nullity for reasons aforementioned. This would be so all the more if the tribunals holding the original trial and the tribunals hearing the appeal or revision were merely departmental tribunals composed of persons belonging to the departmental hierarchy without adequate legal training and background and whose glaring lapses occasionally come to our notice. The superior Court will ordinarily decline to interfere by issuing certiorari and all we say is that in a proper case of the kind mentioned above it has the power to do so and may and should exercise it. We say no more than that."
He submitted the goods were correctly classified and on queries subsequently made by the revenue, the same answered and therefore it could not be said that there has been wilful mis-statement or suppression of facts.
Mr. Bharadwaj, learned advocate appearing on behalf of the revenue relied on the case of 'Raja Mechanical Co. (P) Ltd. vs. Commissioner of Central Excise, Delhi-I' reported in 2012 (279) E.L.T. 481 (S.C.) to submit that there was no merger of the order of the Tribunal with the 5 Appellate order since the order in appeal was made on the point of limitation. He then relied on the cases of 'Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur': 2008 (221) E.L.T. 163 (S.C.) and 'D.R. Industries Limited vs. Union of India': 2008 (229) E.L.T. 34 (Gujarat) which dealt with the question of whether Section 5 of the Limitation Act could be resorted to by the appellate Tribunal in condoning a longer period of delay than what was prescribed under the special statute applicable to it. He also relied on the case of 'S.S. Rathore vs. State of Madhya Pradesh' reported in 1989 (4) SCC 583 (SC) to submit that Mohammad Nooh (supra) had been held to be not applicable to the facts and circumstances of that case which, according to Mr. Bharadwaj, were similar to the facts and circumstances of the case at hand. He thus submitted that the writ petition was not maintainable.
On merits he submitted there had been wilful suppression though the phrase 'wilful suppression' was neither used in the show-cause notice nor in the adjudication order. He submitted that the show-cause notice was duly issued in asking the petitioner to show-cause which it had failed to do. He relied on the following portion of the show-cause notice:
"......The facts of basic function of 'Transwitch', 'Field Switch' and 'Stator Rotor Panel' as Electrical Transformer and current Transformer respectively as described elaborately above, has been suppressed in the classification list submitted by the said company which has resulted in misclassification & short levy of Central Excise duty to the extent of Rs. 47,58, 863/- (Rupees forty seven lakhs fifty eight thousand eight hundred and sixty three) only."
With regard to the adjudication order Mr. Bharadwaj submitted that suppression had been established as had been held therein:
"The fact that the basic function of the items viz. Transwitch, Field Switch and starter rotor 6 panel are as electrical transformer and current transformer has not been disclosed in the classification list submitted by the assessee which resulted in improper classification and short levy of C. Ex. duty. The suppression by the assessee for misclassification and short levy, therefore, is established."
On the question of maintainability the law declared is as in Mohammad Nooh (supra) regarding judicial review being available to a litigant in a proper case where a superior Court would exercise its jurisdiction in favour of a petitioner who had, inter alia, allowed the time to appeal to expire. The case of S.S. Rathore (supra) relied on by Mr. Bharadwaj had in it the facts that the plaintiff had claimed by suit that he had been wrongfully dismissed from service. The suit was belated. The plaintiff had in the period of delay waited for the authorities to decide on such claim and on rejection of such claim, the suit was filed. The question arose regarding the suit being barred by limitation. The Supreme Court rejected the contention that the orders of the authorities negating the claim of the plaintiff, upon merger should be taken as the starting point of limitation in spite of cause of action accruing to the plaintiff on his dismissal. On such point the Supreme Court had held as it did in discussing a somewhat similar point raised in Mohammad Nooh (supra) where the cause arising in the year 1948 was sought to be addressed under Article 226 of the Constitution of India which came into being in the year 1950, on the ground of merger. As such, this Court finds 7 Mohammad Nooh (supra) was overruled on a different point regarding merger of orders of Tribunals and courts as powers of adjudication ordinarily vested in courts are being exercised under the law by Tribunals and other constituted authorities. The declaration of law regarding availability of judicial review could not be shown to have been overturned in S.S. Rathore (supra). The writ petition is maintainable in the facts and circumstances of this case particularly when the show cause notice was belated, it did not refer to wilful mis-statement or suppression of facts and thus the petitioner should not be barred from availing judicial review as the subsequent appeal preferred by it was dismissed as delayed.
On merits Mr. Bharadwaj could not demonstrate that the description given by the petitioner in the aforesaid annexure was a mis-description as a wilful mis-statement or such description was in wilful suppression of facts and the goods could not be called switches as opposed to transformers. The case of the revenue as appearing from the show cause notice and the adjudicating order is that the goods though switches were only switches by components but actually transformers. Otherwise too there is no finding regarding 'wilful' mis-statement or suppression of facts. Mr. Khaitan relied on the case of 'Cosmic Dye Chemical vs. Collector of Central Excise, Bombay': 1995 (75) E.L.T. 721 (S.C.) in paragraph 6 of which the Supreme Court had interpreted the proviso to Section 11A of the said Act as follows:
8
".....So far as mis-statement or suppression of facts are concerned, they are clearly qualified by the word "wilful" preceding the words "mis-statement or suppression of facts" which means with intent to evade duty."
A perusal of the show cause notice and the adjudicating order does not also reveal there has been any allegation or finding of wilful mis- statement or suppression of facts by the petitioner inasmuch as it was not disputed that the detailed functioning of the switches and stator panel was obtained from the petitioner subsequently. The classification made by the petitioner not having been demonstrated to be a wilful mis-statement or there being wilful suppression of facts with regard thereto, this Court finds that the challenge of the petitioner succeeds. The show cause notice dated 9th February, 1994 and the order in original dated 30th November, 2005 are set aside. Mr. Bharadwaj had submitted that the show cause and the order in original could not be set aside since the appellate order was duly made and therefore cannot operate in a vacuum. The point thus raised has also been answered by the Supreme Court in Mohammad Nooh (supra).
The writ petition is allowed to the extent aforesaid. Urgent photostate copy of this order, if applied for, be given to the learned advocates for the parties on usual undertakings.
(ARINDAM SINHA, J.) TR/ 9