Punjab-Haryana High Court
M/S Raj Leather Cloth Industries ... vs Union Of India And Others on 1 July, 2010
Author: Adarsh Kumar Goel
Bench: Adarsh Kumar Goel, Ajay Kumar Mittal
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH.
C.W.P. No.11352 of 2010
Date of decision: 1.7.2010
M/s Raj Leather Cloth Industries Private Limited.
-----Petitioner.
Vs.
Union of India and others.
-----Respondents
CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL
HON'BLE MR. JUSTICE AJAY KUMAR MITTAL
Present:- Mr. Jagmohan Bansal, Advocate &
Mr. Vishav Bharti Gupta, Advocate
for the petitioner.
---
ADARSH KUMAR GOEL, J.
1. This petition seeks quashing of order dated 20.1.2006, Annexure P-3 read with order dated 16.4.2010, Annexure P-6, under the provisions of the Central Excise Act, 1944 (for short, "the Act"), to the extent of directing payment of interest @ 10% for delayed payment of excise duty due, from the date the interest became leviable under Section 11AB of the Act i.e. 28.9.1996 till the date of payment.
2. We have heard learned counsel for the petitioner.
3. Contention raised on behalf of the petitioner is that liability to pay the excise duty arose, in the present case, prior to 28.9.1996, while under Section 11AB(2) of the Act, liability to pay interest under 11AB(1) of the Act is not to apply where duty became payable prior to the date on which Finance Act was passed i.e. 28.9.1996.
4. Show cause notice dated 7.9.1995 was given to the petitioner, alleging clandestine clearance of goods with a view to evade CWP No.11352 of 2010 2 liability to pay the excise duty. After due adjudication, the adjudicating authority, vide order dated 12.12.2003, determined liability of the petitioner to pay the excise duty, apart from imposing penalty, redemption fine and confiscation of the vehicle. The petitioner moved the Settlement Commission under Section 32 of the Act, seeking immunity from prosecution and other reliefs. The Settlement Commission vide order dated 20.1.2006, settled the duty liability, which had already been discharged and while granting immunity from interest above 10%, directed payment of interest @ 10% from 28.9.1996 till the date of payment and also granted immunity from fine in lieu of confiscation and penalty and prosecution.
5. The petitioner filed a writ petition in this Court but the same was dismissed as withdrawn on 20.1.2010, without prejudice to any other remedy in accordance with law. Thereafter, the petitioner filed an application in the nature of review petition before the Commission, which has been dismissed as not maintainable vide order dated 16.4.2010.
6. Learned counsel for the petitioner states that after the order of the Commission, calculation was duly made and demand of Rs.8 lacs approximately was raised, by calculating simple interest @ 10% per annum from 1996 to 2005 when the payment was made.
7. Contention raised on behalf of the petitioner is that there being no statutory provision for demand of interest on the date the goods were cleared in the year 1995, there was no question of grant of waiver of interest or demand of interest.
8. The questions for consideration are:-
CWP No.11352 of 2010 3
i) Whether writ petition earlier filed against order dated 20.1.2006 having been withdrawn without liberty to file a fresh petition, a second petition will lie on the same cause of action, when the petitioner did not take any other available legal remedy and merely filed miscellaneous application in the nature of review, which was admittedly not maintainable?
ii) Whether Section 11AB(2) of the Act will exclude liability to pay interest even for the period after the said provision was introduced?
9. In our view, the petition is without merit and questions have to be answered against the petitioner.
Re.(i):- Vide order of this Court dated 20.1.2010 in C.W.P. No.19575 of 2006, the writ petition was dismissed as withdrawn without prejudice to any other remedy in accordance with law without liberty to file a fresh petition. In such a situation, second petition on the same cause of action will not be maintainable. Reference may be made to law laid down by the Hon'ble Supreme Court in Sarbuja Transport Service v. State Transport Appellate Tribunal 1987(1) SCC 5. The question is answered accordingly.
Re.(ii):- While an assessee may not be liable to pay interest under Section 11AB of the Act for the period prior to enforcement of the said provision in absence of provision being retrospective, there is no reason to exclude liability for future. In the present case, the petitioner did not pay the amount due from 1996 to 2005. There is no valid justification to exclude liability to pay interest for the said period. Even CWP No.11352 of 2010 4 in equity, interest for delayed payment is payable, unless prohibited in law or by contract, as held in South Eastern Coalfields Ltd. v. State of M.P. & others (2003) 8 SCC 648. Moreover, having availed of remedy before Settlement Commission and benefit of immunity from prosecution, after evasion of liability, the petitioner cannot be allowed to challenge levy of interest.
10. Learned counsel for the petitioner referred to order of the Hon'ble Supreme Court in Commissioner of Central Excise, Coimbatore v. ELGI Equipments Ltd. 2001(128) ELT 52, holding that mandatory penalty under Section 11AC of the Act was prospective. He also relies on DB judgment of Jharkhand High Court in Commissioner of Central Excise v. Telco 2004(165) ELT 280 which follows the judgment in ELGI Equipments Ltd. Reliance has also been placed on judgment of this Court in M/s Competent Engineers v. Commissioner of Central Excise, Jalandhar (2007) 220 ELT 36, considering the issue of failure of Settlement Commission to advert to the prayer for waiver of interest. The judgments relied upon are distinguishable.
11. The question is answered against the petitioner.
12. In view of above, the petition is dismissed.
(ADARSH KUMAR GOEL)
JUDGE
July 01, 2010 ( AJAY KUMAR MITTAL )
ashwani JUDGE