Madras High Court
M/S. Arunachala Gounder Textile Mills ... vs Additional Commissioner Of Central ... on 16 June, 2014
Author: B. Rajendran
Bench: B. Rajendran
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 16-06-2014
CORAM:
THE HONOURABLE MR.JUSTICE B. RAJENDRAN
Writ Petition No. 1358 of 2014
and
M.P. No. 1 and 2 of 2014
M/s. Arunachala Gounder Textile Mills Pvt Ltd
No.5, Bye-pass Road
Pallipalayam
Erode 638 006
Rep. By its Director .. Petitioner
Versus
1. Additional Commissioner of Central Excise, Salem
Foulks Compound
Anaimedu
Salem 636 001
2. Assistant Commissioner of Central Excise
Erode-II Division
No.81, Bharathi Nagar
Veerappan Chatram Post, Soolai
Erode 638 004 .. Respondents
Petition filed under Article 226 of The Constitution of India praying for a Writ of Certiorari calling for the records of the first respondent culminated in his show cause notice No.69/2013-CX (ADC) bearing Reference No.C.No.V/52/30/150/2013 CD-Adj dated 16.12.2013 and quash the same.
For Petitioner : Ms. Maithili
for M/s. Maithili Associates
For Respondents : Mr. V. Sundareswaran
ORDER
The petitioner has come forward with this writ petition challenging the show cause notice dated 16.12.2013 issued by the first respondent. In and by the said notice, the petitioner was called upon to show cause as to why the amount of Rs.18,32,782/- sanctioned and paid to them by the second respondent be not recovered under Section 11A of the Central Excise Act with applicable interest.
2. The petitioner is manufacturer of various kinds of yarn falling under Chapter 52 and 55 of the Schedule to Central Excise Act. According to the respondents, during the course of the said business, the petitioner paid commission to overseas agencies whereby they become liable to pay service tax under Business Auxillary Services. As the petitioner did not pay the service tax, an order dated 31.07.2009 was issued by the Deputy Commissioner, Erode II Division assessing a sum of Rs.18,32,782/-. This order was challenged by the petitioner before the Commissioner (Appeals), Salem and it was dismissed on 30.09.2001. A further appeal was filed before the CESTAT, Chennai along with an application for interim stay. When the stay application was pending, the second respondent issued a notice calling upon the petitioner as to why the arrears shall not be recovered from the rebate claims to be sanctioned to them. The petitioner, on receipt of the notice, appeared for a personal hearing on 08.06.2012 and only informed that the application for stay is pending before the CESTAT, Chennai. As there was no interim stay granted, while sanctioning 15 rebate claims, by an order dated 12.06.2012, the arrears of Rs.18,32,782/- was appropriated and the remaining amount of Rs.28,67,312/- was sanctioned and paid to the petitioner. In view of the above, the application for interim stay was dismissed as infructuous by the CESTAT, Chennai. Aggrieved by the same, the petitioner filed WP No. 19649 of 2012 before this Court to quash the order appropriating the arrears amount of Rs.18,32,782/- and this Court, by order dated 28.09.2012 set aside the order of appropriation. As against the order dated 28.09.2012 in WP No. 19649 of 2012, the Department has also filed Writ Appeal and it is pending. However, on the basis of the order passed by this Court on 28.09.2012, the sum of Rs.18,32,782/- was paid to the petitioner on 25.02.2013. In the meantime, a letter dated 05.10.2012 was issued to the petitioner seeking to recover the interest, against which WP No. 28776 of 2012 was filed and interim stay was granted by this Court. During the pendency of the writ petition, the CESTAT, Chennai has dismissed the appeal filed by the petitioner on 25.05.2013. According to the respondents, in order to avoid time bar demand in future, they have issued a notice of demand dated 16.12.2013, which is challenged in this writ petition.
3. The learned counsel for the petitioner submits that as on the date of issuing the show cause notice, the sum of Rs.18,32,782/- is not due and payable by the petitioner company because it was the subject matter of the final order passed by the CESTAT, Chennai. The show cause notice has been issued without application of mind and therefore it is not legally sustainable.
4. On the other hand, the learned standing counsel appearing for the respondents, relying on the counter affidavit, would contend that the first respondent has not adjudicated the dispute by passing a final order. What is challenged in this writ petition is a only a show cause notice calling upon the petitioner to submit their explanation. The petitioner, instead of submitting their objections has rushed to this Court by filing this writ petition. The learned counsel for the respondents therefore prayed this Court to dismiss the writ petition.
5. I heard the learned counsel for the petitioner as well as the learned standing counsel for the respondents. As rightly pointed out by the learned standing counsel for the respondents, the petitioner has filed this writ petition challenging a show cause notice issued by the first respondent. By the impugned notice, the petitioner was only called upon to submit their objections, if any. The show cause notice has been issued in compliance with the principles of natural justice and it cannot be said to be arbitrary or illegal. Therefore, the writ petition is disposed of with a direction to the petitioner to submit their explanation to the notice which is impugned in this writ petition along with necessary documents in support of their claim. On receipt of such notice, the respondents shall afford an opportunity of hearing to the petitioner and then pass orders on merits and in accordance with law. It is needless to mention that the petitioner shall also be permitted to engage an auditor of their choice, if they so desire. No costs. Consequently, connected miscellaneous petitions are closed.
16.06.2014 rsh To
1. Additional Commissioner of Central Excise, Salem Foulks Compound Anaimedu Salem 636 001
2. Assistant Commissioner of Central Excise Erode-II Division No.81, Bharathi Nagar Veerappan Chatram Post, Soolai Erode 638 004 B. RAJENDRAN, J rsh WP No. 1358 of 2014 16-06-2014