Bombay High Court
Acc Ltd. And Anr vs Union Of India And 3 Ors on 9 January, 2017
Author: S.C. Dharmadhikari
Bench: S.C. Dharmadhikari, B.P. Colabawalla
OSWP2733.16.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 2733 OF 2016
1. ACC Limited, a Public Limited Company ]
having its registered office at Mumbai, ]
Cement House, 121, Maharshi Karve Road ]
Churchgate, Mumbai [Through its General ]
Manager (Finance) Mr. Pratyush ]
Chattopadhyay] ]
2. Mr.Goutam Goswami, an Indian inhabitant ]
of Mumbai and a Shareholder and an ]
st
employee of the 1 Petitioner, having his ]
office at Cement House, 121, Maharshi ]
Karve Road, Churchgate, Mumbai. ] ... Petitioners
Versus
1. Union of India, represented by Secretary ]
Ministry of Finance, Department of ]
Revenue, North Block, New Delhi 110001 ]
2. Central Board of Excise & Customs, ]
Department of Revenue, through its ]
Chairman, Ministry of Finance, ]
Government of India, North Block, ]
New Delhi. ]
3. Commisioner of Central Excise, Large ]
Taxpayer Unit (LTU), Mumbai World ]
Trade Centre-I, 28th Floor, Cuffe Parade ]
Mumbai - 400 005. ]
4. Deputy Commissioner of Central Excise, ]
Large Taxpayer Unit (LTU), Mumbai ]
World Trade Centre-I, 28th Floor, ]
Cuffe Parade, Mumbai - 400 006. ] ... Respondents
SRP 1/29
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OSWP2733.16.doc
WITH
WRIT PETITION NO. 2734 OF 2016
1. Ambuja Cements Ltd., a Public Limited ]
having its Corporate Office at Elegant ]
rd
Business Park, 3 Floor, MIDC Cross Road-]
'B', Andheri-Kurla Road, Near Kohinoor ]
Hotel, Andheri (E), Mumbai - 400 059 ]
Through its Mr. G. Seetharama Shetty, ]
Asst. Vice President - Indirect Taxation ]
2. Mr. Anil Singh, an Indian inhabitant and ]
Shareholder, having his lace of work at ]
Ambuja Cements Ltd., Corporate Office, ]
Elegant Business Park, 3rd Floor, MIDC ]
Cross Road -'B' Andheri - Kurla Road, ]
Near Kohinoor Hotel, Andheri (East), ]
Mumbai - 400 059. ] ... Petitioners
Versus
1. Union of India, represented by Secretary ]
Ministry of Finance, Department of ]
Revenue, North Block, New Delhi 110001 ]
2. Central Board of Excise & Customs, ]
Department of Revenue, through its ]
Chairman, Ministry of Finance, ]
Government of India, North Block, ]
New Delhi. ]
3. Commisioner of Central Excise, Large ]
Taxpayer Unit (LTU), Mumbai World ]
Trade Centre-I, 28th Floor, Cuffe Parade ]
Mumbai - 400 005. ]
4. Deputy Commissioner of Central Excise, ]
Large Taxpayer Unit (LTU), Mumbai ]
World Trade Centre-I, 28th Floor, ]
Cuffe Parade, Mumbai - 400 006. ] ... Respondents
SRP 2/29
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OSWP2733.16.doc
Mr. S. Ganesh, senior counsel with Mr. V.A.Rana, Ms. Vishakha
Vaswani, Mr. Zeeshan Farooqui i/b M/s. Gagrats for the
Petitioners in both petitions.
Mr. Anil C. Singh, Additional Solicitor General with Mr. Swapnil
Bangur, Mr. Vipuyl Bajpayee and Ms. Indrayani Deshmukh for
the Respondents.
CORAM : S.C. DHARMADHIKARI &
B.P. COLABAWALLA, JJ.
MONDAY, 9TH JANUARY, 2017
ORAL JUDGMENT : [Per S.C. Dharmadhikari, J.]
1 These two petitions under Article 226 of the Constitution of India pray for issuance of a writ of certiorari or any other appropriate writ or direction in the nature thereof calling for the records and proceedings in relation to an order-in- original dated 16th September, 2016, of the Deputy Commissioner, Central Excise and Service Tax, Large Taxpayer Unit, Mumbai. The order dated 16th September, 2016, sanctions a refund of Rs.652,41,66,464/- as the excess duty paid and claimed by the petitioner claimant, but the impugned order directs that this sum shall be credited to the Consumer Welfare Fund in terms of clause / para (d) of the first proviso to section 11B(2) of the Central Excise Act, 1944, read with section 12B of the said Act. The refund claim is held to be hit by unjust SRP 3/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:19 ::: OSWP2733.16.doc enrichment. The refund claim and interest in the sum of Rs.276,68,53,222 is also rejected.
2 On such a petition, Mr. Anil Singh, learned Additional Solicitor General of India raised a preliminary objection. He would submit that given the nature of the findings and which are purely factual or, in any event, factual and legal, a writ petition under Article 226 of the Constitution of India should not ordinarily be entertained. The refund claim is rejected by the Deputy Commissioner and there are multiple remedies to challenge this order. Firstly, there is a remedy to approach the Commissioner (First Appellate Authority) and eventually the Tribunal. Even if in these rounds the petitioners do not succeed, the orders of the Appellate Authorities can be impugned and challenged in substantive proceedings under the Central Excise Act, 1944, before this Court. Therefore, we should not entertain the writ petition.
3 Mr. S. Ganesh, learned senior counsel appearing on behalf of the petitioners would submit that these writ petitions are maintainable. He would submit that there is no dispute about SRP 4/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:19 ::: OSWP2733.16.doc facts. There are pure questions of law raised by the petitioners. A substantial amount claimed as refund was deposited as per a pre deposit order of the Commissioner (Appeals). In cases of such nature, the principle of unjust enrichment has no application. Placing reliance upon a Division Bench order passed by this Court in the case of Suvidhe Limited vs. Union of India, 1996 82 ELT 177, and that of the Hon'ble Supreme Court upholding this view in the case of Commissioner of Customs (Import) Raigad vs. Finacord Chemicals (India) Limited 2015 319 ELT 616 , Mr. Ganesh would submit that it is erroneous to assume that there is any factual matter which is brought before this Court directly. It is an erroneous principle of law which has been applied in the impugned order and that is how for correction of the same, this Court's extraordinary, equitable and discretionary jurisdiction under Article 226 of the Constitution of India is invoked. 4 Mr. Ganesh would then submit there is another wrong test applied in the impugned order and which is purely legal. The impugned order proceeds on the footing that if the amount paid as duty under protest is reflected in the accounts as receivable then alone a claim for refund can be raised. Else, it would be presumed SRP 5/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:19 ::: OSWP2733.16.doc that the duty which has been so paid has been recovered by passing the burden on the consumers. This cannot be a test in law according to Mr. Ganesh. He would submit that there is no obligation to show the duty on the credit side of the Profit & Loss Account. In that regard, he would submit that there is a binding order passed by the CESTAT and which ought to be followed by the Deputy Commissioner in this case. Secondly, where there are seventeen units of the petitioner-ACC Limited and the matter pertains to only two units Gagal-I and Gagal-II, which are affected, then, there is no obligation and in law which can be said to be cast on the petitioners and particularly that they must suffer a loss and which must be proved. These are not only erroneous findings on factual aspects inasmuch as full assistance was rendered to the authorities by producing various documents but also in law. 5 It was submitted that there is no requirement to show the liability on the debit side of the Profit & Loss Account and to show and prove a loss and even that aspect has been included in the Tribunal's order. In these circumstances, relying upon the judgment of the Hon'ble Supreme Court in the case of Commissioner of Central Excise vs. Allied Photographics (India) SRP 6/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:19 ::: OSWP2733.16.doc Limited (2004) 4 SCC 34, it is submitted that this writ petition be entertained.
6 Apart from contending and on the general principles that maintainability of writ petition in the teeth of multiple remedies which may be equally efficacious has to be determined by not assuming an absolute bar. It is submitted that the Hon'ble Supreme Court in the case of Aircel Limited vs. Commercial Tax Officer, Writ Petition Nos.1055 and 1057 of 2013 , decided on 22nd April, 2016, held that when there are pure questions of law they could be gone into in writ jurisdiction. Once these are pure questions of law, then, we cannot invoke the bar nor can refuse to entertain the writ petition.
7 Reliance is also placed upon an order passed by the Hon'ble Supreme Court in the case of Paradip Port Trust vs. Sales Tax Officer & Ors. (1998) 4 SCC 90.
8 With the assistance of Mr. Ganesh and the learned Additional Solicitor General, we have perused the writ petition and the annexures thereto, including the impugned order. At the SRP 7/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:19 ::: OSWP2733.16.doc outset, we must clarify that we have dealt with only the issue of maintainability of the writ petitions in the teeth of the above multiple remedies being available. Mr. Ganesh does not dispute that the petitioners have such remedies open to them and they can invoke the same. However, it is only his emphasis that pure questions of law arise for determination and consideration and, therefore, the writ petition be entertained and directly in this Court that we are required to give this reasoning and express an opinion. Our order and view shall stand confined to only that aspect. Nothing on merits and raised by both sides is affected by this order on the preliminary issue.
9 We have before us the petitions of two entities and we can conveniently take the facts from the case of the petitioner- ACC Limited. What we have before us is the claim based on a factory at Gagal (Gagal Cement Works Unit-I) Barmana, Bilaspur, Himachal Pradesh. The said unit has undertaken substantial expansion of installed capacity in the plant and, therefore, became eligible to claim exemption from payment of excise duty. Reliance was placed on certain notifications. Needless to state that the assessee-petitioner is a manufacturer of cement. Further SRP 8/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc relying upon the Central Excise Registration and the process of manufacture it is claimed that the manufacture of clinker an excised commodity which is used captively for manufacture of cement by using inputs like gypsum and/or fly ash etc., cement is manufactured out of the clinker and cleared for sale from the factory gate or cleared on stock transfer to other depots. The Gagal-I Unit is clearing the cement on payment of excise duty at appropriate rate. Some amount of clinker is also removed from time to time on payment of appropriate duty to the sister unit Gagal Cement Works Unit-II. Some quantity of clinker may also be sold from the factory on payment of appropriate duty. After setting out the details with regard to the substantial expansion of installed capacity, the nature of exemption claimed, what is then pointed out is that the Revenue and the petitioner before us had been engaged in a prolonged legal battle. That prolonged legal battle ended with the case of the assessee being accepted. How that battle commenced and ended is pointed out in a communication dated 4th November, 2015, copy of which is to be found at page 123 of the ACC petition paper-book. It is stated that the denial of the benefit of exemption notification resulted in an appeal before the Commissioner (Appeals), Central Excise, SRP 9/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc Chandigarh. There was an order passed on 29th September, 2005, denying the benefit of Notification 67/1995. Therefore, an appeal was filed before CESTAT and the claim is that the assessee- petitioner started paying duty under protest as no stay of the demand was granted. The CESTAT order dated 7th March, 2006, is the final order. Being aggrieved thereby the assessee carried the matter to the Hon'ble Supreme Court of India and Civil Appeal No.2912 of 2006 was decided on 21st August, 2015. The order of CESTAT was set aside and it was held that the product "clinker" which was captively consumed is covered by this Excise Notification. It is based on the final order of the Hon'ble Supreme Court that the claim for refund was laid. It was stated that duty was paid on captively consumed clinker. The duty was paid under protest from May 2005 to February, 2013 for both the plants, namely, Gagal-I and Gagal-II. The petitioner pointed out the details of availment of cenvat credit during the period under reference on a purely protective basis as claimed and the payments of duty under protest. The petitioner gave this break- up in several statements. The break-up was in relation to the main or principal sum and interest. The declaration was that no refund on this account has been claimed / received earlier. The SRP 10/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc Deputy Commissioner was requested to process this claim and in the final paragraph of this communication, it it stated that the petitioners declare that the duty in respect of which refund has been claimed has not been charged to nor realised from any customers or from any other person and hence it is refundable only to the petitioners in terms of the proviso to section 11B (2) of the Central Excise Act, 1944.
10 For ready reference we reproduce that part of section 11B.
"11B. Claim for refund of duty and
interest , if any, paid on such duty .-
(1) ............
(2) If, on receipt of any such application, the
Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund :
Provided that the amount of duty of excise as determined by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to--
(a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of SRP 11/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc India;
(b) unspent advance deposits lying in balance in the applicant's current account maintained with the Commissioner of Central Excise;
(c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act;
(d) the duty of excise paid by the manufacturer, if he had not passed on the incidence of such duty to any other person;
(e) the duty of excise borne by the buyer, if he had not passed on the incidence of such duty to any other person;
(f) the duty of excise borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify :
Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government, the incidence of duty has not been passed on by the persons concerned to any other person.
........."
11 The argument is that the first proviso to sub-section (2) of section 11B and which states that the amount instead of being credited to the Fund be paid to the petitioner-applicant as such amount is relatable to the duty of excise and interest, if any, paid on such duty. Provided that duty is paid by the manufacturer and he has not passed the incidence of such duty SRP 12/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc and interest to any other person. What we find is that after this communication together with the related statements was received, the Deputy Commissioner addressed a deficiency memo. That deficiency memo, copy of which is at page 131, inter alia, states that the petitioner has failed to furnish all the central excise invoices showing clearance of clinker for captive consumption for both units for the relevant period. Then it is stated that during the scrutiny of ER-1 returns for Gagal-I it is seen that the details of balances and payments of the appropriate central excise duty on the clinker captively consumed are not reflected in these returns (May, 2005 and June, 2005). Then it is stated that during the scrutiny of ER-I returns for Gagal-II Unit Challan Nos./TR6 Challan numbers have not been submitted in most of the ER-1 returns for the amount of duty paid under protest for captively consumed clinker. Importantly it was stated that as per section 11B the claim shall be accompanied by such documentary or other evidence as the applicant may furnish to establish that the amount of duty of excise and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by him and incidence of such duty and interest, if any, paid on such duty, had not been passed on by him SRP 13/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc to any other person. In the absence of the central excise invoices it is not understood as to whether the petitioner has mentioned the duty element in the invoices or not. Further, whether the duty paid has been included / accounted for in arriving at the sale price of the final product, namely, cement cleared from the Gagal-I and Gagal-II unit could not be ascertained as the petitioner has failed to submit the costing duty of the cement and CAS-4 for the relevant period. 12 The petitioner replied to this Deficiency Memo on 18 th February, 2016, and submitted that the refund claim has been forwarded with all the information. The central excise invoices and which are referred in the communication are available. About 100 invoices of such periods as representative samples were relied upon and a list of these was then provided. The petitioners purported to reply to each and every query / deficiency and asserted that the refund claim be processed at the earliest. They also then, by a further communication dated 22nd February, 2016, annexed the cost certificates issued by the Cost Auditor for the period April, 2005 to April, 2013 for Gangal-I and April, 2006 to February, 2013, for Gagal-II. They also stated that SRP 14/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc should the Deputy Commissioner require any further documents or information or assistance or clarification, they are available for giving the same. The Deputy Commissioner on 25 th February, 2016, on scrutiny and verification of the application, raised certain points. He asserted that the Deficiency Memo has not been complied with in the sense that the queries and deficiencies pointed out therein are not satisfactorily replied. This round of correspondence and on this issue continued and we have before us the letter of 12th April, 2016, copy of which is from pages 147 to 149 of the paper-book. There is a set of documents annexed with all the letters. Then what we have is a communication of 15 th April, 2016, relying upon the personal hearing which was held in the office of the Deputy Commissioner. During the course of hearing the Commissioner seems to have pointed out to the petitioners that the status / position of refund as reflected year- wise in the documents, namely, balance sheet, Profit & Loss Account and in audited annual financial report / statement of the respective years, was sought for. However, the said direction has not been complied with and instead a Chartered Accountant's certificate has been submitted stating that the payment has been made under protest for excise duty on clinker and that is in SRP 15/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc agreement with the entries in some ledger account. However, the Deputy Commissioner maintained that on one hand the petitioners show the refund claimed in an accounting year as expenses items on the expenditure side in the Profit & Loss Account along with the total excise duty paid by the company in that year. However this being so general it implies that the amount of refund claimed has been passed on to the buyer or any other person. Moreover, the petitioner seems to have relied on some other documents. The refund claim has been set out separately in annual trial balances for each accounting year which precedes the preparation of the Profit & Loss account and the Balance Sheet. The reliance on the Chartered Accountant's certificate was thus not found to be adequate. The Deputy Commissioner, therefore, maintained that the documents enlisted by him in his communication on the issue and dated 15 th April, 2016, are vital and important. Those would enable him to decide and sanction the refund and, in the the absence of the same, it will amount to non discharge of the onus cast on the petitioners in terms of the third proviso to section 11B and also section 12B. This position was maintained by him and in the further letter dated 18th May, 2016, as well.
SRP 16/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 :::
OSWP2733.16.doc 13 The petitioner seems to have submitted that though section 11B and the proviso has been invoked, it is apparent that all the documents have been submitted. The amounts were deposited under protest and the cenvat credit was taken on a protective basis for manufacturing clinker which was again captively consumed. The stand that the petitioner took was that conservative principles of accounting which are relied upon need not be applied and universally. The amount was paid under protest as already confirmed by the auditors. It is lying in an asset account which includes amounts paid under protest by the company. Such an accounting entry, keeping the risk factor in mind, is not in line with the conservative accounting policy since the matter was subjudice. This cannot lead to a conclusion that the excise duty element has been or was intended to be recovered from the customers. Besides the above, the fact remains that cement prices are demonstrably and completely market determined and driven and are independent of cost of manufacture or the costs incurred by the manufacturer. If the department desires or permits, the company can provide irrefutable proof, though it would take some time to do so. SRP 17/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 :::
OSWP2733.16.doc Passing on any specific cost element, which is applicable only to the manufacturer, through the price charged which is over and above the market price generally applicable, was not possible and could not have been achieved. Any additional recovery or an attempt to pass of any burden would not be accepted by the market / consumers who may opt for any alternative in the market. It is, therefore, a clarification by the petitioner that the sum in respect of which refund is claimed, the incidence has not been passed on to or realised from any customer or from any other person. This and the other queries raised were also sought to be replied by this detailed communication which ends at page 165 of the paper-book. It is also clear that the claim for interest was sought to be amplified and clarified by relying upon further communication of the petitioner dated 25th May, 2016 and 26th May, 2016. On 26th May, 2016, it has been stated that paragraph 9 of their earlier letter clarifies the position and answers the question. Then it is stated that for the first time the Revenue is seeking to rely on section 11B relating to unjust enrichment. The submissions with regard thereto are already made. However, the petitioners believe it to be their obligation as well as their right to justify the claim and while doing that they are in the process of SRP 18/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc collating various information, including analysis of various economic data and that is time consuming. That is how they relied upon the Chartered Accountant's certificate and stated that they would have to revert back to him so that at least a sample data can be provided. The petitioners themselves maintained that the issue is complex and requires an in-depth analysis of various information. Even their auditors would require more time to complete the verification process before giving their observation in this regard. They maintained that their claim is not hit by unjust enrichment. We find that detailed correspondence even after this letter continued and this would denote as to how the Revenue maintained that the deficiency has not been cured, whereas the petitioners maintained that the available information, as disclosed, is sufficient to process and grant the claim.
14 In fact, when the petitioners place reliance on a communication, copy of which is annexed to the petition as Annexure-AB, dated 1st August, 2016, in paragraph 5.5.8 they state that the trends on movement of sale price, cost of production and total cost in the two most important markets SRP 19/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc served by Gagal Plants Himachal and Punjab is the one that is set out in this letter. Thus, the impact on overall profitability due to movements and total cost was an issue clarified. 15 It is on this and the other detailed material that the impugned order has been passed. Upon perusal of the same, it is evident that this is not a matter where the refund claim comprises solely of amounts paid as a condition for stay or a pre deposit order. The total sum of refund and which is claimed is broken up into several aspects, one of which is a amount of duty deposited as a condition to avail of the right of appeal. Thus, not the entire sum could be said to be comprised in a pre deposit order. There are elements of duty paid under protest and which are also included in the refund claim. In relation to such duty payment and under protest, the petitioners maintain and in terms of their declaration that the burden has been discharged entirely by them. They have paid the duty. The incidence of such duty has not been passed on to the consumers and, therefore, there is no requirement of depositing the sum to the credit of the Fund (Consumer Fund within the meaning of the statutory provision). It is on such a composite claim and which was SRP 20/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc considered by the Deputy Commissioner that the impugned order has been passed. On the basis of the claims and the stand of the Revenue, the Deputy Commissioner framed four points for his consideration. They are summarized at internal page 17 of the impugned order. The first is whether there was excess duty paid and accordingly, the subject refund claim arises and if so, then, to the extent of what amount and second is whether the subject refund claim as mentioned by him in paragraphs preceding page 17 has been filed within the time limit as prescribed in section 11B of the Central Excise Act, 1944; whether this claim of interest by the claimant in terms of section 35FF of the Central Excise Act, 1944 on the said refund claim is admissible and importantly the issue as to whether the subject refund claim is hit by the unjust enrichment aspect. Though the arguments have been canvassed by both sides and focussing on this issue what we find is that it will not be proper to pick out any one sentence or finding from this rather lengthy order passed by the Deputy Commissioner. The discussion on the aspect of unjust enrichment commences from internal page 29 (running page 78) of the impugned order. The Deputy Commissioner refers to the claim for refund, the deficiencies or inaccuracies therein and as pointed SRP 21/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc out in the detailed correspondence and the reply or clarifications given by the petitioners. He concludes that from the submissions of the petitioners it is evident that they are trying to enumerate the various factors which decide the market price / selling price of the cement manufactured by them and accordingly they state that they have no control over these factors. The cost increase can be passed on to the consumers only when there is a high demand than the supply and such times are seasonal and cyclical also. The Deputy Commissioner states that the petitioners at least are agreeing on the point that cost increase of the cement can be passed by them to the consumers / buyers during the high demand for the same. However, the main question on the issue is not about those factors or reasons affecting the sale price or determining the sale price. The main question is whether being a manufacturer, they sold their duty exempted cement at a price lower than the cost price of the cement as mentioned in their cost data sheet / CAS 4 of the cement which includes the duty paid under protest for the clinker captively consumed in the manufacture of the duty exempted cement, during the relevant period. Thereafter the impugned order proceeds on some common understanding of the manufacturers. The finding then is SRP 22/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc that manufacturing expenses of the duty exempted cement manufactured includes the cost of raw materials, in this case, such as clinker and others and there are other costs included as well. Out of all the raw material used in this regard, clinker is the major one. Hence, whatever be the factors as stated by the claimant which influence the selling price of duty exempted cement, the manufacturer while selling the goods and realising the proceeds would proceed in the manner held by the Deputy Commissioner. It is in these circumstances that the cost duty sheet and the details thereof are commented upon. It is in these circumstances that he renders a finding and which we find to be recorded at internal page No.32 that the petitioner had sold their manufactured duty exempted cement at a price at least higher than their cost price / manufacturing expenses as mentioned in the cost duty sheet. That is how they have recovered several components of the expenses which are incurred. The reliance on the aspect of the payment of duty under protest or otherwise could be reflected from the annual audited account and that is how that is commented upon.
16 Thereafter a finding is rendered that the petitioner SRP 23/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc has passed on the duty paid on the clinker captively consumed in the manufacture of duty exempted cement to the consumers / buyers of the same.
17 It is in these circumstances that we are of the opinion that the findings rendered by the Deputy Commissioner are not only by considering some legal aspect which may arise during the course of dealing with factual matters and brought before him. These are findings rendered purely on the correctness of the approach of the petitioner-manufacturer. The basis on which the claim was made, the maintenance of accounts and practices prevailing in the market and particularly amongst manufacturers of cement are all referred to with a view to ascertain whether there is substantiation by the petitioner of its claim that it has not passed on the liability or incidence of duty on to the consumer. This is not a matter, as Mr. Ganesh would project, of the entire refund claim or substantial part of it pertains to payment of duty as a condition of pre deposit to avail the right of appeal. There is a very substantial portion based on the payment under protest. It is in relation to that, that the parties entered into detailed correspondence and produced voluminous documents. That is SRP 24/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc how the contents thereof have been analysed. They may not have been analysed strictly in accordance with the prevailing legal principles, according to the petitioners and emerging from precedents. They may or may not have been correctly applied, but surely this is not a matter which we can hold as raising only pure questions of law.
18 This is not an issue which we can decide only by considering whether any erroneous test of law has been applied. We will have to go into all the factual aspects and then alone find out which legal principle has application and the one that is applied was not applicable or otherwise. It is not that as a absolute proposition of law that the impugned order holds that assessee like the petitioners can avail of the refund provided a particular treatment is given in the accounts and essentially in the Profit & Loss Account. It is not whether the same has to be reflected only as receivable and there is no requirement to show that as a debit or a liability in the columns in that regard that has gone into consideration in the case before us. There are various principles of accounting and which have been invoked and applied, may be, according to the petitioners, erroneously. SRP 25/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 :::
OSWP2733.16.doc However, we do not think that such factual matters can be resolved by us in our limited jurisdiction and when it is not disputed that the alternate remedies are equally efficacious. 19 Once we have seen that this is not a case entirely based on refund of amounts deposited as pre deposit but there was a blend or mix of such sums with the amount paid under protest, then, all the more we do not think that the judgments on the point of a writ being maintainable despite availability of alternate efficacious remedy would be applicable in the facts of this case.
20 The order cited in the case of Aircel Ltd. by Mr. Ganesh would indicate that there the single argument and which was canvassed throughout was that questions and purely of law were raised. There is a finding of fact in paragraph 4 that as far as the legal issues are concerned, the facts brought on record and the contents of the documents are undisputed. It is in these circumstances that in the light of such undisputed facts and pure questions of law the High Court could have been entertained in writ jurisdiction. That is why the discretion exercised by the High SRP 26/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc Court was interfered with.
21 We are mindful of the fact that availability of an alternate equally efficacious remedy is not an absolute bar in entertaining a writ petition under Article 226 of the Constitution of India. It is not a prohibition but a rule of caution and prudence. Eventually everything must depend on facts and circumstances in each case. Therefore, no reliance can be placed on the decision of Aircel Ltd.'s case.
22 Even in the case of Paradip Port Trust it was undisputed that the sales tax was assessed when the argument was that there is a lack of legislative power in the State to impose sales tax. The whole argument centered around interpretation of sub clause (d) of clause 29-A of Article 366 of the Constitution of India. The factual aspect being undisputed and the issue resting solely on interpretation of this sub-clause that the High Court was found in error in rejecting the petition on the ground of availability of alternate equally efficacious remedy. Therefore, this case is also distinguishable on facts.
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OSWP2733.16.doc 23 Once we have taken the above view, then, it is not necessary to consider the other judgments relied upon by Mr. Ganesh. We think that the entire refund sought is not of an amount treated as pre deposit. M/s. Suvidhe Limited vs. UOI (supra) and Commissioner of Customs (Import) vs. M/s. Finacord Chemicals (Pvt.) Ltd. (supra) have no application. Equally we need not go into the aspects covered by the judgment in Commissioner of Central Excise vs. Allied Photographics (India) Limited (supra) as well.
24 For the reasons aforestated, we are of the opinion that these petitions cannot be entertained on the ground that there are factual issues involved. The mixed questions of fact and law are, therefore, capable of being properly resolved in the appellate remedies available to the petitioners under the scheme of the Central Excise Act. Relegating them to these remedies the writ petition is disposed of.
25 After having heard Mr. Ganesh and Mr. Anil Singh, learned Additional Solicitor General, we are of the opinion that the facts and circumstances in the case of Ambuja Cements SRP 28/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 ::: OSWP2733.16.doc Limited's case may not be exactly on par with the case dealt with, namely, ACC Limited, but Mr Ganesh concedes that more or less identical factual controversy and issue is involved. For the reasons that have pursuaded us not to entertain the petition filed by ACC Limited, even writ petition No.2734 of 2016 is disposed of on the ground that the petitioner therein as well has alternate equally efficacious remedy available to obtain the relief of refund. 26 We clarify that in both the matters there is no opinion expressed by us on the factual and legal controversy. Beyond noting the stand of both sides and referring to the rival contentions we have expressed no opinion on the correctness thereof or otherwise on the merits of the refund claim. They are all kept open for being raised in the appellate proceedings under the Act.
B.P. COLABAWALLA, J. S.C. DHARMADHIKARI, J. SRP 29/29 ::: Uploaded on - 17/01/2017 ::: Downloaded on - 27/08/2017 12:35:20 :::