Gujarat High Court
Messrs Newage Industries (Unit I And ... vs Union Of India on 26 June, 2019
Author: J.B.Pardiwala
Bench: J.B.Pardiwala, A.C. Rao
C/SCA/10936/2019 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 10936 of 2019
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MESSRS NEWAGE INDUSTRIES (UNIT I AND UNIT II)
Versus
UNION OF INDIA
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Appearance:
AMAL PARESH DAVE(8961) for the Petitioner(s) No. 1,2
MR PARESH M DAVE(260) for the Petitioner(s) No. 1,2
for the Respondent(s) No. 1,2
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CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
and
HONOURABLE MR.JUSTICE A.C. RAO
Date : 26/06/2019
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA)
1. The subject matter of challenge in this writ-application is the order passed by the respondent No.2, i.e. Commissioner of Central Excise and CGST, Bhavnagar.
2. The operative part of the impugned order passed by the respondent No.2 reads thus:
"(1) I confirm the demand of Rs.89,23,350/-
(Rupees Eighty Nine Lakhs Twenty Three Thousand Three Hundred and Fifty only) (Basic C.Ex. Duty 86,63,447=2% Education Cess 173269/+1% S&HEd. 86,634/- Cess) as shown in Annexure A to this Order under Section 11A of the Central Excise Act, 1944 fromm M/s Newage Industries, Surendranagar w.r.t.
Page 1 of 5 Downloaded on : Thu Jul 11 03:38:54 IST 2019 C/SCA/10936/2019 ORDERRespect of clearance of goods under non returnable gate passes and drop the demand of Rs. 41,20,904/- out of total demand of Rs. 1,30,44,254/-.
(2) I order recovery of interest in respect of Central Excise duty as mentioned at Sr. No. (1) from M/s Newage Industries, Surendranagar under Section 11AB/11AA of the Central Excise Act, 1944.
(3) I impose penalty of Rs.89,23,350/- (Rupees Eighty Nine Lakhs Twenty Three Thousand Three Hundred and Fifty only) upon the Noticee No.1 i.e. M/s. Newage Industries, Surendranagar under Section 11AC of the Central Excise Act, 1944 for clandestine clearance of goods under non returnable gate passes.
(4) I confirm the demand of Central Excise duty of Rs. 1,77,33,712/- (Rs. 1,72,17,196/- as Central Excise duty, Rs. 3,44,344/- as Ed Cess and Rs. 1,72,172/- as S&H Ed Cess, in respect of clandestine clearance of Fire Fighting Vehicles, to be recovered from the Noticee No.1 i.e. M/s Newage Industries, Surendranagar under the provisions of sub section (1) of section 11A of the Central Excise Act, 1944;
(5) I order recovery of interest in respect of Central Excise duty as mentioned at Sr. No. (2) from the Noticee No.1 i.e. M/s Newage Industries, Surendranagar under Section 11AB/11AA of the Central Excise Act, 1944.
(6) I impose penalty of Rs. 1,77,33,712/- (Rupees One Crore Seventy Seven Lakhs Thirty Three Thousand Seven Hundred and Twelve only) in respect of Central Excise duty as mentioned at Sr. No. (2) upon the Noticee No.1 i.e. M/s. Newage Industries, Surendranagar under Section 11AC of the Central Excise Act, 1944.
(7) I impose penalty of Rs.5,00,000/- (Rupees Five Lakhs only) upon Noticee 2 i.e. Shri Ashok Shah under Rule 26 of the Central Excise Rules, 2002."
3. We take notice of the fact that the impugned order Page 2 of 5 Downloaded on : Thu Jul 11 03:38:54 IST 2019 C/SCA/10936/2019 ORDER passed by the respondent No.2 is an appealable order under Section 35(B) of the Central Excise Act, 1944. An appeal would lie before the Appellate Tribunal. We also took notice of the provisions of Section 35(F) of the Act, 1944. The same is with respect to deposit of certain percentage of duty demanded or penalty imposed before filing an appeal. As provision for statutory appeal has been provided against the impugned order passed by the Commissioner, we called upon Mr. Dave to explain why we should not relegate his client to prefer an appeal before the Tribunal. Mr. Dave, the learned counsel appearing for the writ-applicant, submitted that three principal submissions going to the root of the matter were canvassed and have been noted by the Commissioner in his impugned order, but at the same time, they have not been dealt with in any manner. According to him, the gist of his three principal submissions is as under:
"1. A Fire Fighting Vehicle comes into existence as a result of body building/body work and no "equipment"
are used in such fabrication; and this proposition is upheld by the Appellate Tribunal in case of Speedcrafts Ltd. V/s. Commissioner of Central Excise dealing with the same exemption Notification and similar special purpose motor vehicles.
2. Three qualified Engineers have reported and certified that no "equipment" were used by the Petitioner in body building/body work of fire fighting vehicles, but these reports and certificates of qualified Page 3 of 5 Downloaded on : Thu Jul 11 03:38:54 IST 2019 C/SCA/10936/2019 ORDER persons are not considered, and it is also not clarified which "equipment" were used by the Petitioner for fire fighting vehicles."
4. Mr. Dave invited our attention to para 10.4, 11.1, 12.1 and 12.3 of the impugned order. We take notice of the fact that all the submissions canvassed before the Commissioner have been noted in the said paras. According to Mr. Dave, since the principal submissions going to the root of the matter have not been dealt with by the Commissioner, the impugned order could be termed as violative of the principles of natural justice. If that be so, according to Mr. Dave, this petition may be entertained without asking the writ-applicant to prefer an appeal before the Appellate Tribunal. In support of such submission, Mr. Dave has placed strong reliance on a decision of this Court in the case of Vadilal Gases Ltd. Vs. Union of India, reported in 2016 (332) ELT 625 (Guj.).
5. He also placed reliance on the following decisions:
(i) Manek Chemicals Pvt. Ltd. V/s. Union of India 2016(334) ELT 302 (Guj.)
(ii) Kranti Associates Pvt. Ltd. V/s. Masood Ahmed Khan 2011(273) ELT 345 (S.C.)
(iii) Reliance Cellulose Products Ltd. V/s. Collector of C.Ex., Hyderabad 1997(93) ELT 646 (S.C.) Page 4 of 5 Downloaded on : Thu Jul 11 03:38:54 IST 2019 C/SCA/10936/2019 ORDER
(iv) Standard Dye Chem. Surat- 1 and another V/s.
Union of India and others 1980 (6) ELT 181 (Guj.)
6. Having regard to the submissions of Mr. Dave, let notice be issued to the respondents, returnable on 24.07.2019. The respondent No.2 shall be served directly. Notice to the respondent No.1 shall go through the court.
7. Having heard Mr. Dave, the learned counsel appearing for the writ-applicant, and having gone through the materials on record, we are of the view that the writ-applicant has been able to make out a strong prima facie case to have an interim order in his favour. We direct the respondents that they shall not take any coercive steps with regard to recovery of the duty, interest and penalty amount till the next returnable date.
Direct service is permitted.
(J. B. PARDIWALA, J) (A. C. RAO, J) MAYA Page 5 of 5 Downloaded on : Thu Jul 11 03:38:54 IST 2019