Gujarat High Court
E I Dupont India Private Limited vs Union Of India on 1 October, 2018
Author: Anant S. Dave
Bench: Anant S. Dave, Biren Vaishnav
C/SCA/3540/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 3540 of 2015
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E I DUPONT INDIA PRIVATE LIMITED
Versus
UNION OF INDIA
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Appearance:
MR P P MAJMUDAR(5284) for the PETITIONER(s) No. 1,2
MR SP MAJMUDAR(3456) for the PETITIONER(s) No. 1,2
MR DHAVAL D VYAS(3225) for the RESPONDENT(s) No. 2
MR RJ OZA(520) for the RESPONDENT(s) No. 1,3,4
MRS VD NANAVATI(1206) for the RESPONDENT(s) No. 5,6
RULE SERVED BY DS(65) for the RESPONDENT(s) No. 1,3,4,6
RULE UNSERVED(68) for the RESPONDENT(s) No. 5
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CORAM: HONOURABLE MR.JUSTICE ANANT S. DAVE
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
Date : 01/10/2018
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE ANANT S. DAVE)
1. Heard Mr. P.P. Majmudar, learned advocate for the petitioner and Mr. Dhaval D Vyas, learned advocate for respondent no. 2.
2. At the outset, this petition is disposed of by taking note that Civil Appeals No. 9620 to 9624 of 2016 are pending before the Supreme Court of India whereby order dated 25.10.2013 passed in Special Civil Applications No. 14917 to 14921 of 2013 by the Division Bench of this court is under challenge.
3. On 27.09.2018, this court was constrained to pass the Page 1 of 7 C/SCA/3540/2015 ORDER following order:
1. This petition under Articles 226 and 265 of the Constitution of India is filed by the petitioners against the respondents, specifically with a prayer against respondent nos.3 to 6, which reads as under:-
"33. .....
(A) YOUR LORDSHIPS maybe pleased to issue a writ of prohibtion or a writ in the nature of prohibition or any other appropriate writ, order or directions quashing and setting aside the impugned show cause notice F.No.V (Ch.54)3-169/Dem/Adj./JC-
DMN/2014-15dated 18.02.2015 issued by respondent No.4 (at ANNEXURE-F hereto); (B) During the pendency and final disposal of the present petition YOUR LORDSHIPS may be pleased to stay further proceedings of the impugned show cause notice F.No.V (Ch.54)3-169/Dem/Adj./JC-
DMN/2014-15 dated 18.02.2015 issued by respondent No.4 (at ANNEXURE-F hereto);"
2. Brief facts narrated herein will unravel executive arbitrariness, willful and deliberate disregard to the order dated 25.10.2013 passed in Special Civil Application No.14917 to 14921 of 2013 by a Division Bench of this Court. Further, impugned show cause notice dated 18.2.2015 issued by respondent no.4 discloses brazen exercise of powers which were not available.
3. Upon a careful perusal of earlier order dated 25.10.2013 passed by this Court in Special Civil Application No.14917 of 2013 and allied matters, show cause notice dated 18.2.2015 and, in addition to above, bald and bold assertion made in affidavit-in-reply filed on behalf of respondent nos.1 to 6 dated 2.4.2015, by Deputy/Assistant Commissioner, Central Excise, Custom and Service Tax, Region-Umbergaon, there is no room for doubt that order dated 25.10.2013 passed by Division Bench in a writ petition was not only accepted but refund claim of the petitioner was also sanctioned on 20.2.2014. In addition to above, on 26.6.2014 instructions were issued by Central Board of Excise and Customs, Department of Revenue, Ministry of Finance, Government of India, whereby all Chief Commissioners of Central Excise and Service Tax and all Chief Commissioners of Customs were given instructions Page 2 of 7 C/SCA/3540/2015 ORDER with regard to judicial discipline to be followed in adjudication proceedings. In the above instructions, it is referred that for not following the binding precedent, the petitioner was subjected to litigation before the Supreme Court in which a serious view was taken. Lastly, such instructions were to be followed by all adjudicating authorities under the jurisdiction of Commissionerates scrupulously.
4. Inspite of above fact, Joint Commissioner, Central Excise, Customs and Service Tax, Daman, respondent no.4 once again resurrected the subject issue viz. refund claim submitted by the petitioner under Rule 5 of the Cenvat Credit Rules, 2004 and CBEC Notification dated 18.6.2012 in super-session of earlier Notification No.5 of 2006 dated 14.3.2006 in respect of cenvat credit on inputs used in the manufacture of products exported.
5. After reproducing details of the claim and Rule 5 of the Cenvat Credit Rules, 2004, the authority in paragraphs 7, 8, 9 and 10 considered and dealt with nature of order passed by this Court on 25.10.2013. The authority also noticed filing of SLP No.12049 and 12053/2014 by the department on 21.8.2014 before the Supreme Court of India against order dated 25.10.2013.
6. After referring to Rule 5 of Cenvat Credit Rules, 2004 as well as Rule 19 of Central Excise Rules, 2002, refund sanctioned to the claimant, according to the officer, consequent upon the High Court's order was erroneous and required to be recovered from the claimant under Section 11A of the Central Excise Act, 1944, hence, the petitioners were asked to explain and/or to make submissions whether they desire to be heard in person.
7. Now, we refer to the affidavit-in-reply filed on behalf of respondent no.1, wherein the deponent has justified the above show cause notice, wherein a reference is made that order dated 25.10.2013 passed by the High Court was not acceptable on merit and, hence, SLP was filed challenging the above order in which the Supreme Court of India had issued notice. Further averments were made about the next date of hearing of SLP. In paragraph 4.2 of the affidavit-in-reply, the deponent made categorical statement that the authority has not accepted the order dated 25.10.2013 passed by this Court on merit since SLP was Page 3 of 7 C/SCA/3540/2015 ORDER preferred. It is also averred that impugned show cause notice is not contrary to law and made further averments about non-availability of refund to the petitioner on supply of goods to 100% export oriented unit and decision in earlier case of M/s.NBM Industries had no binding nature since the said decision involved low revenue. Inspite of the fact that Special Civil Application No.14917 of 2013 and allied matters were taken up for final disposal when learned Standing Counsel for the department was present, averments are made in paragraph 5.5 by the deponent that no time and opportunity was given to the department to file the affidavit. Repeatedly reference of pending SLP is made and that right of the department to prefer SLP before the Supreme Court cannot be questioned and, hence, proceedings under the Contempt of Courts Act and the Rules made thereunder are ruled out.
8. Thereafter, rejoinder and sur-rejoinder are filed by the petitioners and the respondent authorities but at the same time, barring the admissibility of refund of cenvat credit in cases of goods exported under Rule 5 and pendency of SLP, hardly anything is stated which is worth referring.
9. After issuance of notice on 8.9.2015, considering the fact that the matter requires consideration Rule was issued to be finally heard on 4.11.2015 and the impugned show cause notice dated 18.2.2015 was stayed.
10. On previous dates, this Court provided an opportunity to respondent no.4 to withdraw the impugned show cause notice since on the face of it, it was contrary to the order dated 25.10.2013 passed by this Court. Today also, stand of the department on the above aspect is not clear. Today, Mr.Rajiv Vyas, Superintendent and Mr.Munim Singh, Assistant Commissioner of different divisions are present in the Court.
11. A careful perusal and consideration of order passed in SLP, reveals that delay was condoned and notice was made returnable on 10.10.2014 and almost 3 years and 11 months have passed thereafter, however, the Apex Court has not passed any further order. Thereafter, another order was passed to list the matter on 24.2.2015 for final disposal. Even Intervention Application Nos.6-10/2015 preferred in Civil Appeal Nos.9620-9624/2016 challenging Page 4 of 7 C/SCA/3540/2015 ORDER the present proceedings of this writ petition also came to be dismissed and counsel for the appellant was directed to file affidavit of valuation with required Court fees within four weeks.
12. Having complied with order passed by this Court on 25.10.2013, by allowing the refund claim of the petitioner and also issuing instructions to obey judgments of the Court and orders of higher authorities, issuance of impugned show cause notice, contents therein and averments made on oath in affidavit, which we have referred earlier, and though opportunity was given to withdraw show cause notice, challenging the proceedings of this writ petition being Special Civil Application No.3540 of 2015 before the Apex Court by filing Intervention Application Nos.6-10/2015 discloses the act on the part of the respondent no.4 not only to over-reach the proceedings of this Court but exhibits blatant disregard to the order dated 25.10.2013 and considering the instructions issued by CBEC dated 26.6.2014 and issuance of show cause notice for re-adjudication of the matter by invoking provisions of Section 11A of the Central Excise Act, prima facie, we are of the considered view that respondent no.4 has deliberately and willfully disregarded and disobeyed order passed by this Court on 25.10.2013. Section 14 of the Contempt of Courts Act, 1971 provides for procedure where contempt is in the face of the Supreme Court or a High Court and procedure is to be followed as provided in Sub-section (1), Clauses (a), (b), (c) and (d) of Section 14 and specific charge is framed against respondent no.4 that while exercising administrative powers binding law of the land so declared by this Court and the Supreme Court to which reference was made in the order dated 25.10.2013 where a Division Bench of this Court has taken a serious view of the attitude and attempt made by the authority, has been deliberately and willfully disregarded and disobeyed by respondent no.4. Repeatedly, such exercise now under challenge before this Court cannot be termed either mistake or an error, particularly, when counsel appearing on behalf of the department earlier communicated requirement of due compliance of order.
13. Before issuing notice under the Contempt of Courts Act, 1971 since we are not satisfied by the pleadings filed in the form of affidavit-in-reply or sur-rejoinder, we direct the author of show cause notice to remain personally Page 5 of 7 C/SCA/3540/2015 ORDER present before this Court on 1.10.2018 at 11 O' clock sharp. This order is pronounced in the open Court in presence of learned Standing Counsel appearing for the department, and the officers, who are present in the Court, shall communicate in writing the requirement of author of the show cause notice to remain personally present before this Court on the next date of hearing. Adjourned to 1st October 2018."
3. Today, Mr. Vinay Pratap Singh, the author of the show- cause notice impugned in the petition is present before this court and upon instructions received from Mr. Virendra Chaudhary, IRS, Commissioner, Central Excise, Surat, a statement is made today in the court that subject to outcome of Civil Appeals No. 9620 to 9624 of 2016, impugned show- cause notice No. F.No.V (Ch.54)3-169/Dem/Adj./JC- DMN/2014-15 dated 18.02.2015 is withdrawn. The above withdrawal shall have no bearing either on pending Civil Appeals before the Supreme Court of India or upon their outcome i.e. final disposal of those Civil Appeals. The action that may be taken against the petitioner in case if such Civil Appeals are allowed including seeking an amount of refund already paid to the petitioner back and also to take action under Section 11A of the Customs and Excise Act for which any constraint of time limitation shall not come in the way of the appropriate authority.
4. As the decision is already taken to withdraw the impugned show-cause notice dated 18.02.2015 issued by respondent no. 4 at this stage, no further issue deserves to be adjudicated. Observations made in oral order dated 27.09.2018 against the author of impugned show cause notice dated 18.02.2015 shall not be construed in any manner as it is submitted that the officer has acted bonafidely in ordinary Page 6 of 7 C/SCA/3540/2015 ORDER course of discharge of his duty for which unconditional apology is tendered in the court. Order accordingly. Petition is disposed as withdrawn. Notice is discharged.
(ANANT S. DAVE, J) (BIREN VAISHNAV, J) DIVYA Page 7 of 7