Madras High Court
Vanavil Dyes And Chemicals Ltd. vs Collector Of C. Ex., Madras on 23 February, 1996
Equivalent citations: 1996(88)ELT318(MAD)
Author: A.R. Lakshmanan
Bench: A.R. Lakshmanan
ORDER
1. By consent of both parties, the main writ petition itself is taken up for hearing. I have heard Mr. R. Sashidharan for the petitioner and Mr. K. Jayachandran for the respondents.
2. The writ petition has been filed for a mandamus, calling for the records of the 1st respondent in his Order No.27/95, dated 9-8-1995 and quash the same and direct the respondents to refund the sum of Rs. 6,84,590/-, being the claim for rebate of duty due in terms of order in Appeal No.133/94(M), dated 16-5-1994 of the 3rd respondent.
3. The petitioner is a public limited company and a leading manufacturer of Dyes and Chemicals. They cleared a quantity of 2000 kgs. of Cresol Chloride falling under Chapter Heading 3204.29 on payment of duty of Rs. 5,35,500/- under GP 1 No.20 dated 29-12-1990 to M/s. Colour Chem, Thane. The abovesaid quantity was debited in their RG 23A Part II - vide Serial No.94 dated 29-12-1990, as prescribed under the Central Excise Rules, 1944. M/s. Colour Chem Ltd., Thane, received the said goods in their factory as an input and took credit of the duty paid on the said goods under Rule 57A of Central Excise Rules. The credit was taken in their RG 23A Part II. M/s. Colour Chem Limited, Thane, after a lapse of one year and ten months cleared the abovesaid goods under Rule 57F(1)(ii) of the Central Excise Rules, 1944, to the petitioner under GP 1 No.74, dated 10-11-1992 on payment of duty of Rs. 6,90,000/-. The petitioner, by their letter EXE/Accts/92-93/3801, dated 20-11-1992 requested permission from the Assistant Collector, Pondicherry Division for re-entry of 2000 kgs. of Cresol Chloride cleared by them originally under their GP 1 No.20, dated 29-12-1990 to M/s. Colour Chem Limited, Thane. They have also requested permission for reprocessing the said goods. The petitioner has also filed the necessary D-3 intimation No.2, dated 21-11-1992 under Rule 173H.
4. The Assistant Collector of Central Excise, Pondicherry Division, granted permission under Rule 173H by his order dated 20-11-1992, communicated by his letter dated 30-12-1992. At the time of clearance for export, duty was found to have been paid by them on 5000 kgs. of Cresol Chloride produced in their factory and no duty was paid by them on 2000 kgs. of Cresol Chloride received from M/s. Colour Chem Limited, Thane. The petitioner thereupon filed a rebate claim in the proper form under their letter dated 11-1-1993 claiming a sum of Rs. 17,11,476/- and also a sum of Rs. 6,84,590/- being the duty payable on 2000 kgs. of Cresol Chloride, which was paid by M/s. Colour Chem Limited, Thane, at the time of clearance of the said inputs on 10-11-1992. The petitioner was directed to show cause to the 2nd respondent by a letter dated 21-9-1993 as to why the sum of Rs. 6,84,590/- being the duty claimed on 2000 kgs. of Cresol Chloride should not be rejected, granting a sum of Rs. 17,11,476/- being the duty on 5000 kgs. of Cresol Chloride under Notification NO. 197/62, dated 17-11-1962 issued under Rule 12 of the Central Excise Rules.
5. The Show cause notice was based mainly on three allegations, viz., (1) The petitioner is not eligible to bring back 2000 kgs. to its factory under Rule 173H(2), the description of the goods mentioned in the Delivery Challan No.3025 dated 11-9-1992 of M/s. Colour Chem Limited at the time of sale to the petitioner and the description in AR4 No.30 dated 26-11-1992 under which the said goods were exported do not agree and the goods exported were found to be not in original packed condition as received into the factory since 2000 kgs. received by the petitioner were packed in 200 bags of 10 kgs. each whereas the 7000 kgs. including 2000 kgs. were exported in 140 drums of 50 kgs. each.
6. The petitioner submitted a detailed reply and also further written submissions and were also personally heard. The 2nd respondent by his order dated 20-12-1993 rejected the claim for rebate of Rs. 6,84,590/- claimed by the petitioner on 2000 kgs. of Cresol Chloride solely on the ground that the goods on which rebate was claimed were not in their original packed condition as required under Notification No.197/62. The 2nd respondent has allowed a rebate of Rs. 17,11,487/-. The petitioner filed an appeal under Section 35 of the Central Excises and Salt Act (hereinafter referred to as the Act) against the order of the 2nd respondent to the extent the order disallowed the claim for rebate of Rs. 6,84,590/-, before the Collector of Central Excise (Appeals), Madras. The Appellate Authority by his order No. 133/94(M), dated 16-5-1994, upheld the contentions of the petitioner and set aside the order of the 2nd respondent and directed consequential relief.
7. The 3rd respondent filed a review application under Section 35EE of the Act for review of the order of the Appellate Authority, before the 1st respondent. The 1st respondent issued a show cause notice dated 20-10-1994 calling upon the petitioner to show cause as to why the Order-in-Appeal No.133/94(M), dated 16-5-1994 of the Appellate Authority should not be annulled and set aside. The review application was mainly on the question of facts. A personal hearing was granted to the petitioner before the 1st respondent and the 1st respondent by his Order No.27/95, dated 9-8-1995 set aside the order of the Appellate Authority and restored the order of the 2nd respondent and has disallowed the claim for rebate of Rs. 6,85,590/- claimed by the petitioner. It is against this order, the petitioner has filed the present writ petition.
8. According to Mr. R. Sashidharan, learned Counsel for the petitioner, the order passed under Section 35EE of the Act is final and there is no appeal provided under the Act. Further, the 1st respondent has exceeded the powers of revision under Section 35EE of the Act. He has ignored the time limit prescribed by the Act and has gone into the question of facts, which is unsustainable. Therefore, the petitioner is compelled to come before this Court for the relief asked for in this writ petition.
9. Section 35EE of the Act reads as follows :-
"35EE. Revision by Central Government. - (1) The Central Government may, on the application of any person aggrieved by any order passed under Section 35A, where order is of the nature referred to in the first proviso to sub-section (1) of section 35B, annul or modify such order.
Explanation. - For the purposes of this sub-section, 'order passed under section 35A' includes as order passes under that section the commencement of section 47 of the Finance Act, 1984, against which an appeal has not been preferred before such commencement and could have been, if the said section had not come into force, preferred after such commencement, to the Appellate Tribunal.
(2) An application under sub-section (1) shall be made three months from the date of the communication to the applicant of the order against which the application is being made :
Provided that the Central Government may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the aforesaid period of three months, allow it to be presented within a further period of three months.
(3) An application under sub-section (1) shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf and shall be accompanied by a fee of two hundred rupees.
(4) The Central Government may, of its own motion, annul or modify any order referred to in sub-section (1).
(5) No order enhancing any penalty or fine in lieu of confiscation or confiscating goods of greater value shall be passed under this section, -
(a) in any case in which an order passed under Section 35A has enhanced any penalty or fine in lieu of confiscation or has confiscated goods of greater value; and
(b) in any other case, unless the person affected by the proposed order has been given notice to show cause against it within one year from the date of the order sought to be annulled or modified.
(6) Where the Central Government is of opinion that any duty of excise has not been levied or has been short-levied, no order levying or enhancing the duty shall be made under this section unless the person affected by the proposed order is given notice to show cause against it within the time limit specified in section 11A."
10. It is contended by the learned Counsel for the petitioner that the revision application filed under Section 35EE(1) of the Act itself was time barred and this was one of the grounds taken by the petitioner before the 1st respondent in the revision proceedings. It is further contended that the powers of review can be exercised by the Central Government only in cases where questions of law arise and further, there can be no revision on the basis of fresh grounds being beyond the scope of the original show cause notice.
11. Even though the matter was argued on merits by both sides, I am not inclined to go into the merits of the rival claim for the simple reason that the writ petition can be disposed of on the question of limitation. I have also perused the counter affidavit filed by the respondents and also the records placed before this Court in the form of typed set.
12. As seen earlier, the Collector of Central Excise (Appeals) by his order dated 16-5-1994 set aside the order impugned before him and allowed the appeal filed by the petitioner herein with consequential benefits. Under Section 35EE(1), the Central Government may, on the application of any person aggrieved by any order passed under Section 35A, annul or modify such order. Section 35EE(2) provides that an application under sub-section (1) shall be made within three months from the date of the communication to the applicant of the order against which the application is being made : Provided that the Central Government may, if it is satisfied that the applicant was presented by sufficient cause from presenting the application within the aforesaid period of three months, allow it to be presented within a further period of three months. Section 35EE(4) provided that the Central Government may, of its own motion, annul or modify any order referred to in sub-section (1).
13. The Collector of Appeals, Madras has passed an order on 16-5-1994 and the same was received by the 3rd respondent on 20-5-1994. The three months time provided under Section 35EE(2) of the Act expires by 20-8-1994. However, the 3rd respondent by their letter C.No.V/32/2/90/94 JC dated 20-9-1994 presented a revision under Section 35EE(4) of the Act. After narrating the facts of the case, the 3rd respondent requested the 1st respondent/revisional authority to revise the order of the Collector of Appeals, Madras.
14. It is contended by Mr. K. Jayachandran, learned Counsel for the respondents, that since the revision was filed under Section 35EE(4) of the Act, the Central Government may, of its own motion, annul or modify any order referred to in sub-section (1). According to him, the Central Government has now exercised its power under Section 35EE(4) of the Act and therefore, the said order cannot be a subject matter of any writ petition. I am unable to agree with the contention of Mr. K. Jayachandran. As rightly pointed out by Mr. R. Sashidharan, the Central Government has not suo motu taken the matter on its file. On receipt of the revision application, on 20-10-1994, a show cause notice was issued to the petitioner under Section 35EE of the Act calling upon the petitioner to show cause as to why the order in Appeal No.133/94(M) dated 16-5-1994 passed by the Collector of Central Excise (Appeals), Madras be not annulled and set aside and the petitioner was asked to state its objections in writing and also to state whether the petitioner was asked to state its objections in writing and also to state whether the petitioner would be heard in person before the case is decided. On receipt of the said notice, the petitioner by their reply dated 10-2-1994 objected to the maintainability of the revision application. It is contended on behalf of the petitioner that the revision application is time barred in terms of Section 35EE of the Act and is contrary to law and facts. It was submitted that the application for revision has been made under Section 35EE(1) and not under Section 35EE(4) of the Act as mentioned erroneously in the revision application, on the basis of which the show cause notice had been issued.
15. Section 35EE(2) of the Act prescribes that an application under sub-section (1) shall be made within three months from the date of the communication to the applicant of the order against which the application is being made. Admittedly, copy of the order in Appeal No.133/94 passed by the Collector of Central Excise (Appeals), Madras, was received in the Office of the 3rd respondent on 20-5-1994. As per the statutory time prescribed, the last date for filing an application under Section 35EE(1) before the Central Government was 20-8-1994. The revision application itself is dated 20-9-1994 and has been received in the Office of the 1st respondent only on 10-10-1994. Hence, there was a delay of one month and 20 days. Therefore, it is submitted that the application itself was not admissible having been filed beyond the statutory time limit of three months. It is, therefore, submitted by the learned Counsel for the petitioner, that on this ground alone the proceedings must be dropped in limine.
16. Without prejudice to the above contention, other submissions were also made on merits. The 1st respondent by its order dated 9-8-1995 decided the case on merits and also held that the review application having been made within the stipulated period of extendable time limit under Section 35EE(2) of the Act, it within time and the plea regarding review being time bared was rejected. The 1st respondent has also for the reasons stated in the order set aside the Order-in-Appeal No.133/94(M), dated 16-5-1994 and restored the Maritime Collector's Order-in-Original in C.No. V/32/18/1/93-E.C., dated 20-12-1993.
17. As stated already, though the matter was argued on merits, I am not inclined to go into the rival claims made by the respective parties as I propose to dispose of the matter on the question of maintainability of the revision before the 1st respondent without as application to condone the delay under Section 35EE(2) of the Act.
18. At the outset, I state that the application for revision has been made under Section 35EE(1) and not under Section 35EE(4) as contended by Mr. K. Jayachandran. As already seen, a show cause notice was issued to the petitioner on receipt of the revision application under Section 35EE(4). Section 35EE(2) prescribes that an application to that effect shall be made within three months from the date of communication to the applicant of the order against which the application is being made. As per the statutory time limit prescribed, the last date for filing a revision under Section 35EE(2) before the 1st respondent was 20-8-1994, but the same was received by the 1st respondent only on 10-10-1994. Therefore, the disposal of the revision application, though according to the respondents, it was made under Section 35EE(4), without giving an opportunity to the petitioner to put forth his objections on the question of maintainability of the application under Section 35EE(4), cannot at all be countenanced. The reasons given by the 1st respondent in entertaining the revision without assigning any reason is not at all satisfactory. Hence, as rightly contended by the learned Counsel for the petitioner, the application as presented was not admissible, having been filed beyond the statutory time limit of three months.
19. This apart, it is also contended that the revision can only be on question of law and not on question of fact. No reasons have been given by the 1st respondent to differ from the appellate authority's view. Therefore, I set aside the order impugned in toto and remit the matter to the 1st respondent for fresh consideration on the question of maintainability of the revision application and also on merits. The 1st respondent shall return the papers filed in the form of revision to the 3rd respondent with liberty to represent the same with an application under the Proviso to Section 35EE(2) of the Act. On receipt of such application, the 1st respondent shall give an opportunity to the petitioner to put forth their objections on the question of delay and then decide the matter after affording sufficient opportunity to both parties either to appear in person or through their counsel. The writ petitioner is allowed as indicated above. No costs.