Calcutta High Court
Indo American Electricals Ltd. vs Commissioner Of Central Excise on 30 January, 2002
Equivalent citations: 2002ECR938(CALCUTTA), 2002(143)ELT530(CAL)
Author: Amitava Lala
Bench: Amitava Lala
JUDGMENT Amitava Lala, J.
1. This writ petition is made challenging the order of the Deputy Commissioner, Central Excise, Durgapur-II Division, dated 6-6-2001. The impugned order is as follows :
"5.6 "Further, in regard to imposition of penal provision in this case for taking wrong Modvat credit by the said assessee, I find that the assessee have not suppressed the fact from the department regarding availment of Modvat credit on the strength of endorsed invoices and invoice cum challan issued by M/s. MMTC. Indore and entries to the effect have been made in the statutory books of accounts. The assessee have also produced the documents to their jurisdiction Range Supdt. of Central Excise for verification and defacement. I also find that this has happened during the transitional period when there was a shifting from the old Gate Pass System to newly introduced Invoice System. I, therefore, take a lenient view so far imposition of penalty is concerned in this case and refrain from imposing any penalty.
ORDER In view of the foregoing facts and circumstances, I disallow Modvat credit of Rs. 18,38,041.00 (Rupees Eighteen lac thirty eight thousand forty one only) availed by the said assessee in terms of Rule 57-1(1) of C.E.R., 1944 and as the said assessee have already utilized the said Modvat credit. I confirm demand of Central Excise duty to the extent of Rs. 18,38,041.00 in terms of Rule 57-1(1) of C.E.R., 1944 read with Section 11A of C.E.A., 1944 and direct them to pay the same within 30 (thirty) days of receipt of this Order, failing which they will be further required to pay interest @ 24% P.A. in terms of Section 11AA of C.E.A., 1944 till its recovery."
2. The company becomes sick industrial company by an order dated 8-8-2001. A demand has been made to pay the arrear amount of Rs. 18,38,041.00 by the Superintendent, Central Excise 'E' Range by an order dated 10-10-2001 with a further intimation that in case of failure within the prescribed time given thereunder a coercive measure will be initiated to realize the outstanding arrear in absence of any stay order from the competent authority. Neither the petitioners have made any application within the time prescribed under the law before the Commissioner of Central Excise nor the jurisdiction of the Tribunal was invoked from the decision or order passed by the Commissioner of Central Excise. Similarly, no prayer has been made for dispensation of any pre-deposit in connection thereto either before the Commissioner of Central Excise or before the Tribunal. Now, at this stage the writ jurisdiction has been invoked for the purpose of dispensation of pre-deposit and for the purpose of Condonation of delay for making an application either before the Commissioner of Central Excise or before the Tribunal.
3. The respondents have vehemently opposed this application even to the extent of Condonation of delay or dispensing the order of pre-deposit since it has to be made by the appropriate authority or the Tribunal under the relevant act. As a result whereof there is no occasion for the Court to enter into the merit of the matter even if there is a justifiable cause or not carrying out the order of the Deputy Commissioner, Central Excise, Durgapur-II Division. Therefore, the consideration of the Court is restricted only on the aforesaid grounds. Parties have argued at length. Even at the stage of admission of the writ petition/ the Court has gone through various judgments which have been cited by the respective Counsel appearing for the parties. A nine Judges Bench judgment of the Supreme Court (Mafatlal Industries Ltd. and Ors v. Union of India and Ors.) held that the High Court under Art. 226 of the Constitution of India must exercise its writ jurisdiction in consonance with the legislative intent manifested by the statutory provisions involved. Art. 226 of the Constitution of India is to be exercised to effectuate the regime of law and not to abrogate it. The clear intent of such judgment is not to interfere with the cases which ought to be decided by the forum under a given situation.
4. So far as the question of recovery of amount from the sick and industrial unit is concerned, two views are available on the basis of two Division Bench judgment of Madras and Allahabad High Court. The Madras High Court Division Bench in 1994 (72) E.L.T. 834 (Mad.) (Tamilnadu Chromates Ltd, v. Union of India) held that Excise duty collected on the excisable goods manufactured and cleared by the sick industry cannot be set aside for rehabilitation of the industry. Section 22(1) of Sick Industrial Companies (Special Provisions) Act, 1985 cannot be attracted. There the Madras High Court followed the ratio of the judgment of (Gram Panchayat and Am. v. Shree Vallabh Glass Works Ltd. and Ors.). In 1999 (105) E.L.T. 29 (All.) (Modi Industries Ltd. v. State of U.P.) a Division Bench of Allahabad High Court held that a recovery proceedings under the Sales Tax of a Sick Industrial Company under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 or Rehabilitation Scheme can be made as against the sick unit. However, this judgment is in respect of the Sales Tax not in respect of Central Excise. But the earlier judgment is well considered in the point and even in respect of the excise duty.
5. However, learned Counsel appearing for the petitioners contended that the nine Judges Bench of the Supreme Court of India (supra) cannot be applicable because such judgment is factually different in merit. There the claim of refund has been taken note of unlike the present one which is apparent from the order itself. In any event, the learned Counsel appearing for the petitioners also contended that they could have taken the matter before the authority at the appropriate point of time but due to change of management the point could not have been taken before the authority who has no power to extend such time as per Section 35 of the Central Excise Act, 1944.
6. According to me for the condonation of delay the principle as laid down under the Limitation Act or prescribed under the law will be strictly applicable. But that does not necessarily mean that question of sub-stansive law will be ignored when somebody will come forward with a positive case with an appropriate explanation even after the expiry of the period so fixed before an authority/tribunal/court. The learned Counsel appearing for the petitioners contended that under Section 35 of the Act, Commissioner of Central Excise has no power to extend the time period beyond six months. Original time period is three months and by way of extension for a period of further three months (from 11-5-2001 a period of 30 days is prescribed in the place and instead of further three months as aforesaid). Such period will have to be expired from the date of the order of the Deputy Commissioner, Central Excise as on 6-6-2001 or subsequently from the date of communication. According to me, the writ court cannot proceed on the basis of any apprehension or conjecture. It should be appropriate for the petitioners to make an application before the Commissioner of Central Excise and if failed, the jurisdiction of the Tribunal will be invoked. The power of extension of the period has clearly been given and a company having all experienced people with knowledge of law cannot said to be ignorant like rustic villagers in applying the same. However, an order of dispensation of pre-deposit or Condonation of delay can be passed principally keeping with a view to 9 Judges Bench judgment of the Supreme Court as above whatever might have been the merit of such case.
7. Thus, I dismiss the writ petition. There will be no order as to costs.
8. This order will not prevent the writ petitioners either to invoke the jurisdiction of the Commissioner of Central Excise or the Tribunal as prescribed under Section 35 and/or 35(a) of the Central Excise Act, 1944.
9. Let urgent Xerox certified copy of this order, If applied for, be given to the learned Counsel for the petitioners within 15 days from the date of putting the requisite.