Bombay High Court
Godrej And Boyce Mfg. Co. Pvt. Ltd. vs Union Of India (Uoi) on 2 August, 1991
Equivalent citations: 1991ECR136(BOMBAY), 1991(56)ELT62(BOM)
JUDGMENT M.L. Pendse, J.
1. By this petition filed under Article 226 of the Constitution of India, the petitioners are challenging legality of show cause notice dated March 29, 1984 issued by the Assistant Collector of Central Excise, calling upon the petitioners to show cause why action should not be taken in accordance with provisions of Section 11A(1) of the Central Excise Act in respect of escaped duty between period commencing from January 5,1981 and ending with February 29,1984. The short-levy alleged is of Rs. 7,77,59,992.27 and the show cause notice claims that the Company suppressed the relevant information. The information alleged to have been suppressed is that the refrigerators were sold without including the maintenance charges recovered for duration of four years under the nomenclature of 'service contract'.
2. The principal contention urged by Shri Hidayatullah, learned Counsel appearing on behalf of the petitioners, is that the service contract for maintenance of the refrigerators is entered into for duration of four years and this service rendered can never form part of the assessable value for determination of the levy of excise duty. According to the learned Counsel these charges are clearly post-sale charges and consequently cannot form part of the assessable value. Shri Hidayatullah relied upon decision of the Supreme Court (Collector of Central Excise v. Kelvinator of India Ltd.) in support of the submission. Shri Sethna, learned Counsel appearing on behalf of the Department on the other hand submitted that the show cause notice requires determination at the hands of the Department because there are several circumstances and material in possession of the Department to establish that the claim of the Company that service contract for duration of four years was optional is not correct. Shri Sethna submitted that the material at least prima facie establishes that the amount recovered by the Company under the service contract forms part of the assessable value. It was contended that though it is claimed that the service contract was optional, in fact it was not so and the customer was compelled to enter into such contract at the time of sale of the refrigerator. Shri Sethna invited our attention to the material in possession of the Department in support of his submission.
3. After considering the contention urged by Shri Sethna and Shri Hidayatullah, we have no hesitation in concluding that this is not a matter where the Court should exercise jurisdiction under Article 226 of the Constitution of India and stifle the investigation. From the material to which our attention was invited by Shri Sethna, it cannot be stated that the proceeding under the show cause notice proceed without any evidence whatsoever. It is not for this Court to assess the sufficiency of evidence or whether the evidence available with the Department should be accepted or not. It is open for the petitioners to file any effective reply to the material available to the Department and if necessary to cross-examine the witnesses on whose statements the Department is relying. In these circumstances we decline to exercise our writ jurisdiction and examine whether the show cause notice should be struck down. It is now well-settled that issuance of show cause notice can be quashed only on the ground that it was wholly without jurisdiction or it was issued without any material whatsoever available with the Department. Both the contingencies are not in existence in the present case and consequently the petitioners cannot seek relief in writ jurisdiction.
4. Shri Hidayatullah submitted that the dispute involved is over Rs. 18 crores and the petitioners have reasonable apprehension that the Department is biased against the petitioners and is not likely to render justice. The learned Counsel submitted that from the trend of affidavits filed by the three officers of the Department in the present proceedings, it should be obvious that the petitioners have no chance to succeed in the show cause notice proceedings. We are not impressed by the submission of the learned Counsel. By merely claiming that the Department is biased against the petitioners, the petitioners cannot avoid investigation by the Department and compel this Court to examine disputes involving questions of fact. We are not prepared to accept the submission that because of large claim involved, the Department would not give justice to the petitioners. It should not be overlooked that the officers of the Department are exercising quasi-judicial powers and there is nothing to establish that injustice would be done to the petitioners. Shri Hidayatullah also submitted that the adjudication should be carried out only by the Principal Collector and direction to that effect should be given. We decline to accede to the submission. It is not for the petitioners to choose the coram and it is for the Department to determine as to which officer should pass order of adjudication. Shri Sethna very fairly stated that none of the officers, who have filed affidavits in the present proceedings would undertake the process of adjudication of the present dispute. It is always open for the petitioners to challenge the order of adjudication before the superior authorities, if the order is adverse to the interest of the petitioners. We are not prepared to accede to the submission that all the officers of the Department are biased against the petitioners. In these circumstances we decline to grant any relief to the petitioners and the petition must fail.
5. Accordingly, rule is discharged with costs.
Shri Sethna assures that the petitioners will be supplied with all the material on which the Department proposes to rely in adjudication proceedings and the petitioners would be given inspection and ample opportunity to explain their case before passing of the adjudication order.