Delhi District Court
M/S Global Signal Cables (I) Private ... vs . M/S Rajsav India Pvt. Ltd. on 16 October, 2014
IN THE COURT OF SH. PRASHANT KUMAR,
ADJ04 (NW), ROHINI DISTRICT COURTS, DELHI.
CS No. 610/14
M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
M/s Global Signal Cables (I) Private Limited
Having registered office at:
72, Sreshtha Vihar,
Vikas Marg Extension,
Delhi110092
Also at,
M/s Global Signal Cables (I) Private Ltd.
18/4546, Site IV,
Sahihabad Industrial Area,
Ghaziabad201010,
Uttam Pradesh. ................. Plaintiff
Vs.
M/s Rajsav India Private Limited
O19, Sector5, DSIDC,
Bawana Industrial Area Complex,
Delhi110039.
Also At,
M/s Rajsav India Private Limited
having registered office at:
Shanti Mansion,
E2/224, Shastri Nagar,
Delhi110052. ........Defendant.
CS No. 610/14 Page No. 1/25
M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
Date of Institution of the case : 17.12.2011
Date of hearing the arguments : 19.08.2014
Date of announcing the Judgment : 16.10.2014
J U D G M E N T
1. By this Judgment, I shall pronounce the final Judgment in this case.
2. The facts of the case filed by the plaintiff in brief are as under:
Plaintiff is a company incorporated under Companies Act engaged in the business of manufacturer of Copper wires and other related products and is an hundred percent export oriented unit. Defendant is also a company who approached the plaintiff for supply of stranded copper, conductor "non electrically insulated". Accordingly, plaintiff company accepted the request and supplied the material in the financial year 200809, 200910, 201011 accordingly. During discussion, it was made clear to the defendant company that CENVAT credit on sales from EOU to a unit in the DTA are permissible under CENVAT credit rules 2004. All duties and taxes are payable by the buyer. Due to inadvertent error, plaintiff company charged wrong duties on sales made from EOU to the defendant company. Plaintiff company charged from defendant company, 50% of 5 % while the applicable rates of duty should have been 50% of 10 % since chapter 7413.00 attracts 10% duty. Plaintiff company also CS No. 610/14 Page No. 2/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
received a letter dated from the office of Custom and Central Excise range1, divisioniii, Gaziabad asking for payment of differential duty in respect of DTA sale made during the period March 2008 to March 2010 alongwith interest @ 13 % on the duty amount. A copy of the said letter was sent to the defendant. Plaintiff company raised the supplementary invoices and asked the defendant company for payment of Rs. 3,89,978.83/. The plaintiff Company vide Email dated 24.02.2011, 09.03.2011 and 16.03.2011 requested the defendant company to release the payment and defendant stated that they would get supplementary invoices checked by their excise office and revert back. Defendant company vide their letter dated 09.04.2011 raised frivolous pleas of inadmissibility of CENVAT credit and returned 19 supplementary invoices to the plaintiff without payment of any amount. plaintiff Company vide its letter dated 15.06.2011 informed the defendant that each of these supplementary invoices carry a note on the manner in which the duty has been paid and a copy of page 11 of RG 23A partII, self attested indicating the debit of duty was also sent to the defendant company and it was informed that CENVAT credit is admissible on supplementary invoices as per CENVAT rules. Despite this letter, the defendant company has not paid the said amount. A legal notice dated 25.08.2011 was also given, however, no payment made. Hence this suit.
CS No. 610/14 Page No. 3/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
3. In his WS, the defendant has denied all the facts alleged by the plaintiff and has stated that in his reply dated 09.09.2011 to the legal notice dated 25.08.2011, they have explained their grievances to the plaintiff. It is stated that plaintiff's new unit M/s Global Signal Cable Pvt. Ltd. is stranger unit who has been started supplying the goods to the defendant w.e.f. February 2009. When it was question as to why the goods were supplied by the new unit i.e. plaintiff it was informed that there will not be any price escalation or quality difference from the goods supplied by the stranger unit under the new adhoc arrangement. Defendant was surprised to find out that besides the normal price i.e. BED+CESS+H.CESS+CST alongwith extra duty named as basic duty @ 2.5 % was added and charged on basic value. When defendant questioned about this new basic duty @ 2.5 %, it was informed that since the new unit was 100% EOU, they were required to levy, charge, collect this duty of 2.5 % which is to be paid till strike is called of in their DTA unit and for this little variance, the promisee will be adjusted in assessable value. Thus, virtual no extra duty charge was assured of by the promisor. The material so supplied, however, was accepted as it was required urgently. The supplied never informed about any further development at DTA unit at any stage and thereafter 19 supplementary invoices were received. It is further stated that for about two years till 19.02.2011, there was no information or discussion that any CS No. 610/14 Page No. 4/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
further custom duty / excuse duty will be charged on the goods except 2.5 % basic duty which they have informed and charged from 03.02.2009 onwards.
It has been further stated by the defendant that they have expressed their willingness to pay even the rider/ extra charges raised by the plaintiff through issuing 19 supplementary invoices subsequently against the agreement provided necessary authentication from the Central Excise Department for availing CENVAT credit alongwith the letter for availing the same from RO Gaziabad against those supplementary invoices is procured. However, the plaintiff has not done anything in this regard. It is further stated that as per the terms and condition agreed on 09.03.2009 by the plaintiff, the defendant was liable to pay duty @ 50% of 5% i.e. 2.5% only and for the evasion of Central Excise Duty detected by Central Excise Authority against the plaintiff, the wrong doer is liable for duty & penal action and thus the defendant/ raw material purchaser is a scapegoat in such situation and hence not liable to pay an extra duty beyond agreement. The defendant company has rightly returned the said supplementary invoices to the plaintiff vide self explanatory letters dated 09.03.2011, 09.04.2011 & 04.08.2011 simply for authentication of these invoices from R.O., CE, Ghaziabad for ensuring availment of CENVAT Credit by the defendant but the plaintiff never made any effort in his direction with the CS No. 610/14 Page No. 5/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
ulterior motive of hiding this transfer device from R.O, CE, Gaziabad. The defendant is neither original manufacturer nor assesee in this case. He is a raw material purchaser under an agreement with the plaintiff who is liable to pay all leviable duty/ taxes on the finished goods removed from his factory as per Central Excise tarrif and manual but the defendant is only liable to pay only cost of goods plus taces as agreed upon at a material time. The defendant personally did not place any order to the plaintiff directly but it was through the plaintiff's parental company i.e. M/s Global Signal Telecom (I) Pvt. Ltd. with whom business was initiated in 199697.
4. From the pleadings of the parties, it is, therefore, reflected that the moot question to be decided in this case is that whether there was an agreement in between the parties to pay the additional duties by the defendant or it was impliedly agreeable by the defendant. Another issue before this court to be decided in between the parties, as per pleadings of the parties, is to further see whether the plaintiff has actual paid the additional duties as alleged by him and a certificate in that regard has been shown communicated to the defendant accordingly as per requirements of the defendant as mentioned in the reply to the legal notice was given to him.
CS No. 610/14 Page No. 6/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
5. After conclusion of the pleadings, following issues were framed vide order dated 18.08.2012.
(i) Whether the suit is barred by limitation? OPD.
(ii) Whether the plaintiff has no locus standi to file the present suit? OPD.
(iii) Whether the plaintiff is entitled for a sum of Rs. 4,17,276/ from the defendant? OPP.
(iv) Whether the plaintiff is entitled for interest @ 12% per annum? OPP.
(v) Whether the defendant is entitled for a sum of Rs. 3,80,676/ from the plaintiff without payment of court fee? OPD.
(vi) Whether the defendant is entitled for interest @ 13% per annum? OPD.
(vii) Relief.
6. Before proceeding further, It is pertinent to mention here that the plaintiff has examined only one witness in PE. The defendant has also led evidence in his defense and has examined one witness in DE.
7. My issue wise findings are as under:
Issue No. 1. Whether the suit is barred by limitation? OPD.
Onus of this issue is upon the defendant. The plea taken by the defendant in its written statement is that the suit filed by the plaintiff is barred by period of limitation. The averments made in the plaint are CS No. 610/14 Page No. 7/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
perused. It is alleged by the plaintiff that they received the letter dated 18.02.2011 from the office of Custom and Central Excise, Range I, DivisionIII, Gaziabad for payment of differential duty in respect of DTA sale made during the period March 2008 to March 2010 alongwith interest.
The supplementary invoices have been issued thereafter accordingly and the defendant has been asked to make the payment thereafter. It is, therefore, reflected from the record itself that cause of action in the present case vide which the supplementary invoices have been issued by the plaintiff company has arisen on and after 18.02.2011. The present suit has been filed on 17.12.2011. It is, therefore, reflected from the record that the suit has been filed very much within period of limitation. Accordingly, in terms of these observations, issue no. 1 is decided in favour of the plaintiff. Issue No. 2: (ii) Whether the plaintiff has no locus standi to file the present suit? OPD.
Onus of this issue is upon the defendant. The defendant has raised another objection in their written statement that the plaintiff has no locus standi to file the present suit. During the final arguments the only thing stated on behalf of the defendant in this regard is that the suit has not been filed by the duly authorised person. In this regard, it is reflected from perusal of the record that Sandeep Kumar is allegedly one of the Director Company whose affidavit is filed alongwith the plaint. It is reflected from CS No. 610/14 Page No. 8/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
perusal of the record that in para no. 1 of the plaint, name of Sandeep Kumar has been mentioned as Director of the plaintiff who is authorized to sign and verify the present suit. The documents filed by the plaintiff alongwith the plaint are further perused. The plaintiff company is duly registered with the Registrar of Companies. There is one document, which is extracts from the minutes of meeting of Board of Directors held on 29.11.2011 which has apparently authorized Mr. Sandeep Kumar to institute, file and pursue the suit on behalf of the plaintiff company. It is, therefore, reflected that the suit has been filed by duly authorized person. This document has been admitted, hence, it need not to be proved. Nothing has been stated on behalf of the defendant in this regard any further. In this regard, therefore, it is considered that the suit has been filed by the duly authorized person. Accordingly, issue no. 2 is decided in favour of the plaintiff.
It is pertinent to mention here that issues No. 3, 4, 5 & 6 are inter linked and hence, they all are being taken up together. Issue No. 3. Whether the plaintiff is entitled for a sum of Rs. 4,17,276/ from the defendant? OPP.
Issue No. 4: Whether plaintiff is entitled for interest @ 12% per annum? OPP.
Issue No. 5: Whether the defendant is entitled for a sum of Rs. 3,80,676/ CS No. 610/14 Page No. 9/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
from the plaintiff without payment of court fee? OPD. Issue No. 6: Whether the defendant is entitled for interest @ 13% per annum? OPD.
Onus of issue no. 3 & 4 is upon the plaintiff while the onus of issue no. 5 & 6 is upon the defendant.
The plaintiff has examined only one witness in PE who is PW1 Renu Gupta who is Manager, Finance of the plaintiff company. It is stated by PW1 that she is conversant with the facts an circumstances of the case. Board of resolution in her favour is Ex. PW1/14. It is stated that the plaintiff company is engaged in the business of manufacturing of Copper wires and other related products and is an hundred percent export oriented unit (EOU). Defendant company approached the plaintiff for supply of stranded copper, conductor "non electrically insulated". It is further stated that the request was accepted and the material was supplied in its domestic tarif area from the plaintiff company's EOU. It is further stated that during discussions in between the plaintiff and defendant company, it was made clear to the defendant company that CENVAT credit on sales from EOU to a unit in the DTA are permissible under CENVAT credit rules 2004. It is further stated that the terms of sale with the defendant company have been the Copper Price+Fabrication adder=Basic price+Duties and Taxes are extra as applicable and all duties and taxes are payable by the buyer. It is CS No. 610/14 Page No. 10/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
further stated that due to inadvertent error, plaintiff company charged wrong duties on sales made from EOU to the defendant company which was 50% of 5 % while the applicable rates of duty should have been 50% of 10 % since chapter 7413.00 attracts 10% duty. Plaintiff company also received a letter dated 18.02.2011 from the office of Custom and Central Excise range1, divisioniii, Gaziabad asking for payment of differential duty in respect of DTA sale made during the period March 2008 to March 2010 on the duty amount. A copy of the said letter dated 18.02.2011 is marked PW1/3. This letter was sent to the defendant company alongwith the letter dated 25.02.2011. The copy of the letter dated 25.03.2011 is Ex. PW1/4. The plaintiff company raised certain supplementary invoices and asked the defendant company for payment of Rs. 3,89,978.83/ which are Ex. PW1/5 collectively. The plaintiff Company vide Email dated 24.02.2011, 09.03.2011 and 16.03.2011 requested the defendant company to release the payment and defendant company stated that they would get supplementary invoices checked by their excise office and revert back. Such taxes charged in the supplementary invoices ought to have been paid by the defendant company which would have been automatically have the CENVAT credit to its account and the supplementary invoices are balance of sales short charged. The copy of the letter dated 24.02.2011, 09.03.2011 and 19.03.2011 are Ex. PW1/6, PW1/7 & PW1/8. The CS No. 610/14 Page No. 11/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
defendant company, however, had returned the 19 supplementary invoices by raising frivolous pleas of inadmissibility of CENVAT credit through letter dated 09.04.2011 which is Ex. PW1/9. It is further stated that plaintiff Company vide its letter dated 15.06.2011 informed the defendant that each of these supplementary invoices carry a note on the manner in which the duty has been paid and a copy of page 11 of RG 23A partII, self attested indicating the debit of duty was also sent to the defendant company and the defendant was further informed that CENVAT credit is admissible on supplementary invoices. It is further stated that the defendant company has failed to pay the plaintiff company an amount of Rs. 3,89,978.83/ whereas the plaintiff company has already debited its RG23A partII with the said amount of duty. The plaintiff company has also to pay interest @ 13 % on the duty amount. The plaintiff company has sent a legal notice dated 25.08.2011 which is Ex. PW1/11. The defendant company has replied vide letter dated 09.09.2011 which is Ex. PW1/12.
During her cross examination, PW1 has admitted that prior to the present sales, the defendant used to get the supply of the goods from Global Signal India Pvt. Ltd. The directors of both the companies are the same. PW1 has further stated that she has not discussed anything regarding charging of the price with the defendant as mentioned in the affidavit and she has no personal knowledge as to who actually discussed CS No. 610/14 Page No. 12/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
the price structure with the defendant. PW1 has further stated that she has personal knowledge of dealings with finance. Such knowledge as alleged by PW1 is general one where as she has denied having any special knowledge regarding the settlement and charging of the price with the defendant. It is further stated by PW1 that the plaintiff company has not filed any document to show what price structure was settled before the supply was effected to the defendant. PW1 has further expressed her ignorance and stated that she has no knowledge if the defendant did not receive the CENVAT Credit for 2.5% custom duty charged by the plaintiff as per annexure B Ex. PW1/D1.
Before coming to the evidence led by the defendant, it is reflected from the evidence led by PW1 that she is a authorized person on behalf of the plaintiff. The evidence led by a duly authorized person is to be scrutinized and considered in the light of certain principles that such evidence is relevant only to the extent that such authorized person is deposing on the basis of official record as well as to the extent of her personal knowledge. Reference, in this regard, can be laid upon the judgment titled as Janki Vashdeo Bhojwani and Anr. Vs. Indusind Bank Ltd. & Others, AIR 2005 Supreme Court 439 wherein it has been held by Hon'ble Supremene Court of India that, " Order 3 Rule 1 & 2 empowers the CS No. 610/14 Page No. 13/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
holder of power of attorney to 'act' on behalf of the principal. The word 'acts' employed in Order 3 Rule 1 & 2, confines only in respect of 'acts' done by the power of attorney holder in exercise of power granted by the instrument. The terms 'acts' would not include deposing in place and instead of the principal. If the power of attorney holder has rendered some 'acts' in pursuance to power of attorney, he may depose for the principal in respect of such acts, but he can not depose for the principal for the acts done by the principal and not by him. Similarly, he cannot depose for the principal in respect of the matter which only the principal can have a personal knowledge and in respect of which the principal is entitled to be cross examined."
It is, therefore, reflected from the above mentioned judgments that if any witness who is allegedly authorized by any of the parties does not have any personal knowledge nor he was employed at the relevant time when the alleged transaction took place then his/ her evidence can not be relied. I am afraid that similar is the case before this court. PWRenu Gupta alleged that she is duly authorized to depose on behalf of the plaintiff whereas it is stated by her in her cross examination that she has not discussed anything regarding charging of the price with the defendant nor CS No. 610/14 Page No. 14/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
she has any personal knowledge as to who has discussed the price structure with the defendant. In these circumstances, the above mentioned judgments are applicable in the present facts and circumstances. No other witness has been examined by the plaintiff except Renu Gupta.
Another thing as emerged from the evidence led by the plaintiff which is otherwise relevant and is that the plaintiff company has not filed any document to show of the price structure so settled before the supply was effected to the defendant.
8. Before arriving at any conclusion, the evidence led by the defendant is also perused. The defendant has examined Rajesh Kumar Aggarwal as DW1 who is allegedly one of the Directors of the defendant company. He has stated that the defendant company is dealing in manufacturing of telephone cords and cables and had dealings with M/s Global Signal Cables Telecom India Pvt. Ltd. for past several years. The defendant company was purchasing the raw material from M/s Global Signal Telecom India Private Ltd. which is a sister concerned of the plaintiff. M/s Global Signal Cables Telecom India Pvt. Ltd. was not in a position to supply the goods to the defendant company on account of lockout in their factory and as such Sh. Sandeep Kumar who was Director of hte plaitniff company as well as of M/s Global Signal Cables Telecom India Pvt. Ltd. proposed to CS No. 610/14 Page No. 15/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
supply the goods from the plaintiff company which is their 100% EOU and since it is an EOU, the basic duly @ 2.5% shall be chargeable and to compensate the defendant, he reduced the price by Rs. 10.21 per kg as the supply was effected earlier from M/s Global Signal Cables Telecom India Pvt. Ltd. @ 696.76 per kg where in addition to the said rate, excise duty of 10%, E.Cess @ 2%, H & S Cess @ 1% and CST @ 2% was also payable whereas if the supply was effected to the defendant company through the plaintiff company which is EOU besided al other charges the defendant company have to make a further payment @ 2.5% as basic duty. Thus, about 17/ per kg the defendant company was to pay more and for this re reduced the price by Rs. 10.21 per kg. Thus, the defendant company was to receive the goods at about Rs. 6/ per kg at higher rates than that of earlier rates. He forwarded Ex. PW1/D1/ flow sheet details stating the same and under his own handwriting and signatures on 09.03.2009 and on these circumstances, the defendant company has agreed to receive the goods from the plaintiff company. The defendant company made full payment of supply so effected as per invoices of the plaintiff. The defendant company was assured by Sandeep Kumar that basic duty of 2.5% is to be paid as refundable to the defendant being CENVAT Credit by the excise department but no such refund is payable as per Excuse Rule as 2.5% basic charges is of the Custom Department and CS No. 610/14 Page No. 16/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
Excise Department do not deal with the same. It is further alleged that the plaintiff company illegally and unlawfully raised their invoice and supplementary invoices in respect of which present claim has been filed. The defendant company is not liable to make any such payment for which the defendant company never agreed to pay basic duty other than @ 2.5% and never agreed to the price structure as given by the plaintiff and the price structure was agreed as per Ex. PW1/D1. It is further stated that the defendant company after receiving the goods at agreed price already sold it after calculating price on the basis of price paid for raw material and certainly the defendant company can not be paid this amount. The claim of the plaintiff company is false that it was made clear to the defendant company that CENVAT Credit on sales from an EOU to a unit in the DTA are permissible under CENVAT Credit Rule 2004.
During his cross examination, DW1 has stated that he has not filed any record of any alleged purchase order placed by the defendant company to M/s Global Signal Cables Telecom India Pvt. Ltd. for purchase of material. It is further stated that there is no letter on record to show that directors of plaintiff company requested the defendant to temporarily accept the material from the plaintiff company.
During his cross examination, one suggestion was given to the DW1 from the side of the plaintiff which has been answered in affirmative and CS No. 610/14 Page No. 17/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
under which it has been stated by him that it is correct that there is no letter on record wherein the plaintiff company allegedly assured the defendant company that the basic duty of 2.5% will be refunded to the defendant company.
From the cross examination of DW1, it is reflected that no material contradictions have emerged. DW1, therefore, has corroborated what he has stated in his examination in chief on behalf of the defendant company.
Following things have emerged from the examination of sole witness examined on behalf of the defendant:
(i) That there is nothing on record from the side of the defendant to show that the defendant company had agreed to pay the additional duties for which the supplementary invoices have been raised which are subject matter of the present suit.
(ii) Defendant has alleged that the plaintiff company had agreed to reduce the rates. This fact is not disputed during cross examination and no question has been asked by the plaintiff in this regard, therefore, this fact that a concession in rates was given by the plaintiff company, remains uncorroborated.
(iii) another fact alleged by the defendant witness is that the goods which were received by them has been, however, sold after raising the necessary invoices. This fact is also not disputed during cross examination by the CS No. 610/14 Page No. 18/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
plaintiff. Therefore, it is reflected that the goods which were received by the defendant company on a certain price have been further transfered to the subsequent consumer or manufacturer as the case may be.
In these circumstances, as all the above mentioned facts have not been disputed and are considered to have been duly corroborated. Therefore, onus is shifted again upon the plaintiff to show specifically that there was an agreement in between the parties vide which the defendant had to pay the additional duties as per law which has been denied by the defendant in his WS as well as in his evidence so led by him.
During the final arguments, it is also reflected that the plaintiff though raised 19 supplementary invoices demanding the payment of certain amount of difference on additional duties from the defendant, however, such amount have not been paid by the plaintiff accordingly but the plaintiff has allegedly obtained the benefit of settlement of CENVAT Credit system with the department. Thus, there is no actual payment of the said difference for which 19 supplementary invoices have been issued by the plaintiff.
9. The plaintiff has relied upon certain judgments which are mentioned as under:
CS No. 610/14 Page No. 19/25
M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
Allora Electric & Cable Co. Vs. M/s Shiv Charan & Bros & Ors, 72(1998) Delhi Law Times 761, Delhi High Court.
In this case, it has been held by Hon'ble High Court of Delhi that there is market custom and trade usage to charge interest on credit sales. If payments are not made within reasonable time. Interest is also payable under Section 61 of Sale of Goods Act.
It is not denied and disputed that interest upon the value of the goods so supplied has to be charged as per custom, trade and usage. Such customary trade and usage are, however, subject to the specific agreement in between the parties. In the light of any such specific agreement in the present case, this judgment has to be considered accordingly.
On the point of application of CENVAT rules, the counsel for the plaintiff has relied uopn one judgment titled as Essar Oil Ltd. Vs. Commissioner of Central Excise, decided on 16.01.2014, in the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Ahmedabad, in which it has been held that a denial of CENVAT credit by the Commissioner of Central Excise was not justifiable and the court had held that such a credit is permissible.
In this above mentioned case initially no duty was paid by the appellant and a penalty was imposed by the concerned Commissioner CS No. 610/14 Page No. 20/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
after a show cause notice was issued. It was further held that credit of differential countervailing duty paid was correctly availed and the fine was wrongly adjudicated by the adjudging authority.
It is pertinent to mention here that as per CENVAT Rule 2004, it is not denied that such a credit can not be availed by the plaintiff herein. However, there has been a specific agreement in between the parties apart from the customary trade and practices on payment of interest uopn the goods so supplied, which has to be seen and considered in the present case. The counsel for the plaintiff has also relied upon certain judgments on the aspect of averments of certain facts which are not denied specifically, hence, deemed to be admitted.
Another Judgment which has been relied upon by the plaintiff is titled as Nagindas Ramdas Vs. Dalpatram Ichharam @ Brijram & Others, (1974) I Supreme Court Cases 242.
It has been held in this case that, "From the conspectus of the cases cited at the bar, the principle that emerges is, that at the time of passing of the decree, there was some material before the court, on the basis of which the court could be prima facie satisfied, about the existence of a statutory ground for eviction. It will be presumed that the court was so satisfied and the decree for eviction though apparently passed on the basis of a compromise, would be valid. Such material may take the shape either CS No. 610/14 Page No. 21/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
of evidence recorded or produced int he case, or, it may partly or wholly be in the shape of an express or implied admission made in the compromise agreement, itself. Admissions, if true and clear, are by far the best proof of the facts admitted. Admissions in pleadings or judicial admissions, admissible under section 58 of the evidence Act, made by the parties or their agents at or before the hearing of the case, stand on a higher footing than evidentiary admissions. The former class of admissions are fully bnding on the partly that makes them and constitute a waiver of proof. They by themselves can be made the foundation of the rights of the parties. On the other hand, evidentiary admissions which are receivable at the trial as evidence, are by themselves, not conclusive. They can be shown to be wrong."
Another judgment relied upon by the plaintiff is Romesh Chander Sethi Vs. Inder Mohan Sethi & Anr., 163 (2009) Delhi Law Times 4, Delhi High Court. It has been held in this case that the defendant did not chose to lead any evidence in rebuttal to dispute the validity of two bills nor she chose to cross examine PW1 or PW2 or to appear in the witness box to state on oath that two bills had not been executed by her father and mother. Section 58 of Indian Evidence Act facts which are admitted need not be proved. Thus, if any fact is stated to be admitted by a party then it is not necessary to be proved in evidence.
CS No. 610/14 Page No. 22/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
Another judgment relied uopn by the plaintiff is titled as Hukum Singh Through Lrs (Shri) Vs. Shri Badri Pershad Tandon/ Sh. Sohan Lal, 2010 VI AD (Delhi) 531, RSA No. 14/1983. This judgment is on section 58 of Indian Evidence Act under which the plaintiff had acknowledged particular fact by which the defendant was considered to be dispensed with from formal proof thereof.
Another judgment relied uopn by the plaintiff, is titled as Umesh Aggarwal, Shri Mudit Agarwal and Shri Sohil Agarwal Vs. Shri Mahesh Agarwal, Shri Mihit Agarwal and Smt. Mridula Agarwal, R.S.A No. 1 of 2012, In the High Court of Sikkim at Gangtok. This judgment is on the same law as laid down under section 58 of Indian Evidence Act.
After considering the judgments relied upon by the parties and the evidence so led by them, it is reflected that:
(I) Renu GuptaPW1 called by the plaintiff does not have any personal knowledge about the case. She is Manager, Finance in the plaintiff company.
(ii) PW1 has not controverted the facts stated by the defendant in their reply to the legal notice given to them with regard to which specific averments have been made in the said reply which is filed on record as well as in the detailed written statement. Thus, this fact alleged by the defendant is considered as not disputed by the plaintiff. CS No. 610/14 Page No. 23/25 M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.
(iii) The plaintiff has also not led any evidence on the aspect when defendant has specifically alleged that there was reduction of price by the plaintiff at the time of supply of the goods and there was no agreement to pay the additional duty. It is not denied and disputed in this regard that as per customary trade and usage the interest charge upon the goods so supplied also form part of the final value of the goods so supplied.
However, such customary usage and practices which are general in nature, are always subject to the specific agreement in between the parties. The defendant has alleged specifically that there was no agreement which has not been controverted by the plaintiff in its evidence.
(iv) The impugned additional duty has not been paid actually by the plaintiff. The defendant had required the plaintiff to forward a certificate issued by Custom and Excise Department in this regard for payment of additional duties and has stated that has not been specifically supplied by the plaintiff. The plaintiff has not led any evidence controverting this fact.
The evidence led by PW1 can not be relied upon in the light of the judgment Janki Vashdeo Bhojwani and Anr. (supra). In the light of above mentioned observations, it is, therefore, reflected that the plaintiff has not been able to establish his averments against the defendant. Hence, he has not been able to discharge the burden of proving these issued upon him. Therefore, he is not entitled for the recovery.
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10. With regard to issue no. 5 & 6, no such prayer has been made in the WS nor any counter claim has been filed in that regard. Therefore, no observation can be given on these issues. In view of the above mentioned observations and discussion, I am of the considered opinion that the suit filed by the plaintiff is not maintainable. Accordingly, the suit stands dismissed.
11. Decree sheet be prepared accordingly.
Announced & dictated in the (Prashant Kumar)
open court today i.e. on 16.10.2014 ADJ04(NW)/Rohini Courts
Delhi/16.10.2014
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M/s Global Signal Cables (I) Private Limited. Vs. M/s Rajsav India Pvt. Ltd.