Gujarat High Court
Messrs N. K. Fire And Safety vs Union Of India on 26 June, 2019
Author: J.B.Pardiwala
Bench: J.B.Pardiwala, A.C. Rao
C/SCA/10934/2019 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 10934 of 2019
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MESSRS N. K. FIRE AND SAFETY
Versus
UNION OF INDIA
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Appearance:
AMAL PARESH DAVE(8961) for the Petitioner(s) No. 1,2
MR PARESH M DAVE(260) for the Petitioner(s) No. 1,2
for the Respondent(s) No. 1,2
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CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
and
HONOURABLE MR.JUSTICE A.C. RAO
Date : 26/06/2019
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA)
1. The subject matter of challenge in this writ-application is the order passed by the respondent No.2, i.e. Commissioner of Central Excise and CGST, Bhavnagar.
2. The operative part of the impugned order passed by the respondent No.2 reads thus:
"(1) I confirm the demand of Central Excise duty of Rs. 4,64,30,689/- [Rupees Four Crore Sixty Four Lacs Thirty Thousands Six Hundred Eighty Nine only] {Rs.
4,50,78,339/- Central Excise duty + Rs. 9,01,567/- 2% Ed. Cess + Rs. 4,50,783/- 1% S&H Ed Cess] (Rs. 1,26,64,324/- as Central Excise duty, Rs. 2,53,286/- as Ed Cess and Rs. 1,26,643/- as S&H Ed Cess) in respect of clandestine clearance of Fire fighting Page 1 of 5 Downloaded on : Thu Jul 11 03:38:44 IST 2019 C/SCA/10934/2019 ORDER Vehicles, to be recovered from M/s. N K Fire & Safety (Division of M/s Newage Fire Fighting Co Ltd.), GIDC Phase-1, Opposite Anand Tiles, Wadhwan, Surendranagar under the provisions of sub section (1) of section 11A of the Central Excise Act, 1944;
(2) I order recovery of interest in respect of Central Excise duty as mentioned at Sr. No. (1) from M/s. N K Fire & Safety (Division of M/s Newage Fire Fighting Co Ltd.), GIDC Phase-1, Opposite Anand Tiles, Wadhwan, Surendranagar under Section 11AB/11AA of the Central Excise Act, 1944.
(3) I impose penalty of Rs.4,64,30,689/- [Rupees Four Crore Sixty Four Lacs Thirty Thousands Six Hundred Eighty Nine only] on M/s. N K Fire & Safety (Division of M/s Newage Fire Fighting Co Ltd.), GIDC Phase-1, Opposite Anand Tiles, Wadhwan, Surendranagar under Section 11AC of the Central Excise Act, 1944. The above penalty amount will be reduced to 25% only in case if the Central Excise Duty as demanded above and appropriate interest and the reduced penalty is paid within 30 days from the date of receipt of this order.
(4) I impose penalty of Rs. 10,00,000/- (Rupees Ten Lakhs only) upon Noticee 2 i.e. Shri Ashok M Shah, Director of M/s. N K Fire & Safety, Surendranagar under Rule 26 of the Central Excise Rules, 2002."
3. We take notice of the fact that the impugned order passed by the respondent No.2 is an appealable order under Section 35(B) of the Central Excise Act, 1944. An appeal would lie before the Appellate Tribunal. We also took notice of the provision of Section 35(F) of the Act, 1944. The same is with respect to the deposit of certain percentage of duty demanded or penalty imposed before filing an appeal. As Page 2 of 5 Downloaded on : Thu Jul 11 03:38:44 IST 2019 C/SCA/10934/2019 ORDER provision for statutory appeal has been provided against the impugned order passed by the Commissioner, we called upon Mr. Dave to explain why we should not relegate his client to prefer an appeal before the Tribunal. Mr. Dave, the learned counsel appearing for the writ-applicant, submitted that three principal submissions going to the root of the matter were canvassed and have been noted by the Commissioner in his impugned order, but at the same time, they have not been dealt with in any manner. According to him, the gist of his three principal submissions is as under:
"1. A Fire Fighting Vehicle comes into existence as a result of body building/body work and no "equipment"
are used in such fabrication; and this proposition is upheld by the Appellate Tribunal in case of Speedcrafts Ltd. V/s. Commissioner of Central Excise dealing with the same exemption Notification and similar special purpose motor vehicles.
2. Three qualified Engineers have reported and certified that no "equipment" were used by the Petitioner in body building/body work of fire fighting vehicles, but these reports and certificates of qualified persons are not considered, and it is also not clarified which "equipment" were used by the Petitioner for fire fighting vehicles."
4. Mr. Dave invited our attention to para 51.0, 52.0, 54.0, 56.0, 61.0, 62.0 of the impugned order. We take notice of the fact that all the submissions canvassed before the Commissioner have been noted in the said paras. According to Page 3 of 5 Downloaded on : Thu Jul 11 03:38:44 IST 2019 C/SCA/10934/2019 ORDER Mr. Dave, since the principal submissions going to the root of the matter have not been dealt with by the Commissioner, the impugned order could be termed as violative of the principles of natural justice. If that be so, according to Mr. Dave, this petition may be entertained without asking the writ-applicant to prefer an appeal before the Appellate Tribunal. In support of such submission, Mr. Dave has placed strong reliance on a decision of this Court in the case of Vadilal Gas Ltd. Vs. Union of India, reported in (2016) 332 ELT 625 (GUJ).
5. He also placed reliance on the following decisions:
(i) Manek Chemicals Pvt. Ltd. V/s. Union of India 2016(334) ELT 302 (Guj.)
(ii) Kranti Associates Pvt. Ltd. V/s. Masood Ahmed Khan 2011(273) ELT 345 (S.C.)
(iii) Reliance Cellulose Products Ltd. V/s. Collector of C.Ex., Hyderabad 1997(93) ELT 646 (S.C.)
(iv) Standard Dye Chem. Surat- 1 and another V/s.
Union of India and others 1980 (6) ELT 181 (Guj.)
6. Having regard to the submissions of Mr. Dave, let notice be issued to the respondents, returnable on 24.07.2019. The respondent No.2 shall be served directly. Notice to the Page 4 of 5 Downloaded on : Thu Jul 11 03:38:44 IST 2019 C/SCA/10934/2019 ORDER respondent No.1 shall go through the court.
7. Having heard Mr. Dave, the learned counsel appearing for the writ-applicant, and having gone through the materials on record, we are of the view that the writ-applicant has been able to make out a strong prima facie case to have an interim order in his favour. We direct the respondents that they shall not take any coercive steps with regard to recovery of the duty, interest and penalty amount till the next returnable date.
Direct service is permitted.
(J. B. PARDIWALA, J) (A. C. RAO, J) MAYA Page 5 of 5 Downloaded on : Thu Jul 11 03:38:44 IST 2019