Bombay High Court
The Commissioner Of Central Excise ... vs M/S. Reliance Media Works Ltd. ... on 6 September, 2018
Author: Riyaz I. Chagla
Bench: M.S. Sanklecha, Riyaz I. Chagla
Uday S. Jagtap 130-17-CEXA-910==.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CENTRAL EXCISE APPEAL NO. 130 OF 2017
The Commissioner of Central Excise,
Mumbai - V Commissionerate, Mumbai .. Appellant
v/s.
M/s. Reliance Media Works Ltd. ..Respondents
and Anr.
Mr. Swapnil Bangur a/w Mr. J.B. Mishra for the appellant Mr. R.V. Desai, Senior Counsel a/w Mr. Rohit Pardesi, Mr. Nagin Patel and Mr. Girish Bhambhani for the respondents CORAM : M.S. SANKLECHA & RIYAZ I. CHAGLA, J.J. DATED : 6 th SEPTEMBER, 2018.
P.C.
1. This appeal under Section 35G of the Central Excise Act, 1944 (the Act) impeaches the order dated 12 th November, 2013 passed by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal).
2. The Revenue has urged the following questions of law for our consideration :-
(a) Whether in the facts and circumstances of the case and in law, was Tribunal right in setting aside the order in original Digitally signed by Uday Uday Shivaji Jagtap 1 of 9 Shivaji Date:
2018.09.11 Jagtap 19:02:56 +0530 Uday S. Jagtap 130-17-CEXA-910==.doc dated 27.08.2009 instead of remanding back the matter for fresh consideration of the issue of marketability and excisability of the goods?
(b) Whether in the facts and circumstances of the case, the impugned order dated 12.11.2013 passed by the Tribunal is in violation of principles of natural justice?
(c) Whether in the facts and circumstances of the case, the Tribunal is right in disapproving the issue of marketability of the goods already established vide order in original No.5/2000 dated 31.05.2000 which had attained finality on the issue of marketability?
(d) Whether in the facts and circumstances of the case, the Tribunal has failed to appreciate the order of Hon'ble Apex Court in case of Bhor Industries Ltd. And Medley Pharmaceutical Ltd. In its true letter and spirit?
3. The grievance of the Revenue before us is to the impugned order dated 12th November, 2013 of the Tribunal in having held that "chemical preparations for photographic use" are not marketable goods and therefore not classifiable under Chapter 37 heading 3707 of the Central Excise Tariff Act, 1985.
4. It is a settled position in law that in the absence of marketability, 2 of 9 Uday S. Jagtap 130-17-CEXA-910==.doc the goods do not become excisable goods. Thus, the issue is one of excisability of the "chemical preparation of photographic use".
5. At the very outset, Mr. Desai, learned Senior Counsel for the respondents raised preliminary objection that the appeal filed by the Revenue is not maintainable before this Court. This in view of Section 35G(1) of the Act, which excludes the jurisdiction of this Court from an order of the Tribunal dealing with issue of rate of duty of excise i.e. manufacture or not for the purpose of assessment. As it is evident from the questions, the issue is in respect of marketablity of goods so as to become excisable goods. Thus, it is submitted that the remedy, if any, to the appellant in respect of the impugned order is before the Hon'ble Supreme Court in terms of Section 35L(1)(b) and (2) of the Act.
6. It is submitted that the issue is no longer res integra as this Court in Bajaj Auto Ltd. Vs. Union of India, 2016 (4) STR 384 while dealing with an issue whether service tax is liable on payment of royalty held that it cannot be a matter of service, therefore, outside the scope of Finance Act, 1994. Thus, it was the issue of rate of duty i.e. taxability and this Court had no jurisdiction to entertain such an appeal under Section 83 of the Finance Act, 1994 read with Section 35G of the Act.
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Uday S. Jagtap 130-17-CEXA-910==.doc
This being an issue of rate of duty. Our attention is also invited to
insertion of sub-section (2) to Section 35L of the Act by the Finance Act, 2014 w.e.f. 6th August, 2014. This Court held that the above insertion which states that any question relating to rate of duty shall include taxability or excisability of goods for the purposes of assessment is clarificatory.
7. In response, Mr. Bangur, learned Counsel appearing on behalf of the appellant invites our attention to the decision of this Court in Global Vectra Helicorp Ltd. Vs. C.S.T. Mumbai (CEA No.66 of 2014, decided on 23rd March, 2015) where this Court entertained an appeal with regard to taxability of the services. The only issue decided by the Tribunal in the order which was a subject matter of appeal in Global Vectra Helicorp Ltd. (supra) was whether the service is rendered by Global Vectra Helicorp Ltd. during the period 1 st May, 2008 to June, 2010 could be classified under Section 65 (105)(zzzz)(1)(j) of the Act as contended by the Revenue or not at all under the Finance Act, 1994 as contended by the appellant assessee therein. Thus, the case of the assessee was the Finance Act, 1994 has no application to its activity. In the above case, the Revenue has raised an objection about the maintainability of the appeal, as giving rise to an issue of classification.
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Uday S. Jagtap 130-17-CEXA-910==.doc
This Court after having considered the amended provision of Section 35L i.e. 35L(2) of the Act, entertained the appeal. This on the ground that it was not a case of deciding between the competing entries for classification but the impugned order decides the taxability of the services itself.
8. It was submitted by Mr. Bangur, that the decision of this Court in Global Vectra Helicorp Ltd. (supra) was rendered on 23 rd March, 2015 and the decision of this Court in Bajaj Auto Ltd. (supra) rendered on 24th June, 2015. However, the subsequent decision in Bajaj Auto Ltd. (supra) had not noticed the earlier decision in Global Vectra Helicorp Ltd. (supra). Therefore, in these circumstances, it was submitted that the appeal be considered for admission following the decision of this Court in Global Vectra Helicorp Ltd. (supra).
9. There is no dispute between the parties that post insertion of sub- section (2) to Section 35L of the Act w.e.f. 6 th August, 2014, issues of taxability and excisability arising from the order of the Tribunal would be appealable to the Hon'ble Supreme Court. The issue on which there seems to be an apparent conflict of view is in respect of orders passed by the Tribunal prior to 6th August, 2014 in the two orders of this Court 5 of 9 Uday S. Jagtap 130-17-CEXA-910==.doc i.e. Global Vectra Helicorp Ltd. (supra) and Bajaj Auto Ltd. (supra). There is one more variant which is possible in case the amendment is held to be non-clarificatory. The variant is that the amendment made on 6th August, 2014 by insertion of sub-section (2) of Section 35L of the Act will not take away vested rights of an appeal in regard to excisability / taxability i.e. of filing an appeal to this Court and, thereafter, to the Supreme Court.
10. So far as facts of this case are concerned, there seems to be an apparent conflict between Global Vectra Helicorp Ltd. (supra) and Bajaj Auto Ltd. (supra). We are conscious of the fact that Bajaj Auto Ltd. (supra) did not notice Global Vectra Helicorp Ltd. (supra). At the same time, we note the fact that although Global Vectra Helicorp Ltd. (supra) did in terms refer to Section 35L(2) of the Act, it did not notice the binding decision of the Apex Court in Navin Chemicals Mfg. & Trading Co. Ltd. Vs. Collector of Customs, 1993 (68) E.L.T. 3. Moreover, it was rendered without taking into account the decisions of this Court in Union of India Vs. Auto Ignation Ltd. 2002 (142) E.L.T. 292, Commissioner of Custom & Central Excise, Goa Vs. Primella Sanitary Products (P) Ltd. 2002 (145) E.L.T. 515, Sterlite Optical Technologies Ltd. Vs. Commissioner of C.Ex.Aurangabad, 2007 (213) 6 of 9 Uday S. Jagtap 130-17-CEXA-910==.doc E.L.T. 658 and Commissioner of Central Excise, Nagpur Vs. Universal Ferro & Allied Chemicals Ltd. 2009 (234) E.L.T. 220.
11. It is true Global Vectra Helicorp Ltd. (supra) did not refer to the decision of the Apex Court in Navin Chemicals Ltd. (supra). However, one must not loose sight of the fact that Navin Chemicals Ltd. (supra) was rendered in the context of the Customs Act, 1962, in which the similar insertion made by the Finance Act of 2014 w.e.f. 6 th August, 2014 of sub-section (2) to Section 35L of the Act, was not done. This Court in Global Vectra Helicorp Ltd. (supra) was dealing with service tax under the Finance Act, 1994, to which the provisions of Section 35L of the Act was made applicable and not the provisions of the Customs Act, 1962. This Court in Global Vectra Helicorp Ltd. (supra) was conscious of the amendment made to Section 35L of the Act as it makes a specific reference to Section 35L (2) of the Act in its order. Thus, it cannot be ex facie said that the decision of this Court in Global Vectra Helicorp (Ltd.) is per incuriam as it ignored the binding decision in Navin Chemicals (supra). So far as the other decisions relied upon by the appellant are concerned, we find, all were rendered prior to insertion of sub-section (2) to Section 35L of the Act. Thus, the decision in Global Vectra Helicorp Ltd. (supra) cannot be said to be per 7 of 9 Uday S. Jagtap 130-17-CEXA-910==.doc incuriam. As against the above, there is a different view taken by this Court in Bajaj Auto Ltd., (supra) by inter alia placing reliance upon Navin Chemicals Ltd. (supra).
12. Therefore, taking into account the fact that the issue involves the very jurisdiction of this Court to entertain appeals from orders of the Tribunal, it would be best that apparent conflicting views of this Court one as indicated in Global Vectra Helicorp Ltd. (supra) and the other in Bajaj Auto Ltd. (supra), be resolved by a larger bench of this Court.
13. This would ensure certainty of law so far as the litigants in the State are concerned and it would be clear to all to which Court the appeal from the order of the Tribunal should be preferred. It would also have an impact on pending appeals. Therefore, the difference of view is best referred to the Hon'ble the Chief Justice to constitute a larger bench of this Court to resolve the apparent conflict between Global Vectra Helicorp Ltd. (supra) and Bajaj Auto Ltd. (supra).
14. We direct the Registry to place the papers and proceedings of the present appeal before the Hon'ble the Chief Justice to obtain suitable directions to place following questions of law before the larger bench of 8 of 9 Uday S. Jagtap 130-17-CEXA-910==.doc this Court to decide :-
(a) Whether the question of taxability or excisability of goods is an issue of rate of duty arising from orders of the Tribunal which are appealable only to the Supreme Court in terms of Section 35L(2) of the Act applies even to appeals from order of the Tribunal passed prior to 6th August, 2014 (i.e. the date of insertion of Sub-section (2) to Section 35L of the Act)?
(b) Whether the amendment made to Section 35L of the Act on 6th August, 2014 by insertion of sub-section (2) therein, is clarificatory or prospective in nature?
(RIYAZ I. CHAGLA, J.) (M.S. SANKLECHA, J.)
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