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2019 Supreme(SC) 1342
SUPREME COURT OF INDIA
A.M. Khanwilkar, Dinesh Maheshwari, JJ.
M/s. The Bombay Dyeing & Mfg. Co. Ltd. – Appellant(s)
Versus
The Commissioner of Central Excise – Respondent(s)
CIVIL APPEAL NO. 5297 OF 2008
Decided On : 09-12-2019
For the Appellant(s) :Nandini Gore, Tahira Karanjawala, Natasha Suhrawat, Arjun Sharma, Manik Karanjawala, Advocates
For the Respondent(s):Alka Agrawal, B.V. Balaram Das, B. Krishna Prasad, Advocates
IMPORTANT POINT
Contention that fabric manufactured by appellant is not amenable to excise duty as it is not removed from the premises rejected.
Section 11A of Central Excise Act, 1944 is applicable to cases of recovery of duties not levied or not paid or shortlevied or shortpaid etc.
A party cannot approbate and reprobate.
Headnote:
(a) Central Excise Rules, 1944 - Rule 9 and 49 - Fabric manufactured by appellant - Contention that it is not amenable to excise duty as it is not removed from the premises - Already negatived in 1987 Supp SCC 350. (Para 18)
(b) Central Excise Rules, 1944 - Rule 9B - Interim relief granted by High Court in view of appellant’s willingness to file undertaking/bond in Form B13 referable to Rule 9B supported by bank guarantee for an amount equivalent to specified differential duty in respect of the yarn in question - Accordingly appellant voluntarily furnished requisite bonds in Form B13 - High Court order disposing writ petitions does not efface appellant’s endorsement on B-13 bonds or RT-12 returns that the assessment was provisional - Not a case of duty not levied or not paid or shortlevied or shortpaid - Appellant was liable to pay excise duty. (Para 19)
(c) Central Excise Act, 1944 - Section 11A - Applicable to cases of recovery of duties not levied or not paid or shortlevied or shortpaid etc - Not applicable to present case falling under Rule 9B, Central Excise Rules, 1944. (Para 21)
(d) Central Excise Rules, 1944 - Rule 9B - Appellant submitting to the process under Rule 9B for cases of provisional assessment - Submitting bond and bank guarantee - Authorities making endorsements on the bonds and on monthly RT12 returns filed by appellant, indicating that it was a case of provisional assessment - Having submitted to that process, it is not open to the appellant to urge that an express order of provisional assessment has not been passed by the authorities. (Para 23, 24)
(e) Administration of justice - Appellant requesting High Court to pass interim order stipulating that the appellant would execute bonds in Form B13 referable to Rule 9B of the Rules and continue to file monthly RT12 returns from time to time - Endorsements made thereon indicating that it is a case of provisional assessment - Appellant cannot now be permitted to urge that it had not submitted to the process of provisional assessment as such for lack of a specific order of the concerned authority in that behalf. (Para 32)
Facts of the case:
The appellant is engaged in manufacture of cotton and manmade fabrics. The appellant filed two writ petitions before the High Court of Delhi. The reliefs claimed in both petitions are identical except that they pertain to separate periods.
During the pendency of the aforementioned writ petitions, the appellant filed Civil Miscellaneous Petition Nos. 1698/1981 and 1699/1981 in the concerned writ petitions, praying for interim reliefs.
The High Court of Delhi granted interim relief in terms of Prayer clause (a). Accordingly the appellant furnished an undertaking in order to secure the payment of differential tax to the Department of Revenue, Ministry of Finance in the event of dismissal of its writ petitions. Later on, the High Court modified the interim relief. Eventually the writ petitions were disposed of.
Assistant Collector of Central Excise informed the appellant that Section 11A of the Central Excise Act, 1944 was not applicable to the facts of the present case.
The appellant in its response sent on 11.5.1993, asserted that the Show Cause Notice under Section 11A of the Act was mandatory
The Assistant Commissioner proceeded to finalize the classification lists by noting that the classification lists filed earlier by the assessee were treated as provisional.
The appellant was asked to pay an amount of Rs.35,92,234.67.
The Assistant Collector of Excise vide orderinoriginal dated 7/15.12.1993, confirmed the demand of excise duty.
The appellant then unsuccessfully carried the matter in appeal before the Customs, Excise and Service Tax Appellate Tribunal. Against that decision, the appellant filed Central Excise Appeal before the High Court of Judicature at Bombay which was eventually dismissed.
Finding of the Court:
Appellant was liable to pay excise duty.
Result: Appeal dismissed.
JUDGMENT
A.M. Khanwilkar, J.
1. This appeal is directed against the judgment and order dated 13.9.2007 passed by the High Court of Judicature at Bombay in Central Excise Appeal No. 237 of 2006. Briefly stated, the appellant is engaged in manufacture of cotton and manmade fabrics. According to the appellant, the fabric manufactured by the appellant was not amenable to excise duty since it was for captive consumption and not to be removed for the purposes of sale or for consumption as envisaged under Rule 9 read with Rule 49 of the Central Excise Rules, 1944 (for short, ‘the Rules’). On this assertion and relying on the decision of the High Court of Delhi in J.K. Cotton Spinning & Weaving Mills Co. Ltd. & Ors. vs. Union of India & Ors., 1981 (8) ELT 887 (Del.) the appellant filed two writ petitions under Article 226 of the Constitution of India before the High Court of Delhi being Civil Writ Petition Nos. 1234/1981 and 1235/1981. The reliefs claimed in both petitions are identical except that they pertain to separate periods. We may reproduce the reliefs claimed in Writ Petition No. 1235/1981, for the sake of convenience. The same read thus:
“(a) Issue a suitable writ, order or direction declaring that duty of excise is not payable in respect of yarn (Cotton and man made) processed further in the petitioner’s composite mills in the manufacture of fabrics:
(b) Issue writ of certiorari or any other suitable writ, order or direction in the nature thereof quashing and setting aside the decisions and directives of the Central Board of Excise, respondent No.2, contained in circular letters dated 6.10.1976 (Annexure A), 24.9.1980 (Annexure B) and to quash the notices dated 23.4.1981 (Annexure C) and all similar notices referred to in the statement (Annexure D), dated 7.1.1981 (Annexure G) and dated 9.3.1981 (Annexure H):
(c) Issue a writ of mandamus or any other appropriate writ, order or direction in the nature thereof, restraining the respondents from levying or collecting duty of excise in respect of yarn obtained by the petitioner at an intermediary stage in its composite mill for further processing in the manufacture of fabrics and to direct the Board, respondent No.2, to cancel and/or withdraw the decisions and directives contained in circular letters dated 6.10.76 (Annexure A) and 24.9.80 (Annexure B) and to direct respondent 3 and 4 to cancel and/or withdraw the notice dated 23.4.1981 (Annexure C), 23.2.81 (Annexure G) and all similar notices referred to in the statement (Annexure D), dated 7.1.1981 (Annexure G) and 9.3.1981 (Annexure H) and to restrain defendants 3 and 4 from taking any steps or/proceedings pursuant to and in accordance with the aforesaid directives and notices.
(d) Issue a writ of prohibition or any other appropriate writ, order or direction in the nature therefore, restraining the respondent from collecting duty of excise on yarn obtained by the petitioner in its composite mill which is further processed in the manufacture of fabrics.
(e) Issue appropriate writ, order or direction directing the respondent to refund the amount of duty illegally recovered from the petitioner in respect of yarn obtained in the petitioner’s composite mills and further processed in the manufacture of fabrics for the period commencing from 15.7.1977 in respect of cellulosic spun yarn and noncellulosic spun yarn and from 17.3.1972 and in respect of cotton yarn and from 15.7.77 upto the date of disposal of the present writ petition and in particular the amounts referred to in statement (annexure E) together with interest at the rate of 12% p.a. and in the alternative to direct Respondents No.3 and 4 to grant the refund as per refund claims dated 13.5.1981 (colly.);
(f) In the alternative and without prejudice to the aforesaid prayers, to issue a writ of mandamus or any other writ, order or direction in the nature thereof direction the respondent not to collect duty of excise in respect of yarn upon sizing thereof processed in the manu
