1. Duty demand and penalty — PSU seeking clearance from Committee of Disputes — Deposit of duty under protest — Abolition of CoD mechanism — Application for restoration of appeal. (Para 1 , 2 , 3 , 4 , 5 , 6 , 8 )
Back
Next 
2022 Supreme(SC) 629
SUPREME COURT OF INDIA
B.R. Gavai, Hima Kohli, JJ.
M/S Steel Authority of India Limited – Appellant
Versus
Commissioner of Central Excise, Bolpur – Respondents
Civil Appeal No. 3611 of 2015
Decided on : 28-07-2022
Important Points
IMPORTANT POINT
Court of Appeal must address all issues involved in appeal.
Court of Appeal must address all issues involved in appeal.
Subject
Taxation Law - Customs Duty
Headnote
Taxation – Penalty – Dismissal of application seeking rectification of order passed by CESTAT – Appeal was allowed by CESTAT setting aside penalty – Second application of appellant could not be considered by Committee of Disputes – Question of interest has not been addressed by any of authorities – Impugned order passed by High Court of Calcutta in appeal quashed and set aside and matter remitted to CESTAT for consideration of limited aspect of interest on duty. (Paras 4, 12 and 13)
Facts of the case:
Present appeal challenges the order dated 12th November 2013 passed by the Division Bench of the High Court of Calcutta, thereby dismissing the appeal being CEXA No. 23 of 2013 filed by the present appellant, which was in turn filed, challenging the order dated 26th April 2013 passed by Customs, Excise and Service Tax Appellate Tribunal, East Regional Bench, Kolkata (“CESTAT”), dismissing the application filed by the present appellant seeking rectification of the order dated 30th October 2012 passed by the CESTAT. The application was filed on the ground that while passing the order dated 30th October 2012, the CESTAT did not notice the fact that the application filed by the present appellant was pending before Committee of Disputes (“CoD”).
Findings of Court:
Second application of the appellant could not be considered by the CoD. The question of interest, therefore, has not been addressed by any of the authorities.
Result : Appeal allowed.
Legal Category Hierarchy
Advocates appeared:
For the Appellant :V. Sridharan, Aditya Bhattacharya, Mounica Kasturi, Apeksha Mehta, Sahil Parghi, Charanya Lakshmikumaran, Advocates
For the Respondent:Arijit Prasad, Mukesh Kumar Maroria, Advocates
For the Appellant :V. Sridharan, Aditya Bhattacharya, Mounica Kasturi, Apeksha Mehta, Sahil Parghi, Charanya Lakshmikumaran, Advocates
For the Respondent:Arijit Prasad, Mukesh Kumar Maroria, Advocates
Table of Contents
2. Liability for interest on duty — Contention that issue remained unconsidered versus argument that prior refund claim rejection attained finality. (Para 10 , 11 )
3. Abolition of CoD mechanism — Application filed immediately prior to judicial recall of CoD directions — Question of interest on duty remaining unaddressed by authorities. (Para 12 )
4. Issues left unaddressed due to the judicial abolition of a mandatory clearance mechanism must be remitted for consideration on merits. (Para 12 )
5. Appeal allowed — Impugned order quashed — Matter remitted to CESTAT for consideration of interest on duty. (Para 13 )
6. What was the legal impact of the ruling in Electronics Corporation of India Limited v. Union of India on the Committee of Disputes (CoD)?
The Supreme Court determined that the mechanism requiring approval from the CoD for government entities to pursue legal action had outlived its utility, subsequently recalling all previous directions that mandated such clearance. (Para 7 )
7. Can a substantive legal issue be considered if it was ignored due to the transition or abolition of a mandatory clearance procedure?
Yes, where a party sought clearance just before the abolition of the mandatory mechanism and the substantive issue was never addressed by any authority, the court may allow the matter to be remitted for consideration on its merits. (Para 12 )
JUDGMENT
B.R. Gavai, J.
The appeal challenges the order dated 12th November 2013 passed by the Division Bench of the High Court of Calcutta, thereby dismissing the appeal being CEXA No. 23 of 2013 filed by the present appellant, which was in turn filed, challenging the order dated 26th April 2013 passed by the Customs, Excise and Service Tax Appellate Tribunal, East Regional Bench, Kolkata (hereinafter referred to as the 'CESTAT'), dismissing the application filed by the present appellant seeking rectification of the order dated 30th October 2012 passed by the CESTAT. The application was filed on the ground that while passing the order dated 30th October 2012, the CESTAT did not notice the fact that the application filed by the present appellant was pending before the Committee of Disputes (for short 'CoD').
2. The appellant is a Public Sector Undertaking (for short 'PSU') of the Government of India. The appellant was served with a Show Cause Notice dated 4th August 2005 by the office of Commissioner of Central Excise by invoking the extended period of limitation and proposing to demand duty of Rs.15.66 crore in respect of the clearances made during the period from July 2000 to December 2004.
3. As per the relevant procedure, the appellant, being a PSU, was required to obtain the clearance from the CoD before taking legal action against other PSUs or Departments of the Government. The CoD, in its Minutes of Meeting dated 2nd November 2006, granted permission to the Company to pursue the appeal only on penalty aspect. As regards, the duty aspect, the CoD held that in the CENVAT Regime, the dispute was revenue neutral.
4. In pursuance of the permission granted, the appellant filed an appeal being Appeal No. Ex.-396/2006, before the CESTAT. After hearing, the appeal was allowed by the CESTAT setting aside the penalty vide order dated 11th June, 2007.
5. It is the contention of the appellant that in the meanwhile, the authorities issued a series of letters directing the appellant to deposit the duty amount. As such, the appellant deposited the duty demand of Rs.15.66 crore under protest.
6. The appellant, thereafter on 11th February 2011, filed a fresh application before the CoD, requesting for permission to pursue the abovesaid appeal with respect to duty aspect before the CESTAT.
7. This Court, subsequently, vide its judgment dated 17th February, 2011 in the case of Electronics Corporation of India Limited v. Union of India and Others, (2011) 3 SCC 404 held that the mechanism which was sought to be invoked for getting approval from the CoD, has outlived its utility. This Court, therefore, recalled the directions issued in the earlier orders recorded in the cases of Oil and Natural Gas Commission and Another v. Collector of Central Excise, 1995 Supp (4) SCC 541 dated 11.10.1991 Oil and Natural Gas Commission v. Collector of Central Excise, (2004) 6 SCC 437 dated 07.01.1994 and Oil and Natural Gas Corporation Limited v. City & Industrial Development Corporation, Maharashtra Limited and Others, (2007) 7 SCC 39 dated 20.07.2007.
8. The appellant, thereafter, moved a miscellaneous application being Misc. Application No. MA(ROA) 507/2011 for restoration of the appeal being Appeal No. Ex.-396/2006, which was dismissed by the CESTAT vide its order dated 11th June 2007. Vide the said order, the CESTAT had maintained the appeal with regard to the penalty aspect and dismissed the appeal with regard to duty demand as non-maintainable for want of clearance from the CoD. The restoration application was dismissed by CESTAT on 30th October, 2012. Aggrieved thereby, the appellant approached the High Court. The High Court, vide the impugned order, dismissed the appeal.
9. We have heard Shri V. Sridharan, learned Senior Counsel appearing on behalf of the appellant and Shri Arijit Prasad, learned Senior Counsel appearing on behalf of the respondent.
10. Shri Sridharan submitted that the question whether the appellant was liable to pay interest on the duty or
