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2018 (8) TMI 2016 - HC - Central ExciseArea Based exemption - benefit of N/N. 32/99 and 33/99, dated 8-7-1999 was available for which the tax has been paid - constitutional validity of Section 154 of the Act, 2003 - It was alleged that for some months the petitioners made payment of the excise duty and they were not refunded the amount and that is why writ petitions were filed before the Gauhati High Court and certain interim orders were passed directing the provisional refund of the excise duty by the authorities to the petitioner-entrepreneurs - HELD THAT - It is not disputed that the constitutional validity of Section 154 of the Act, 2003 has been upheld by the Apex Court in the case of R.C. Tobacco (P) Ltd. 2005 (9) TMI 80 - SUPREME COURT and in furtherance thereof the demand notice which was raised by the respondents dated 3-6-2003 has been upheld by the Apex Court in the case of the present petitioner in M/S. DHARAMPAL SATYAPAL LTD. VERSUS DEPUTY COMMISSIONER OF CENTRAL EXCISE, GAUHATI OTHERS 2015 (5) TMI 500 - SUPREME COURT holding that there was always a requirement of issuance of show cause notice by the assessing authority before passing the order of recovery irrespective of the fact whether Section 11A of the Act is attracted or not but in the given facts of the present petitioner the Apex Court in unequivocal terms arrived to the conclusion as observed in para 45 that any infraction of principles of natural justice in the instant case and to make a fresh demand of amount recoverable after issuance of notice to show cause, would be a useless formality and is not going to serve any purpose after the law has been laid down by the Apex Court in the case of R.C. Tobacco (P) Ltd. 2005 (9) TMI 80 - SUPREME COURT . It may be further noticed that when the notices were issued by the assessing authority to deposit the outstanding interest in terms of Section 154(4) of the 2003 Act vide notice dated 30-9-2015 the petitioner submitted their objections and after affording opportunity of hearing in terms of the interim order of this Court dated 8-12-2015 the authorized representative of the petitioner appeared before the assessing authority on 25-4-2016 and the only grievance raised was about the calculation made as to whether both days are to be made inclusive or the date of assent dated 14-5-2003 has been excluded for the purpose of computing thirty days for calculating the interest in terms of Section 154(4) of the Act, 2003 and the offer made by the petitioner to be calculated from 14-6-2003 was also accepted by the assessing officer as being reflected from the detailed report dated 19-5-2016 and thereafter again a notice was sent to the petitioner on 2-5-2017 followed by 20-6-2017 and thereafter 14-9-2017 and that again became a subject matter of challenge in the instant petition - But to make it clear that the demand notices which were issued to the petitioner are in furtherance of the demand notice originally served dated 3-6-2003 for payment of interest in terms of Section 154(4) of Finance Act, 2003 and after the first demand notice dated 3-6-2003 has been upheld by the Apex Court, we find no reason to question the subsequent notices served upon the petitioner, more so, when the calculation was originally neither challenged before the Apex Court and nor before this Court but still when the opportunity was afforded the petitioner raised objection about one day of computation for the day on which the President s assent has to be excluded dated 14-5-2003 and that was noticed by the assessing authority before the impugned demand notices being raised and we find no reason for the petitioner in filing the present batch of writ petitions and questioning the demand notices. In the instant case, after the constitutional validity of Section 154 of the Finance Act, 2003 being upheld by the Apex Court in the case of R.C. Tobacco (P) Ltd. (supra), the appeals preferred by the petitioner also came to be dismissed questioning the constitutional validity of Section 154 of the Finance Act, 2003 and after the demand notice dated 3-6-2003 served upon the petitioner in exercise of power under Section 154 of the Finance Act, 2003 being upheld by the Apex Court repelling all his contentions in M/S. DHARAMPAL SATYAPAL LTD. VERSUS DEPUTY COMMISSIONER OF CENTRAL EXCISE, GAUHATI OTHERS 2015 (5) TMI 500 - SUPREME COURT it was expected from the petitioner to come forward and volunteer to deposit in terms of the demand notices served by the department and honour the view expressed by the Apex Court and this practice being adopted of assailing for futile reasons just to defer, for the sake of convenience being affordable to the litigant, such tendency which has now been developed, is deprecated by this Court. Petition dismissed.
Issues Involved:
1. Constitutional validity of Section 154 of the Finance Act, 2003. 2. Requirement of show cause notice under Section 11A of the Excise Act. 3. Calculation and recovery of interest under Section 154(4) of the Finance Act, 2003. 4. Compliance with principles of natural justice. 5. Validity of demand notices issued by the Excise authorities. Detailed Analysis: 1. Constitutional Validity of Section 154 of the Finance Act, 2003: The petitioners challenged the constitutional validity of Section 154 of the Finance Act, 2003, which retrospectively amended certain excise notifications, particularly affecting the exemption benefits previously enjoyed by the petitioners. The Supreme Court in R.C. Tobacco (P) Ltd. & Anr. v. Union of India & Anr. upheld the constitutional validity of Section 154, stating, "It may be that the retrospective operation may operate harshly in some cases, but that would not by itself invalidate the demand." 2. Requirement of Show Cause Notice under Section 11A of the Excise Act: The petitioners contended that the recovery proceedings initiated without a show cause notice violated principles of natural justice. The Supreme Court in Dharampal Satyapal Limited v. Deputy Commissioner of Central Excise held that although ordinarily a show cause notice is required, in this specific case, issuing such a notice would be a "useless formality" due to the binding precedent set by R.C. Tobacco (P) Ltd. Thus, the demand notice dated 3-6-2003 was upheld despite the lack of a show cause notice. 3. Calculation and Recovery of Interest under Section 154(4) of the Finance Act, 2003: The petitioners disputed the calculation of interest, arguing that the interest should be computed from a different date. The court noted that the interest calculation method used by the Department, which included leap years and specific dates, was reasonable and accepted. The Assistant Commissioner revised the interest amounts to ?16,36,03,935 for Unit-I and ?2,59,79,768 for Unit-II. The court found no merit in the petitioners' objections regarding the calculation of interest. 4. Compliance with Principles of Natural Justice: The petitioners argued that the demand notices were issued without granting an effective opportunity of hearing, violating principles of natural justice. The court referred to the Supreme Court's decision in Dharampal Satyapal Limited, which concluded that any infraction of natural justice in this case would be a "useless formality" and would not serve any purpose. The court reiterated that the demand notice dated 3-6-2003 was upheld, and subsequent notices were merely reminders for payment. 5. Validity of Demand Notices Issued by the Excise Authorities: The court examined the validity of the subsequent demand notices issued by the Excise authorities. It was noted that these notices were in furtherance of the original demand notice dated 3-6-2003, which had been upheld by the Supreme Court. The petitioners' objections to these notices were found to be without merit, as the original demand notice had already been validated by the highest court. The court emphasized that the petitioners should have complied with the demand notices instead of engaging in further litigation. Conclusion: The court dismissed the writ petitions, finding them wholly without substance. The petitioners were ordered to pay costs of ?50,000 each, to be deposited with the Secretary, State Legal Services Authority. The court deprecated the practice of litigants engaging in futile litigation to defer compliance with lawful demands.
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