2016 (4) TMI 1075 - HC - Central Excise

Requirement to seek central excise registration - dual registration - Interpretation of Notification dated 28th February, 2014 - Notification interpreted erroneously and thereby the petitioner is forced to obtain a fresh or additional registration as importer of excisable goods when the same is not at all required as the petitioner holds a general and omnibus registration as a dealer - Held that - it is apparent that the Cenvat Credit Rules, 2004 and the Rule to which our attention has been invited are still there in place. The Notification which purports to amend sub-rule (1) and seeks to enforce a condition of dual registration would have to be interpreted, but any prejudging the issue by us is unnecessary and at this stage. Once Mr. Jetly has clarified that the petitioners would be free to place their interpretation of the Rule and equally that no dual registration is contemplated by law and that a general registration would give way to any insistence on a special registration as an importer, then, all the more we need not interfere in writ jurisdiction at this stage. Once the petitioners would be served with a show cause notice so also others and none of them would be prejudiced in any manner because of any affidavit being filed in reply to the petition or any position or stand being taken therein, then, all the more by accepting the statements of Mr. Jetly this Writ Petition is being disposed of. It would be fair that once not only the petitioners and others are proceeded against then in their absence and they being not before us, none should be prejudiced by any interpretation or stand taken by the respondents and placed before this Court. Therefore, it is directed that until and unless the show cause notices are served and they are adjudicated in accordance with law, no coercive measures shall be initiated by the respondents and to recover any sums from the petitioners or those others whom the respondents intend to proceed against. - Petition disposed of

Summary

Issues:
Seeking issuance of a Writ of certiorari or a writ, order, or direction in nature thereof for records pertaining to letters/notices dated 7th April, 2014 and 24th September, 2015; Interpretation of Notification dated 28th February, 2014 regarding registration as an importer of excisable goods; Allegations of actions being arbitrary, unconstitutional, and unsustainable in law; Clarification on Cenvat Credit Rules, 2004, particularly Rule 9(1) and its amendment; Concerns regarding reversal of credit without a show cause notice; Lack of clarity in the stand of the respondents leading to contradictory positions; Adjudication process and potential coercive measures for recovery of sums; Fairness in the adjudication process and the need for a speaking order.

Analysis:
The petitioners sought a Writ of certiorari or a similar direction to review the legality and validity of letters/notices issued by the respondents. The primary contention was the alleged misinterpretation of the Notification dated 28th February, 2014, leading to the requirement of additional registration as an importer of excisable goods, despite holding a general registration as a dealer. The senior counsel for the petitioners argued that the actions taken were arbitrary, unconstitutional, and unsustainable in law, emphasizing the need to prioritize the general registration over the specific importer registration.

The counsel relied on the Cenvat Credit Rules, 2004, specifically pointing out Rule 9(1) and its amendment through the subject Notification. Concerns were raised regarding the potential reversal of credit without issuing show cause notices to all affected parties, as indicated in previous statements. The Assistant Commissioner's clarification on the issue was deemed inconsistent and contradictory, creating uncertainty about the outcome of the proceedings. The court highlighted the importance of a fair adjudication process, ensuring that all parties receive show cause notices, personal hearings, and reasoned orders before any coercive measures are initiated for recovery of sums.

After careful consideration of the submissions and relevant documents, the court decided not to intervene at that stage, emphasizing the need for proper adjudication following the rule of law. It was clarified that no coercive measures would be taken until show cause notices were served and adjudicated in accordance with the law. The court directed that all contentions raised by the parties, including those in the Writ Petition, should be considered during adjudication, with a requirement for a speaking order to maintain transparency and fairness in the process.

The Writ Petition was disposed of with a clarification that the court had not expressed any opinion on the conflicting contentions presented, emphasizing the importance of a fair and unbiased adjudication process for all parties involved.