2004 (11) TMI 119 - HC - Customs

Maintainability of the writ of certiorari petition - EXIM - Violation of Notification No. 203/92, issued u/s 25(1) of Customs Act exempted whole of the duty payable on the inputs imported into India against a Value Based Advance Licence ( VABAL ) - Cenvat/Modvat credit - compliance with the Amnesty Scheme - HELD THAT - The petitioner had not suppressed any material, but explained the circumstance in which the petitioner was forced to approach this Court by invoking the jurisdiction under Article 226. Useful reference can be had to the judgment of the Supreme Court in the case of S.J.S. Business Enterprises Private Limited v. State of Bihar and Others 2004 (3) TMI 752 - SUPREME COURT 6. The power vested in the High Court under Article 226 of the Constitution to exercise judicial superintendence over the decisions of all Courts and tribunals is part of basic structure of the Constitution. Such an inviolable jurisdiction of the Court cannot be said to be impinged because of availability of alternate remedy, (vide Seven Judges Judgment of the Supreme Court in L. Chandra Kumar case 1997 (3) TMI 90 - SUPREME COURT . Thus, the petitioner cannot be non-suited for invocation of proceedings under Article 226. At the time of receipt of input, they would not be aware of the quantity of local raw material went into the exported products. The Modvat credit was taken only on goods cleared for home consumption. As and when the quantum of indigenous inputs used in exported goods was ascertained, the Modvat credit in respect of those raw materials were reversed. Condition No. V of Notification No. 203/92 would only apply to inputs covered by a particular licence. In respect of indigenous inputs, there could be no bar in taking Modvat credit as it was expressly allowed under the Modvat scheme. A substantial portion of the demand is barred by limitation as the provision to Section 28(1) of the Customs Act, 1962 would not apply. The same was the explanation in respect of the second show cause notice. This aspect of the matter had not been considered by the second respondent, obviously, because he was of the view that the petitioner was entitled to the benefit of the scheme dated 3-1-1997. But while reversing the order of the Commissioner, the first respondent failed to consider the other issues raised in the show cause notice as stated above. It is well established and well recognised principle of interpretation that one should not concentrate too much on one word and pay too little attention to other words. No word in any provision can be construed in isolation. Every word must be looked at generally and in the context in which it is used and gather the mens or sententia legis of the Legislation. Where the words are clear and there is no obscurity or ambiguity and the intention of Scheme is clearly conveyed, there is no scope for the Court to take upon itself the task of amending or altering the provision as the Court is only interpreting the Scheme, but not framing the Scheme. When the language is clear, the intention of Scheme has to be gathered from the language used and while doing so, what has been said and what has not been said has to be noted. The subordinate or subsidiary clause would yield to the substantive clause. The other contention that the compliance of the condition has to be considered in respect of each licence is also merits consideration as in the show cause notices itself the duty payable as against each licence was calculated and given separately. In addition to that, Clause (b) of the Scheme is also provided in the same way by stating that if the condition as contemplated in Clause (a) is completed by 31-1-1997 thereupon no demand of customs duty leviable on goods imported against the value based advance licence in question shall be payable . The VABAL licences is question or in dispute are 13 licences, which are the subject matter of two show cause notices stated above. Hence this contention is accepted. Therefore, the orders of the respondents are hereby set aside and the matter is send back to the second respondent to consider the issue of quantifying the duty taking into account the reversal of duty and interest by the petitioner as certified by the competent Assistant Commissioner, Central Excise and proceed further thereupon, by allowing the writ petitions. Accordingly, these writ petitions are disposed of. No costs. Consequently, the connected W.P.M.Ps are closed.

Issues Involved:
1. Maintainability of the writ petition.
2. Merits of the petitioner's claim regarding compliance with the Amnesty Scheme.

I. Contention of Maintainability of Writ Petition:

The respondents raised objections regarding the maintainability of the writ petitions, arguing that the order of the first respondent - CESTAT had merged with the order of the Supreme Court, and hence, a writ petition under Article 226 could not be maintained. It was also contended that the petitioner, having filed an application for rectification of mistake (R.O.M.) before the first respondent, should not have withdrawn the same and filed a writ petition under Article 226. Furthermore, a statutory appeal is provided under Section 130(7) of the Customs Act, and departing from that statutory provision, a writ petition under Article 226 is not maintainable.

The court held that the order allowing the petitioner to withdraw the appeal could not be compared to an order passed by the Supreme Court either modifying, confirming, or setting aside the order of the first respondent so as to plead merger. The court also noted that when the petitioner was entitled to file R.O.M., the question of merger did not arise. The existence of an adequate or suitable alternative remedy available to the petitioner could be considered while entertaining an application under Article 226, but it would not impinge upon the jurisdiction of the High Court. The petitioner had explained the circumstances that forced them to approach the court by invoking the jurisdiction under Article 226.

II. Contention on Merits:

The petitioner argued that they had reversed major portions of the Modvat credit together with interest as provided in the Scheme dated 3-1-1997 prior to the cut-off date, and such reversal had been accepted by the Assistant Commissioner, Central Excise Department. The subsequent direction by the Superintendent, Central Excise Department to make the payment of interest in cash was not in accordance with the Scheme. The petitioner also contended that the compliance or default of each license had to be considered independently.

The court noted that the petitioner had reversed not only the Modvat credit but also the interest, and such reversal had been accepted by the competent authority. The court held that the substantive clause (a) of the Scheme required the reversal of Modvat credit together with interest, and the subordinate clauses (b), (d), and (e) provided the consequences of compliance or non-compliance with clause (a). The court found that the Department had accepted the reversal of interest as in accordance with clause (a) of the Scheme.

The court also accepted the contention that the compliance of the condition had to be considered in respect of each license, as the show cause notices calculated and provided the duty payable against each license separately.

Conclusion:

The court set aside the orders of the respondents and remanded the matter back to the second respondent to consider the issue of quantifying the duty, taking into account the reversal of duty and interest by the petitioner as certified by the competent Assistant Commissioner, Central Excise, and to proceed further accordingly. The writ petitions were allowed, and no costs were imposed.

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