Why pressing dispute on an issue which was settled by Constitutional Bench of the Supreme Court on 11.05.1999? Senior Counsels must try to avoid un-necessarily litigation to avoid brain drain and wastage of money and time of all concerned.

[CA DEV KUMAR KOTHARI]

Why pressing dispute on an issue which was settled by Constitutional Bench of the Supreme Court on 11.05.1999? Senior Counsels must try to avoid un-necessarily litigation to avoid brain drain and wastage of money and time of all concerned.

Important references and links:

Section 3(1)  and 12 of the Customs Act, 1975- about levy of additional duty of customs.

Sections 2 and 3 of The Customs Tariff Act, 1975 .

Section 2A of Indian Tariff Act, 1934.

Union Of India And Ors. Versus M/s. Engee Indl. Services Co. Ltd. & Anr 2016 (4) TMI 490 - SUPREME COURT

Case referred to:

HYDERABAD INDUSTRIES LTD. Versus UNION OF INDIA - 1999 (5) TMI 29 - SUPREME COURT OF INDIA  -  Five judges  Constitution Bench judgment of the Supreme Court Court judgment dated 11.05.1999

MOTI LAMINATES PVT. LTD. Versus COLLECTOR OF CENTRAL EX., AHMEDABAD - 1995 (2) TMI 67 - SUPREME COURT OF INDIA

THERMAX PRIVATE LTD. Versus COLLECTOR OF CUSTOMS - 1992 (8) TMI 156 - SUPREME COURT OF INDIA

MINERAL & METALS TRADING CORPORATION OF INDIA Versus UNION OF INDIA AND OTHERS - 1972 (8) TMI 46 - SUPREME COURT OF INDIA

Minerals and Metals Trading Corpn. of India Ltd. v. Union of India [1972 (8) TMI 46 - SUPREME COURT OF INDIA]

Khandelwal Metal & Engineering Works v. Union of India [1985 (6) TMI 178 - SUPREME COURT OF INDIA].

Union Of India And Ors. Versus M/s. Engee Indl. Services Co. Ltd. & Anr 2016 (4) TMI 490 - SUPREME COURT (supra.)

This pertains to  appeals filed by the UOI ( Excise Department) in the years 2005, 2013 and 2014, although the matter was already settled by a judgment of the Constitution Bench of five judges of the  Supreme court  vide judgment dated 11.05.1999 in case of Hyderabad Industries Limited v. Union of India [1999 (5) TMI 29 - SUPREME COURT OF INDIA], (supra).

The Supreme Court rendered judgment on 04.04.2016 for cases filed in 2005 it took long period of eleven years, although the matter was settled long ago in favour of taxpayer, therefore, there was no need to file an appeal by the revenue and even if appeal was filed, it should have been withdrawn.

About Additional Duty:

This article is touching upon and is limited to the aspect of levy of additional duty, if the item imported was not excisable / taxable as manufactured or produced item in India.

The case involved import of ship for breaking and for no other use.

As per appellant (Revenue) also  undisputedly, excise duty is not payable and similar  product manufactured in India is exempted from excise duty, however, demand was raised  for levy of additional duty, and revenue carried matter to the Supreme Court.

The Supreme Court held that “ in view of the Judgement of this court in the case of Hyderabad Industries Limited v. Union of India [1999 (5) TMI 29 - SUPREME COURT OF INDIA], when excise duty is exempted, there is no question of payment of additional duty”.

It is worth to mention that the basis of the judgment of the High Court was that when excise duty is exempted, there is no question of payment of additional duty. For this purpose, the High Court has referred to and applied to the Constitution Bench judgment of the Supreme Court in 'Hyderabad Industries Limited v. Union of India' supra.

Revenue should have withdrawn / not pressed appeal on this issue:

It is well settled that a bench of the Supreme Court will generally follow judgment of another bench of the Supreme Court. And when a judgment of the Constitutional Bench of five judges of the Supreme Court is there, it has to be followed by a division Bench of the Supreme Court.

It is also worth to mention that though an appeal was filed against the judgment of the High Court, there was not even an attempt to distinguish the facts or applicable law from those considered in the judgment by the Constitutional Bench of the Supreme Court.

If a  ‘case status’ was properly prepared (as desired as well as  required /as per Rules at the time of filing an appeal and before hearing) , appeal on this issue should not have been filed because the matter was settled long ago in case of Hyderabad Ind. (supra).

In any case when case was fixed for hearing, or at least before the hearing counsels of revenue should have withdrawn appeal on this point or not pressed. This would have save time of the Supreme Court and also Senior Counsels who represented revenue.

 However, it appears that even Senior Counsels of Revenue are unable to overcome their greed, and go on pressing an appeal on an issue which has already been concluded by a constitutional bench. This causes lot of brain drain and wastage of time and money of all concerned.

Wrong practices:

It is unfortunate that many times wrong practices are adopted just to increase cases and disputes to earn more, more and more. Even without any merit and even on settled issues appeal after appeal are filed by revenue. Appeal of revenue are filed after consultation with concerned ministries, ministry of law and justice and Standing Senior Counsels. Senior counsels charge fees for consultation, and then for filing of appeal, preparation of documents and appearance. When a case has no merit, senior counsels must not advise to file an appeal. However, unfortunately, as we notice many appeals are filed even when matter is already settled. Counsels must not advise client wrongly just to drag mater in litigation. For such practices, Courts must award costs to compensate opposite party and a part of such cost must be payable by counsels who was force behind filing of frivolous case / appeals.