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TMI Blog2015 (11) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... hed away the question as regards applicability of the provisions of section 18(3) of the Act and the decisions interpreting the said provision on which reliance had been placed by the petitioner. The revenue officers are bound by the decisions of the higher authorities and cannot refuse to follow the same on the ground that the same is not acceptable to the department. The Supreme Court has also taken care to suggest as to what steps can be taken by the department to secure the interest of the revenue when the department has not accepted the decision of the higher authority, including the High Court. However, it is not open for the adjudicating authority or any other authority to ignore a binding decision of the court on the ground that the department has not accepted the same. The show cause notice has been issued for recovery of interest on differential customs duty as per the provisions of sub-section (3) of section 18 of the Act, and resort has been made to section 28 only for the purpose of recovery of such amount. Under the circumstances, unless it is held that the petitioner is liable to pay interest on the differential duty under section 18(3) of the Act, the questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to as the adjudicating authority ) in the following backdrop. 3. The first petitioner company imported 264 consignments of crude petroleum oil at the Port of Sikka and filed with the Customs, Bills of Entry for warehousing of the said goods. Pursuant to the said Warehousing Bills of Entry, the imported goods were deposited in the customs bonded warehousing located within the jurisdiction of the Commissioner of Customs and Central Excise, Rajkot, the second respondent herein. The goods were thereafter removed from the warehouse by filing ex-bond Bills of Entry for home consumption clearance. The ex-bonds Bills of Entry were subjected to provisional assessment under section 18(1) of the Customs Act, 1962 (hereinafter referred to as the Act ). The said provisional assessments were made during the period December, 1999 to February, 2005. 4. The provisional assessments came to be finalised by the Proper Officer of the Customs in 2011-12 and consequent upon such finalisation, the first petitioner paid the difference of duty between the duty finally assessed and the duty which had been provisionally assessed and paid in terms of section 18(2) (a) of the Act. Subsequent to the paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the assessee may have cleared the goods. It was only with effect from 13.7.2006 that such charging provision was introduced in the statute. Upon introduction therefor such provision created interest liability for the first time with effect from 13.7.2006. In absence of any indication in the statute itself either specifically or by necessary implication giving retrospective effect to such statutory provision, the court was of the opinion that the same cannot be applied to cases of provisional assessment which took place prior to the said date. The court was of the view that any such application would amount to retrospective operation of law. 6. The adjudicating authority in the impugned order observed that in the present case the demand of interest on differential duty is made under section 28 of the Customs Act and, accordingly, ignored the decision of this court and held that the petitioner was liable to pay interest of ₹ 17,55,20,841/- and imposed an equal amount of penalty under section 114A of the Act. Being aggrieved, the petitioners have filed the present petition. 7. Mr. J. C. Patel, learned counsel for the petitioner assailed the impugned order by submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d down the following propositions of law :- (11) From these four decisions, the following propositions emerge: (1) It is immaterial that in a previous litigation the particular petitioner before the Court was or was not a party, but if law on a particular point has been laid down by the High Court, it must be followed by all authorities and tribunals in the State : (2) The law laid down by the High Court must be followed by all authorities and subordinate tribunals when it has been declared by the highest Court in the State and they cannot ignore it either in initiating proceedings or deciding on the rights involved in such a proceeding : (3) If in spite of the earlier exposition of law by the High Court having been pointed out and attention being pointedly drawn to that legal position, in utter disregard of that position, proceedings are initiated, it must be held to be a wilful disregard of the law laid down by the High Court and would amount to civil contempt as defined in section 2(b) of the Contempt of Courts Act, 1971. 7.1 It was submitted that view taken by this court is that once the attention of the authority is pointedly drawn to the legal positio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of the petitioner that the impugned decision is incorrect and contrary to the law laid down by this court; however, such submission can also be made before the Tribunal and that merely because the decision has not been dealt with by adjudicating authority is no ground for approaching the High Court directly. Referring to the impugned order, it was submitted that the adjudicating authority has taken a view that the interest is sought to be recovered under section 28 of the Act. It was submitted that if the view taken by the authority is an erroneous view, the same does not entitle the petitioner to bypass the alternative remedy and to directly approach this court. Reliance was placed upon the decision of the Supreme Court in the case of Shyam Kishore and others v. Municipal Corporation of Delhi, (1993) 1 SCC 22, for the proposition that adequate remedy can be read in the statute, the plea of resort to writ remedy under Articles 226 and 227 must be discouraged. It was, accordingly, urged that the petition deserves to be dismissed on account of availability of an efficacious statutory alternative remedy and that even otherwise having regard to the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy. It is well established that, provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute, (Halsbury's Laws of England, 3rd Edn., Vol. 11, p. 130 and the cases cited there). The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in arriving at a conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings and decisions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until the aggrieved party has exhausted his other statutory remedies, if any. But this rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies. 12. In the present case, it is the case of the petitioner that the adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions interpreting the said provision on which reliance had been placed by the petitioner. 14. The adjudicating authority in the impugned order, on merits, has observed that the demand is not made under section 18(3) of the Act but the demand of interest is made under section 28 of the Customs Act. In this regard reference may be made to the decision of the Supreme Court in Commissioner of Customs v. Virgo Steels, (2002) 4 SCC 316, wherein the court has held thus: 8. We will next consider the requirement of Section 28 of the Act and the applicability of the principle of waiver to the said requirement of that section. While so doing, it is to be noted that our discussion of Section 28 of the Act is with reference to the section as it stood at the relevant time and not with reference to the existing Section 28 of the Act. The Tribunal by the impugned order has held that in the absence of a notice under Section 28 of the Act, the recovery of duty which has escaped collection, is impermissible in law. While accepting this argument, the Tribunal has placed reliance on a judgment of this Court in Collector of Customs v. Tin Plate Co. of India Ltd. (1997) 10 SCC 538. It is tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is not a substantive provision for levy of duty under the Act. The show cause notice also, accordingly, reveals that the interest on the differential amount is sought to be recovered under section 18(3) of the Act and that the provisions of section 28 are resorted to only for the purpose of making such recovery. Therefore, the charge is under sub-section (3) of section 18 of the Act and not under section 28 of the Act. 15. Before this court, in response to the averments made in the petition, an affidavit-in-reply has been filed on behalf of the respondents, which once again, fails to take into consideration the basis of the decision of the adjudicating authority and defends the impugned order on grounds not set out therein. In the affidavit-in-reply a stand is taken in paragraph 5 thereof that the decision of the High Court in the case of M/s. Goyal Traders (supra) has not been accepted by the department on merits as the amount involved in that case was below the threshold limit of ₹ 25 lakhs. Therefore, in the light of CBEC s instructions dated 20.10.2010 and 17.8.2011, the Department has not preferred to challenge the same before the apex court and it has been decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dly by the subordinate authorities. The mere fact that the order of the appellate authority is not acceptable to the department - in itself an objectionable phrase - and is the subject-matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws. 7. The impression or anxiety of the Assistant Collector that, if he accepted the assessee's contention, the department would lose revenue and would also have no remedy to have the matter rectified is also incorrect. Section 35-E confers adequate powers on the department in this regard. Under sub-section (1), where the Central Board of Direct Taxes comes across any order passed by the Collector of Central Excise with the legality or propriety of which it is not satisfied, it can direct the Collector to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order. Under sub-section (2) the Collector of Central Excise, when he comes across any order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the said decision is not binding upon it, the adjudicating authority has totally evaded the issue and has treated the proceedings as being proceedings under section 28 of the Customs Act only, without reference to section 18(3) of the Act under which the interest of differential duty was sought to be levied. 18. As noted hereinabove, the show cause notice has been issued for recovery of interest on differential customs duty as per the provisions of sub-section (3) of section 18 of the Act, and resort has been made to section 28 only for the purpose of recovery of such amount. Under the circumstances, unless it is held that the petitioner is liable to pay interest on the differential duty under section 18(3) of the Act, the question of making any recovery of such interest amount under section 28 of the Customs Act would not arise. The impugned order, which proceeds on the basis that the recovery is only to be made under section 28 of the Customs Act without reference to section 18(3) of the Act, therefore, not being in consonance with the show cause notice issued to the petitioner as well as the relevant statutory provisions, cannot be sustained. 19. This court is consci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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