9911796707
TMI Blog2021 (2) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Rajasthan, where parts and components of wrist watches and clocks were being manufactured. The petitioner was registered with Central Excise Authorities at Udaipur. According to the petitioner, it was manufacturing the above-referred goods and removing them on payment of appropriate excise duties leviable thereon in accordance with the provisions of the Central Excise Act, 1944 (hereinafter referred to as 'the Act of 1944') and the Rules framed thereunder. 3.2 It is the case of the petitioner that it sold and delivered various parts and components to one M/s. Balaji Enterprises and had paid the appropriate excise duties on the goods sold and delivered to M/s. Balaji Enterprises and in furtherance whereof, central excise invoices were also issued for said sales and deliveries. According to the petitioner, M/s. Balaji Enterprises availed CENVAT credit of central excise duties paid by the petitioner on the goods sold and delivered. The final products, namely, wrist watches and clocks manufactured by M/s. Balaji Enterprises were exported on payment of central excise duties leviable on such final product. 3.3 M/s. Balaji Enterprises had exported 221 consignments of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vocate appeared and had made various submissions in support of its case. It has been averred that the case is still pending and final order has not been made. 3.6 According to the petitioner, the amount of Rs. 50,00,000/- which was deposited by it under protest during the investigation and subsequently considered to be an adequate pre-deposit by the Appellate Tribunal for hearing of the appeal on merits, was supposed to be returned by the Revenue inasmuch as, there has been no confirmed penal or other liability against the petitioner any longer. Accordingly, the petitioner made a formal application for refund of the amount of pre-deposit of Rs. 50,00,000/- on 24.7.2019 with the Deputy Commissioner of Central Excise, Daman. 3.7 Apropos the application dated 24.7.2019, the officer of the Deputy/Assistant Commissioner of Central Excise, Daman, issued a show-cause notice F.No.V/18-39/Refund/Div.III/2019- 20/R dated 27.8.2019 proposing to reject the refund claim on the ground that the claim made by the petitioner was premature. In response to the show-cause notice dated 27.8.2019, the petitioner filed its reply dated 2.10.2019, inter alia, emphasising that pre-deposit made for hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about the status of the proceedings before the concerned respondent. 6. Mr. Paresh M. Dave, learned advocate assisted by Mr. Amal Dave, learned advocate for the petitioner submitted that the investigation was initiated against M/s. Balaji Enterprises in the month of September, 2004. The petitioner deposited Rs. 50,00,000/- in the month of October, 2004; however, the amount was not deposited by it voluntarily, but the same was deposited under protest, owing to the pressure, force and coercion of the Revenue Officer. It is next submitted that the show-cause notice was issued on 15.2.2007, which is at large before the Adjudicating Authority for the purpose of adjudication. It is further submitted that the amount of Rs. 50,00,000/- deposited by it under protest, during the investigation, was liable to be refunded because the same was a deposit and not payment for discharging any liability legally fastened against the petitioner. Further, the Revenue had no jurisdiction or justification in retaining such amount deposited under protest during investigation considering the fact that there was no confirmed or concluded liability against the petitioner till date. 6.1 It is next submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the refund would not become due merely on remand of the matter by the Appellate Tribunal to the original Adjudicating Authority, as the amount was paid by the petitioner on his own assessment. 6.3 It is further submitted that the order dated 8.11.2019 passed by the respondent No.3 so also the order dated 27.2.2020 passed by the respondent No.2 are erroneous and in gross violation of principles of natural justice and also without jurisdiction. The respondent Nos.2 and 3 have lost sight of the fact that any amount deposited by a person during inquiry, investigation, show-cause notice proceedings, should be refunded when the person concerned claimed its refund more particularly, when there is no liability determined or fastened against such person. It is submitted that the petitioner, of no fault on its part, is deprived of its monies for more than 10 years and therefore, the unauthorised retention of money is against the spirit of Article 265 of the Constitution of India. 6.4 It is further submitted that the petitioner had filed its claim for refund vide an application dated 24.7.2019; however, even thereafter, the respondents have not refunded the same and therefore, the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x vs. Union of India reported in 2019 (365) E.L.T. 32 (P & H). It is submitted that while following the principle laid down in the case of Century Metal Recycling Pvt. Ltd. (supra) and Century Knitters (India) Ltd. v. Union of India reported in 2013 (293) E.L.T. 504 (P & H), the Hon'ble High Court of Punjab & Haryana has directed the refund of the partial amount deposited by the petitioner therein. Similarly, while placing reliance on the judgment in the case of Chitra Builders Private Limited vs. The Additional Commissioner of Customs, Central Excise & Service Tax & Anr. reported in 2013 (31) STR 515 (Madras), it is contended that the Hon'ble Madras High Court directed the respondents therein to return the sum of Rs. 2 crore collected on the ground that tax could not be collected from the assessee without an appropriate assessment order being passed by the authority concerned. 6.8 Reliance is also placed on the judgment in the case of Commissioner of Customs (Preventive) vs. Ghaziabad Ship Breakers Ltd. reported in 2010 (259) E.L.T. 522 (Guj.). Attention is invited to the questions (a) and (c) formulated by the Court. It is submitted that this Hon'ble Court was dealin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f interest, penalty etc. It is submitted that if the investigation was not concluded, the petitioner could have approached the authority immediately; however, the application has been filed by the petitioner for the first time in the year 2019. It was very much open to the petitioner to have filed an application before 2007 or could have approached the Court for the purpose of refund more particularly, when according to the petitioner, there was no liability fastened upon it. 7.1 It is submitted that as per the order dated 30.3.2011 passed by the Commissioner, Central Excise, the liability of Rs. 8 crore was fixed and as is evident from the record that the petitioner had preferred appeal solely on the ground that the said order has been passed without affording opportunity to the petitioner. While inviting the attention of this Court to the order dated 10.7.2019 passed by the Appellate Tribunal, it is submitted that the case of the petitioner before the Appellate Tribunal was that since the petitioner had gathered voluminous documents; vital for making defence reply and for which purpose the petitioner prayed for an opportunity to present the case before the Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 35F of the Act of 1944 does not have to be separately made, if deposit under self-assessment is equal or more than the pre- deposit amount. 7.4 While reiterating, it is submitted that the amount deposited by the petitioner during the course of investigation was on his own, against the self-assessment. In fact, the petitioner would also be liable to pay differential amount, if the determined liabilities were more than the voluntary deposit under self-assessment. It is submitted that as a result of the adjudication proceeding, vide order dated 30.3.2011, a penalty under Section 11AC of the Act of 1944 read with Rule 13 of the CENVAT Credit Rules, 2002 was imposed upon the petitioner who, thereafter preferred an appeal before the Appellate Tribunal along with stay application for stay and waiver of pre- deposit. The Appellate Tribunal, while hearing the stay application was of the opinion that the petitioner had deposited an amount of Rs. 50,00,000/- during the investigation i.e. before issuance of the show-cause notice and considered the same as enough pre-deposit to hear the appeal and under the circumstances, it granted stay against the recovery vide order dated 4.9.2012. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. 11. In another decision of this Court, in the case of Commissioner of Central Excise & Customs vs. J.M. Baxi & Co. reported in 2011 (271) E.L.T. 19 (Guj.), it reiterated the principle propounded in the Ghaziabad Ship Breakers Ltd. (supra) to the effect that any amount deposited during the pendency of an appeal would be by way of pre-deposit under Section 129E of the Customs Act, 1962 and has to be treated accordingly. This Court has held and observed that the controversy in issue has already been concluded against the Revenue by the decision rendered in the case of Ghaziabad Ship Breakers Ltd. (supra). 12. In another judgment in the case of NELCO Limited Vs. Union of India reported in 2002 (144) E.L.T. 56 (Bom.), the Bombay High Court, while relying on the earlier decision in the case of Suvidhe Ltd. vs. Union of India reported in 1996 (82) E.L.T. 177 (Bom.), has held that the amount deposited under Section 35F of the Act of 1944 is a condition precedent for hearing an appeal and it does not bear the character of duty, but has the character only of security deposit and the same ought to have been returned the day the appeal was disposed of by the authorities. The Bombay High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Apex Court in paragraphs 20, 21 and 22 observed thus:- "20. In Home Office v. Dorset Yacht Co. (1970) 2 All ER 294 Lord Reid said, "Lord Atkin's speech...is not to be treated as if it was a statute definition. It will require qualification in new circumstances." Megarry, J. in (1971) 1 WLR 1062 observed: "One must not, of course, construe even a reserved judgment of even Russell L.J. as if it were an Act of Parliament." And, in Herrington v. British Railways Board, (1972) 2 WLR 537 Lord Morris said: "There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances made in the setting of the facts of a particular case." 21. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. 22. The following words of Lord Denning in the matter of applying precedents have become locus classicus: "Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve exported 221 consignments of the goods manufactured by it during November, 2003 to September, 2004 and has claimed rebate of excise duties paid by it on the exported goods. The Central Excise authorities, after scrutinizing the rebate claims, sanctioned the same as well as paid the rebate for all the 221 exported consignments. Regular orders, sanctioning the rebate to the tune of Rs. 7,06,66,186/- (Rupees seven crore six lac sixty six thousand one hundred & eighty six only) have been passed by the officer concerned having jurisdiction. This led to the inquiries against M/s. Balaji Enterprises on the basis that rebate claims were erroneously paid to it inasmuch as, it is alleged that M/s. Balaji Enterprises had not received any duty paid inputs and materials from its suppliers, including the petitioner. The said inquiry/investigation led to issuance of the show cause notice dated 15.2.2007 by Directorate General of Central Excise Intelligence (hereinafter referred to as the 'DGCEI') to M/s. Balaji Enterprises as well as others, including the petitioner, inter alia, proposing imposition of penalty. 18. One of the issues which arose before the Adjudicating Authority was as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccumulated by MSN and the same was subsequently passed on to Balaji, Daman, by showing fictitious manufacture and clearance of goods on the payment of CE duty. 4.3.5.2 Balaji accumulated such illicit CENVAT credit in its CENVAT account and utilized the same for the payment of CE duty in respect of the goods shown to be exported through Krishna. The said illicit CENVAT credit was encashed by it by claiming the rebate of the said amount." 19. The Adjudicating Authority decided the issue by passing common order and has fixed individual liabilities. It has been further observed that amount of rebate was erroneously refunded to M/s. Balaji Enterprises although the said amount of rebate was distributed among the owners of M/s. Balaji Enterprises, M/s. MSN Enterprises, i.e. the petitioner and M/s. Krishna Impex and Om Prakash Punjabi, owner of Krishna Impex was mastermind, whereas, Shri Vijay Ajmera, proprietor of M/s. Balaji Enterprises and Shri Ved Prakash Wadhwani, authorized signatory of M/s. MSN Enterprises, i.e. the petitioner were his puppets. Paragraphs 4.3.8 and 4.3.9 read thus:- "4.3.8. I find that in the instant case SCN, the said amount of rebate claim erroneously refun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Balaji Enterprises, although the said amount of rebate was distributed among the owners of M/s. Balaji Enterprises, M/s. MSN Enterprises i.e. the petitioner and Krishna Impex. The Adjudicating Authority, after giving its discussion and findings on the basis of the material available on record, passed the order, confirming the demand of Rs. 7,06,66,186/- (Rupees seven crore six lac sixty six thousand one hundred & eighty six only) being the rebate claim erroneously refunded to M/s. Balaji Enterprises and the same was directed to be paid by it forthwith. Incrementally, interest was also directed to be paid by M/s. Balaji Enterprises. Moreover, the Adjudicating Authority imposed a penalty to the tune of Rs. 7,06,66,186/- (Rupees seven crore six lac sixty six thousand one hundred & eighty six only) on M/s. Balaji Enterprises. The extracts, relevant for the present purpose, of the Order-in-Original dated 30.3.2011, read thus:- "5. ORDER 5.1 I hereby confirm the said demand of Rs. 7,06,66,186/- (Rupees seven crore six lac sixty six thousand one hundred & eighty six only) being the rebate claim erroneously refund to M/s. Balaji Enterprises, Gala No.105, Jaynath Industrial Estate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sixty thousand five hundred & forty six only) on M/s. Shree Krishna Impex (noticee no.5), 1st Floor, Om Complex, Near Swastik Cross Road, C.G. Road, Ahmedabad, under Section 11AC of the CEA, 1944. 5.7 I hereby disallow the inadmissible CENVAT credit lying in the CENVAT credit account of M/s. Balaji Enterprises, Gala No.105, Jaynath Industrial Estate, Survey No.53/3A, Ringanwada, Daman and the same should be treated as non- est and struck off. 5.8 I hereby disallow the inadmissible CENVAT credit lying in the CENVAT credit account of M/s. MSN Enterprises, 95, Hiran Magri, Sector-11, Upaipur and the same should be treated as non-est and struck off. 5.9 Incrementally, I impose penalty of Rs. 7,86,33,200/- (Rupees seven crore eighty six lakh thirty three thousand & two hundred only) on M/s. Balaji Enterprises, Gala No.105, Jaynath Industrial Estate, Survey No.53/3A, Ringanwada, Daman, under Section 11AC of the CEA, 1944, read with Rule 13 of the CCR, 2002. 5.10 Incrementally, I impose penalty of Rs. 7,10,43,201/- (Rupees seven crore ten lakh forty three thousand two hundred & one only) on M/s. MSN Enterprises, 95, Hiran Magri, Sector-11, Upaipur, under Section 11AC of the CE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter, the Appellate Tribunal also directed the Adjudicating Authority to complete the de novo adjudication process within a period of four months from the date of the order. The relevant paragraph reads thus:- "4. Accordingly, the impugned order is set aside only related to the present appellants and matter is remanded to the adjudicating authority for passing afresh order subject to payment of cost of Rs. 50,000/-. Since, the matter is very old, and we direct the adjudicating authority to complete de-novo adjudication process within a period of 4 months from the date of this order. The appellant is also directed to co-operate in the proceeding. The payment of cost of Rs. 50,000/- to be made within 2 weeks and compliance to be reported on 05.08.2019." 23. This Court, for the sake of completeness, inquired from the learned advocate for the petitioner as regards the status of the appeals filed by M/s. Balaji Enterprises and others against whom the Adjudicating Authority has passed the order holding them jointly and severally liable. To which, the learned advocate for the petitioner informed the Court that since M/s. Balaji Enterprises failed to deposit the amount as directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te for the petitioner to issue necessary directions for completion of the proceeding pending before the Adjudicating Authority at the earliest, to which the learned advocate for the petitioner has expressed his reservation on the ground that the petition is filed solely for the purpose of claiming refund and not for seeking any direction to the Adjudicating Authority to decide the proceeding as expeditiously. 27. However, this Court, cannot turn a blind eye to the fact that the amount involved in the case, is huge. Vide order dated 18.1.2021, the learned Additional Solicitor General of India was requested to take instructions on two counts; firstly, the possible time to be taken for expeditious disposal of the case before the Adjudicating Authority; and secondly, the interest earned on the amount of Rs. 50,00,000/- for the entire period of time. In compliance of the order dated 18.1.2021, Mr. Devang Vyas, learned counsel has submitted a brief submission wherein, tentative schedule for cross-examination of the witnesses has been provided and the likely completion of the proceedings within a period of 30 days from the completion of final personal hearing. 28. In view of the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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