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TMI Blog2021 (3) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... y, i.e., the respect for the jurisdiction of the courts of other countries - The doctrine pre-supposes that two or more courts have jurisdiction over the subject matter of the dispute but one among them is more appropriate and therefore the court would decline to pass any order in a court if it finds the other court to be more appropriate to decide the dispute as that court was a forum convenient to decide the lis between the parties. Since there are no disputed questions of fact involved in the present cases and issue arises solely on account of interpretation of the provision, I am of the view that the challenge to the impugned common order of the first respondent Settlement Commission located within the jurisdiction of this Court is maintainable before this Court under Article 226 of the Constitution of India. Levy of interest and imposition penalty under the provisions of the Central enactment namely the Central Excise Act, 1944 and the Rules made therein, namely CENVAT Credit Rules, 2004 and Central Excise Rules, 2002 - HELD THAT:- The present writ petitions can be decided on merits based on the available case laws instead of driving the petitioner to work out its remedy in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 8(3A) of the Central Excise Rules, 2002 applies only to a situation where an assessee defaults in payment of duty beyond 30 days due date as prescribed in the said Rules. Then, notwithstanding anything contained in CENVAT Credit Rules, 2004, such an assessee was required to pay excise duty on each consignment at the time of removal, without utilising the Cenvat Credit till the outstanding amount including interest thereon was paid in cash; and in the event of failure, it shall be deemed that goods have been cleared without payment of duty and the consequence of penalties as provided in these Rules were attracted. This is not applicable to the facts of the cases. Therefore, while upholding the impugned common order imposing penalty and redemption fine on the respective petitioners, I set aside the impugned common order insofar as it seeks to direct the petitioners to pay the balance amount of 22,44,953/- towards interest under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11AA of the Central Excise Act, 1944 - petitioners therefore are directed to remit the balance amount of penalty and redemption fine imposed in the impugned common order as a condition for settling t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The balance interest amount of ₹ 22,44,953/- shall be paid by the applicant within 30 days of receipt of this order and proof of payment furnished to Jurisdictional Commissioner. c) In the fact and circumstances of the case, the Bench imposes a penalty of ₹ 1,25,000/- (Rupees one lakh twenty five thousand only) on the applicant under the provisions invoked in the Show Cause Notice and grants immunity from penalty in excess of that amount. d) The Bench imposes penalty of ₹ 25,000/- (Rupees twenty five thousand only) on Shri T.S.Rathod, Managing Director, the coapplicant, under the provisions invoked in the Show Cause Notice. e) The amounts of penalty imposed in para 7(c) and 7(d) should be paid by applicant and co-applicant within 30 days of receipt of this order and proof of payment be furnished to Jurisdictional Commissioner. f) The Bench imposes a fine of ₹ 5,00,000/- (Rupees five lakhs only) in lieu of confiscation. The amount should be paid within 30 days of receipt of this order and compliance reported to the Jurisdictional Commissioner. g) The applicant and the co-applicant are granted immunity from prosecution under the Central Excise Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions. The petitioner company is from Andhra Pradesh. Barring the first respondent, second respondent is also from the State of Andhra Pradesh. 13. The petitioner company had imported capital goods during 2007-2008 and 2008-2009 and had installed them at its factory in Medak, in Andhra Pradesh. The petitioner company availed CENVAT credit on the CVD equivalent to additional excise duty payable on the like goods paid at the time of import of these capital goods. 14. The petitioner thus availed capital goods credit for an amount of ₹ 1,96,18,317/- under the provisions of the CENVAT Credit Rules, 2004. 15. The petitioner company subsequently removed these credits availed on capital goods to its Unit II in Baroda, Gujarat between 22.11.2011 and 14.03.2012 vide delivery Challan Nos.1 to 96. 16. It is the case of the petitioner company that it had become a sick company and therefore it had to shut down its operation in Medak District, Andhra Pradesh and therefore to consolidate its manufacturing activity, it removed these capital goods to its own factory in Baroda, Gujarat. However, it failed to pay an amount equivalent to the credit availed on these capital goods under Rule 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommission accepted the submission of the second respondent that the petitioner was liable to pay interest in terms of Explanation appended to Rule 8 of the Central Excise Rules, 2002 read with Rule 3(5) of the CENVAT Credit Rules, 2004. 25. The first respondent Settlement Commission also found that as per the report of the Jurisdictional Commissioner, the petitioner had already paid an amount of ₹ 1,23,56,697/- and a sum of ₹ 8 lakhs towards interest on 17.10.2013 as against ₹ 8,07,015/- towards interest. It therefore held that the balance interest of ₹ 22,44,953/- was to be paid by the petitioner. 26. It is submitted that the amount to be paid/reversed under Rule 3(5) of the CENVAT Credit Rules, 2004 as it stood was not a duty and therefore there is no question of payment of interest or penalties. 27. It is submitted that when the capital goods were removed between 22.01.2011 and 14.03.2012, there was no machinery provided under the provisions of the CENVAT Credit Rules, 2004 to either recover the amount or impose levy penalty on the petitioner. 28. It is submitted that Explanation to Rule 3(5) of the CENVAT Credit Rules, 2004 was amended for the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es could amount to a deprivation of substantial justice that would be a sufficient reason for the forum to hear the case even if another forum is the clearly more appropriate forum. 33. The doctrine pre-supposes that two or more courts have jurisdiction over the subject matter of the dispute but one among them is more appropriate and therefore the court would decline to pass any order in a court if it finds the other court to be more appropriate to decide the dispute as that court was a forum convenient to decide the lis between the parties. 34. "Forum Conveniens" has now been made applicable to Writ under Article 226 of the Constitution of India in terms of the decision of the Hon'ble Supreme Court in Kusum Ingot's case referred to supra. The Hon'ble Supreme Court in Kusum Ingot's case referred to supra has held that the court can decline to exercise its discretionary remedy on the ground of "forum conveniens". 35. It is to be underlined that this doctrine has to be invoked at the very threshold and not at the stage of final hearing. In this case, these writ petitions were filed in the year 2014. The objection is raised for the first time before this Court in 2020 after a lapse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC) has clearly laid down the law. It has held that an order passed by the Settlement Commission can be interfered if the order was found to be contrary to any provision of the Act. So for as the findings of fact recorded by the Settlement Commission or question or facts are concerned, the Court held that it is not open for examination either by the High Court or by the Hon'ble Supreme Court. 44. Since there are no disputed questions of fact involved in the present cases and issue arises solely on account of interpretation of the provision, I am of the view that the challenge to the impugned common order of the first respondent Settlement Commission located within the jurisdiction of this Court is maintainable before this Court under Article 226 of the Constitution of India. 45. Since the question involved in these Writ Petitions is only relating to levy of interest and imposition penalty under the provisions of the Central enactment namely the Central Excise Act, 1944 and the Rules made therein, namely CENVAT Credit Rules, 2004 and Central Excise Rules, 2002, I am of the view that the present writ petitions can be decided on merits based on the available case laws instead of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year or part thereof from the date of taking the CEVAT Credit, namely:- (a) for computers and computer peripherals : • for each quarter in the first year @ 10% • for each quarter in the second year @ 8% • for each quarter in the third year @ 5% • for each quarter in the fourth and fifth year @ 1% (b) for capital goods, other than computers and computer peripherals @ 2.5% for each quarter: Provided that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value 50. Thus, only after 01.04.2012, on removal of used capital goods, a manufacturer was liable to pay amount under Sub-Rule 5A to Rule 3 of CENVAT Credit Rules, 2004. 51. Rule 3(5) of the CENVAT Credit Rules 2004 read as under:- Rule 3 : CENVAT Credit (1)............. (2)............. ................. (5) When inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the amendment has already been extracted in paragraph No.29 of this order. However, for the sake of clarity, Notification No.1/2014-CE (NT) dated 08.01.2014 which substituted Notification No.3/2013-CE (N.T) dated 01.03.2013 is reproduced below:- [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 01/2014-Central Excise (N.T.) New Delhi, the 8th January, 2014 G.S.R. (E).- In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2004, namely:- 1. (1) These rules may be called the CENVAT Credit (First Amendment) Rules, 2014. (2) They shall come into force on the date of their publication in the Official Gazette. 2. In rule 3 of the CENVAT Credit Rules, 2004, - i. the Explanation occurring after the proviso to sub-rule (5B) shall be omitted; ii. in sub-rule (5C), after the words "production of said goods", the words "and the CENVAT credit taken on input se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 01.03.2013 for the first time. 62. Since the petitioner paid the aforesaid amount of ₹ 1,23,56,697/- on various dates between 29.05.2012 and 07.10.2013 and a further sum of ₹ 8 lakhs on 26.11.2013, the invocation of Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11AA of the Central Excise Act, 1944 on the date of Show Cause Notice dated 14.11.2012 was without jurisdiction. 63. However, these interpretation are relevant only against levy of interest under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11AA of the Central Excise Act, 1944 on the petitioner in the impugned order and for not exonerating the petitioner from the liability to reverse the amount of ₹ 1,23,56,697/-. 64. Since the removals were contrary to spirit of the provisions of the CENVAT Credit Rules, 2004, there are no merits in the submission of the learned counsel for the petitioners as far as the challenge to imposition of penalty or redemption fine under the impugned common order as a condition for granting immunity from prosecution under the provisions of the Central Excise Act, 1944 to the petitioners. 65. The amount of ₹ 8,07,015/- already paid by the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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