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TMI Blog2004 (11) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the relief of issuance of writ of certiorari to call for the records of the third respondent, Deputy Commissioner of Customs, Chennai in detention notice F.No. S.59/ DEEC/485/95 Gr. 7(PT), dated 2-9-2004 and quash the same. 2. The writ petition in W.P.No. 26761 of 2004 is filed seeking the relief of issuance of writ of certiorari to call for the records of the first respondent, Customs, Excise and Service Tax Appellate Tribunal, (hereinafter referred to as "CESTAT") in final order No. 414 of 2004, dated 28-4-2004 and quash the same. 3. As the detention notice dated 2-9-2004 impugned in W.P.No. 36760 of 2004 is consequential to the order impugned in W.P.No. 26761 of 2004, both the writ petitions are taken together for consideration. 4. The material facts go as follows : The petitioner is a Company engaged in the manufacture of bulk drugs in its factory at Pondicherry and Cuddalore. For the purpose of manufacturing drugs, the petitioner imports raw material. The Notification No. 203/92, dated 19-5-1992 issued under Section 25(1) of Customs Act exempted whole of the duty payable on the inputs imported into India against a Value Based Advance Licence (hereinafter referred to as "VABA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the format for such reversal, the certificate to be issued by the Assistant Commissioner of Central Excise for proof of such reversal. 7. The petitioner reversed the Modvat credit for Rs. 75,21,586/- on 26-9-1995. Subsequently, two reversals have been made for Rs. 3,41,939/- and Rs. 1,23,303/- on 29-2-1996. A reversal had also been made for Rs. 18,27,721/- towards interest on 29-1-1997 as contemplated in the scheme. 8. On the petitioner further reversing credit for a sum of Rs. 1,49,266/- as directed, the Assistant Commissioner of Central Excise, Pondicherry issued a certificate dated 13-2-1997 to the effect that the petitioner reversed total Modvat credit of Rs. 81,46,490/- in respect of clearance of input (Ibuprofen) under VABAL from August, 1993 to 19-3-1995 and also debited an amount of Rs. 19,22,371/- as interest on the above credit. Out of the amount of Rs. 19,23,371/-, Rs. 18,27,721/- was reversed on 31-1-1997 and the balance on 6-2-1997. 9. After further verification, on 3-9-1997, the Assistant Commissioner of Central Excise, Pondicherry issued certificate in terms of Scheme and the circular, certifying that the petitioner has reversed the Modvat credit of Rs. 83,01,114/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yer as stated above. 14. The writ petitions were admitted on 21-9-2004 and an interim order of status quo has been granted, which was subsequently extended by order dated 1-10-2004. 15. The respondents filed counter affidavit raising objection as to the maintainability of the writ petitions and on merits it was contended that the petitioner having failed to comply with the conditions of the Amnesty scheme, is not entitled to any benefit. 16. Mr. V.T. Gopalan, learned Additional Solicitor General raised a preliminary objection as to the maintainability of these writ petitions and also on merits after completion of the argument of Mr. Habibulla Basha, learned Senior Counsel for the petitioner argued for dismissal of the writ petitions. The contentions are as follows : "1. The Order of the first respondent - CESTAT had merged with the order of the Supreme Court in the civil appeal. The writ petition under Article 226 cannot be maintained which otherwise amount to an appeal over the judgment of the Supreme Court. 2. The petitioner was allowed to withdraw the Civil Appeal by the Supreme Court on a request made by the petitioner to go before the first respondent by filing an application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the petitioner was not entitled to the benefits of Scheme ought to have remanded back the matter to the original authority for reconsideration of the issues on merits. But in a casual manner, rejected the contention of the petitioner with an observation that the bald statement of pro rata adjustment could not be granted and foreclosed the issue by itself. 6. The first respondent ought to have atleast by taking the role of the original authority, considered the objections raised by the petitioner to the show cause notice on its own merits. 7. Such an ex facie illegal order which contains mistakes apparent on the face of it has to be set aside." 18. I heard the argument of the learned counsel on either side and perused the material on record and also the case laws cited before this Court. I. Contention of maintainability of writ petition : 19. To bring home the objection as to the maintainability of the writ petition, learned Additional Solicitor General relied on the Apex Court decision in Kunhayammed and Others v. State of Kerala reported in 2001 (129) E.L.T. 11 (S.C.) = (2000) 6 SCC 359. He emphasized Paragraph No. 22 of the said judgment to contend that though a civil app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he content or subject matter of challenge laid or which could have been laid shall have to be kept in view." 22. The reliance of paragraph No. 22 of the above Rule by the learned Additional Solicitor General cannot further his point of merger. In that paragraph, while concurring by the two judges Bench of the Apex Court in V.M. Salgoacar and Brothers Private Limited v. C.I.T. [2000 (5) SCC 373], the Supreme Court has observed that when a special leave petition was dismissed, the Court did not comment on the correctness or otherwise of the order from which leave to appeal is sought. What the Court meant was that it did not consider it to be a fit case for exercising its jurisdiction under Article 136 of the Constitution. That certainly could not be so when the appeal is dismissed, though by a non-speaking order. The last of the above observation was very much relied on by the learned Additional Solicitor General to buttress his case. I am of the view that that sentence has to be considered in conjunction with the earlier sentence and not in isolation. From the exposition of law made by the Supreme Court in the above judgment, it is clear that the order allowing the petitioner to wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicated upon by a higher court before the subordinate court though in different proceedings." The facts of the present case are not even comparable with the cited case, rather in the present case, the Supreme Court itself granted the prayer for withdrawal of the appeal. 25. The second and third contentions raised can be decided together. It is the case of the petitioner that the petitioner in fact filed R.O.M. before the first respondent along with a stay application. The R.O.M. application has not been taken up for orders on the ground that a Senior Departmental representative from Delhi was going to argue the matter and has been adjourned periodically. In the mean time, the petitioner was visited with an order of detention and coercive steps were initiated against it. Such circumstances forced the petitioner to file the present writ petition. That fact was not at all disputed by the respondents. 26. Any order that might be passed in the R.O.M. could very well be put in issue under Article 226 of the Constitution of India. The existence of adequate or suitable alternative remedy available to the petitioner could be regarded as a factor, and could be considered while entertaining a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the effect that the exporter was manufacturing goods both for home consumption and also for export and it was not possible to segregate inputs utilised in the manufacture of final product which was exported, therefore it was permissible for the exporter to avail Modvat credit and then to reverse it on the ground that such a plea had not been taken earlier and could not be permitted to raise before the Supreme Court. No other point was raised and argued before the Apex Court in that case. In that factual matrix of the case, the Supreme Court having found on fact that the interest on the credit has not been deposited by 31-1-1997 held that the appellant therein was not entitled to the benefit of the scheme. On a reading of the above said Rule, it seems by mistake the amnesty scheme dated 3-1-1997 was projected as Circular and the subsequent circular dated 10-1-1997 giving out the formula for quantifying the Modvat credit and other modalities for reversal of such credit has been projected as Scheme before the Supreme Court, which is evident from paragraph No. 4 of the Rule. As number of different and distinguishing factors are there in the present case, which are being discussed bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause 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. 30. Yet another crucial factor is also available in this case. The petitioner has reversed not only the Modvat credit, but also the interest. Such reversal of Modvat credit and interest has been accepted and the requisite certificate as provided in the circular dated 10-1-1997 was issued by the Assistant Commissioner of Central Excise, Pondicherry on 13-2-1997. In that certificate, the Assistant Commissioner of Central Excise has informed the Assistant Commissioner of Customs that the petitioner had reversed total Modvat credit of Rs. 81,46,490/- that the petitioner has also debited a sum of Rs. 19,22,371/- as interest on the above credit. Out of the above amount of Rs. 19,22,371/-, Rs. 18,27,721/- was reversed on 31-1-1997 and the balance on 6-2-1997. On further verification, yet another certificate dated 3-9-1997 was issued by the Assistant Commissioner of Central Excise, Pondicherry to the effect that the petitioner had reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing community for the breach of the condition of the Scheme as well as the customs exemption Notification. 3. Enforcement action in terms of law may not only adversely affect export efforts of the country but would also cast a tremendous administrative burden on perusing a large number of adjudication cases. The Government, therefore, deems it expedient to relax the relevant condition of Customs Notification No. 203/92-Cus., ex-post-facto on compliance of following conditions :- (a) The concerned exporters reverse the Modvat credit incorrectly availed of by them on the goods exported under the Scheme, together with interest at the rate of 20% on the said amount of Modvat credit retained by them between the date of export and the date of reversal. (b) If reversal of Modvat credit and payment of interest as contemplated in condition (a) is completed by 31-1-1997 and thereupon no demand of Customs duty leviable on goods imported against the Value Based Advance Licence in question shall be payable. (c) The proposed relaxation will, however, not cover such merchant-exporters who had not declared the details of their supporting manufacturers and consequently, in whose cases the reversal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of interest", the further wordings "as contemplated in clause (a) makes the issue all the more different. What is contemplated in Clause (a) is reversal of Modvat credit together with interest. The clauses are to be understood in the context in which or the purpose for which they are incorporated. The purpose of incorporation of clause (b) and (d) are for providing the consequences of compliance of clause (a). 36. The Circular dated 10-1-1997 which was relied on by the department to come to the conclusion that interest has to be paid in cash is also did not improve the case of the Department as there is no such explanation offered in the circular. At the most in Para 3 of Circular it was stated interest has to be deposited, the word "deposited" cannot be construed as giving meaning as "payment in cash". Black's Law Dictionary (V Edition) defines the word "deposit" as follows : "to commit to custody or to lay down, to place, to put, to let fall (as sediment), to lodge for safekeeping, or as a pledge to entrust to the care of another." 37. It is well established and well recognised principle of interpretation that one should not concentrate too much on one word and pay too litt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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