Calcutta High Court
Commissionerate vs M/S. Amit Metaliks Limited on 3 December, 2021
OD-45
CEXA/18/2021
IA No.GA/2/2021
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction (Income Tax)
ORIGINAL SIDE
COMMISSIONER OF CUSTOMS, CENTRAL
EXCISE & SERVICE TAX, DURGAPUR
COMMISSIONERATE
-Versus-
M/S. AMIT METALIKS LIMITED
Appearance:
Mr. Somnth Ganguli, Adv
Ms. Sukalpa Seal, Adv.
Ms. Sabnam Basu, Adv.
Ms. Priyamvada Singh, Adv.
...for the appellant.
Mr. J. P. Khaitan, Sr. Adv.
Mr. Saurabh Bagaria, Adv.
Mr. Niloy Sengupta, Adv.
...for the respondent.
BEFORE:
The Hon'ble JUSTICE T.S. SIVAGNANAM
-And-
The Hon'ble JUSTICE HIRANMAY BHATTACHARYYA
Date : 3rd December, 2021.
Re:CEXA/18/2021:
The Court : We have heard Mr. Somnath Ganguli, learned
counsel for the appellant/revenue. The appeal is admitted on the
following substantial questions of law for consideration:
"(a) Whether the learned Tribunal has acted in error
of its jurisdiction in holding that the pendency of SLP
against the decision of High Court and grant of stay by the
Supreme Court would not deface underlying basis of the
judgment itself, when there is a stay order passed by the
Supreme Court of India?
(b) Whether the order of the learned Tribunal is in
violation of the principles of natural justice and deprive the
appellant of a reasoned decision of the Learned Tribunal?
(c) Whether the learned Tribunal erred in setting
aside the confirmed demand arising out of removal of excisable
goods using CENVAT credit, when the respondent is in default
for more than 30 days from the due date in terms of Rule
8(3)(A) of the Central Excise Rules, 2002 which took away its
right to utilize CENVAT Credit in balance till the time it
pays the defaulted amount?"
Mr. Niloy Sengupta, learned Advocate for the respondent
accepts notice on behalf of the respondent and Mr. J. P. Khaitan,
learned Senior Counsel appears for the respondent. Since the
respondent is represented by their learned Advocate, service of
notice of appeal is waived.
The appellant shall file requisite number of informal
paper book prepared out of Court within eight weeks from date.
List the appeal after ten weeks.
Re:GA/2/2021:
We have heard Mr. J. P. Khaitan, learned senior Counsel
for the respondent/assessee. The issue pertains to action
initiated by the department in exercise of power under Rule
8(3)(A) of the Central Excise Rules. This rule stood struck doown
by several High Courts and appeals have been filed by the
Government before the Hon'ble Supreme Court and an order of
interim stay has been granted. Simultaneously, the department has
also been restrained from initiating recovery proceedings against
the assessee. The Tribunal by the impugned order held that merely
because of an order of interim stay has been granted that will not
wipe away the decision rendering the provision ultra vires and,
therefore, proceeded to allow the appeal filed by the assessee.
This issue needs to be considered and we have entertained the
appeal as one of the substantial questions of law raised by the
revenue is on this aspect. Learned counsel appearing for the
respondent placed reliance on the decision of the Hon'ble Division
Bench of this Court in the case of Pijush Kanti Chowdhury vs.
State of West Bengal & Ors. reported in 2007(3) CHN 178. The said
decision arose out of an order dismissing the writ petition
challenging the order of vesting under Section 14T(3) of the West
Bengal Land Reforms Act. Learned Senior Counsel for the respondent
submitted that in terms of the said decision, the grant of an
order of interim stay will not take away the effect of the
judgment declaring the provision as ultra vires and the Tribunal
was right in allowing the assessee's appeal.
The learned counsel for the respondent assessee has drawn our
attention to paragraph 13 of the judgment in the case of Pijush
Kanti Chowdhury (supra) and explained the effect of the order of
stay granted by the Hon'ble Supreme Court in a pending appeal and
whether it would amount to any declaration of law. The said
paragraph reads as follows:
"13. Therefore, the effect of the order of stay in a pending
appeal before the Apex Court does not amount to 'any declaration
of law' but is only binding upon the parties to the said
proceedings and at the same time, such interim order does not
destroy the binding effect of the judgment of the High Court as a
precedent because while granting the interim order, the Apex Court
had no occasion to lay down any proposition of law inconsistent
with the one declared by the High Court which is impugned."
In terms of the above decision it has been held that granting
an order of stay in a pending appeal before the Hon'ble Supreme
Court does not amount to any declaration of law but is only
binding upon the parties to the said proceedings and at the same
time, such interim order does not destroy the binding effect of
the judgment of the High Court as a precedent because while
granting the interim order, Hon'ble Supreme Court had no occasion
to lay down any proposition of law inconsistent with the one
declared by the High Court. In the case on hand the Tribunal
pointed out that pendency of a special leave petition before the
Hon'ble Supreme Court against a decision of the High Court of
Gujarat in the case of Indsur Global Limited vs. Union of India
2014/310 E.L.T. 833(Guj) and grant of stay by the Hon'ble Supreme
Court would not deface the underlying basis of the judgment. The
Tribunal also referred to the decision of the High Court of Delhi
in Principal Commissioner of Central Excise , Delhi-1 vs. Space
Telling 2017 (35) E.L.T. 189 [DEL] 189 (D) and in the said
decision the court had followed the decision of the Hon'ble
Supreme Court in Shree Chamundi Mopeds Ltd. vs. Church of South
India Trust Association reported at (1992)3 SCC 1. We have
entertained this appeal and admitted the appeal as we have to
decided three substantial questions of law. While doing so the
Court will consider the effect of the interim order of stay of
operation of an order passed by the Hon'ble Supreme Court qua the
decision of this Court in the case of Pijush Kanti Chowdhury
(supra) relied on by the Senior Counsel. Thus, we leave this
question to be decided in the main appeal. In the light of the
above discussion we are of the view that the recovery proceedings
should not be initiated by the department. Accordingly, there will
be an interim order restraining the appellant department from
initiating any recovery proceedings against the respondent.
The stay application is being GA/2/2021 is disposed of.
(T. S. SIVAGNANAM, J.)
(HIRANMAY BHATTACHARYYA, J.)
S.Das/As/S.Nath/mg.
