Perfect Creation India Private ... vs Union Of India & Ors
2023 Latest Caselaw 6833 Cal

Form No. J.(2)
Item No.41



           IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
                    CIVIL APPELLATE JURISDICTION
                           APPELLATE SIDE

                            HEARD ON: 06.10.2023

                          DELIVERED ON: 06.10.2023

                                    CORAM:

            THE HON'BLE CHIEF JUSTICE T.S. SIVAGNANAM
                               AND
        THE HON'BLE MR. JUSTICE HIRANMAY BHATTACHARYYA

                              MAT 1259 of 2023
                                     With
                            I.A. No. CAN 1 of 2023

                 Perfect Creation India Private Limited & Anr.
                                      Vs.
                             Union of India & Ors.
Appearance:-

Mr. S. Dasgupta
Mr. S. Sharma
Mr. Rishav Dutt
Mr. S. Bhattacharya              ...........For the Appellants


Mr. K.K. Maiti
Ms. Aishwarya Rajyashree
                     ..........For the Respondent/Customs Authority


                                  JUDGMENT

(Judgment of the Court was delivered by T.S. SIVAGNANAM, C.J.)

1. This intra-Court appeal by the writ petitioners is directed against the order

dated 6th June, 2023 in W.P.A. No.8929 of 2023. In the said writ petition

the appellants had challenged the order of adjudication passed by the

Assistant Commissioner, Service Tax, West Division, Service Tax-II

Commissionerate, Kolkata dated 21st June, 2017 by which the adjudicating

authority confirmed the demand of service tax of Rs. 39,93,475/- as

proposed in the show cause notice and after appropriating the amount,

which was deposited by the appellants, the remaining amount of Rs.

33,50,003/- was deducted. By the same order, penalty of Rs. 33,93,956/-

was levied.

2. As against the order of adjudication, the appellants had an effective

alternate remedy of filing an appeal before the Commissioner of Central

Excise, Kolkata. However, the appellants did not prefer such appeal. On the

contrary, the department preferred an appeal on the ground that penalty

equivalent to that of the service tax liability ought to have been imposed.

3. It appears that the appellants did not appear for the personal hearing on

four dates, which were fixed. However, subsequently, sought for

adjournment, which request was rejected by the Commissioner and the

appeal filed by the department was allowed and the penalty was enhanced

to Rs. 38,93,956/- by order dated 2nd November, 2018.

4. Though the adjudication order was passed in the year 2017 and the

enhanced penalty order was passed in the year 2018, both the orders till

date remained as paper orders and the respondent/department has not

been able to recover any money from the appellants.

5. In the writ petition the appellants contended that several documents were

seized and the appellants had requested the department to return the

documents so as to enable them to effectively contest the proceedings.

Certain other reasons were also set out in the writ petition.

6. As rightly pointed out by the learned senior standing counsel for the

respondent/department, the reason for not preferring an appeal or

challenging the order of adjudication, as submitted by the appellants in the

writ petition are far from being satisfactory.

7. As pointed out above, though the adjudication order was passed in the year

2017, till date the respondent/department has not been able to effect any

recovery from the appellants and the orders of adjudication have remained

only on paper. Thus, balancing the interest of both parties, more

particularly bearing in mind the interest of revenue, we find the case on

hand to be a peculiar case, where certain directions can be issued so that

the part of the amount payable by the appellants can be recovered by the

department. Simultaneously, the appellants can also be granted an

opportunity to question the correctness of the order of adjudication as well

as also make their submissions as to whether the penalty enhanced by the

Commissioner was warranted.

8. In the light of the above, the appeal stands disposed of by directing the

appellants to pay 50% of the Service Tax, which was determined and

demanded in the order of adjudication dated 21 st June, 2017. Such

payment shall be effected by the appellants within six weeks from the date

of receipt of server copy of this order.

9. If appellants complies with these directions, the appellants are granted

liberty to file an appeal before the Commissioner of Central Excise

(Appeals), Kolkata within thirty days from the date on which the payment is

effected and in the said appeal, the appellants are entitled to canvass all

grounds as to the correctness of the order of adjudication dated 21 st June,

2017 and the appellants shall also be entitled to contest the levy of penalty

as well.

10. Since the appellate authority, viz. the Commissioner of Central Excise

(Appeals), Kolkata while passing the order dated 2 nd November, 2018 had

rejected the request made by the appellants for an adjournment and

proceeded to take an ex parte decision, the Commissioner (Appeals) shall

also permit the appellants to canvass grounds as regards the levy of

penalty as well as the quantum of penalty leviable.

11. All legal issues are left open to be raised before the appellate authority viz.

Commissioner of Central Excise (Appeals), Kolkata.

12. As pointed out earlier, this order has been passed considering the peculiar

facts and circumstances of the case and shall not be treated as a

precedent.

13. There shall be no order as to costs.

14. Urgent Photostat certified copy of this order, if applied for, be furnished to

the parties expeditiously upon compliance of all legal formalities.

(T.S. SIVAGNANAM) CHIEF JUSTICE I agree,

(HIRANMAY BHATTACHARYYA, J.)

Raja/PG AR(Ct.)