Delhi High Court
Nihon Nirman Ltd. vs Union Of India (Uoi) on 25 September, 1998
Equivalent citations: 1998 (103) ELT 488 Del
Author: R Lahoti
Bench: R Lahoti, C Mahajan
ORDER
R.C. Lahoti, J.
1. Though the learned Counsel for the respondents has made appearance on advance notice in view of the short controversy arising for decision, which is purely legal, the parties are heard finally.
2. RuleD.B.
3. The petition is directed against the orders dated 17-2-1998 and 22-6-1998 passed by CEGAT disposing of the petitioner's prayer under Section 35F of the Central Excises Act, 1944.
4. The petitioner is manufacturing white cement. The classification list filed by the petitioner and accepted by the respondents describes the petitioner's product as 'Rapid Hardening Portland Cement (White)'. The relevant period is February, 1991 to March, 1992.
5. The petitioner has paid excise duty @ Rs. 225/- per tonne to be covered by Central Excise Tariff Heading 2502.20. However, proceedings were initiated against the petitioner for recovering differential amount of duty by alleging that the excise should have been paid by the petitioner under Entry 23(ii), the product of the petitioner being covered by the residuary entry. Though the petitioner offered its contest, however, the issue was decided by the Commissioner of Central Excise, Jaipur adversely to the petitioner.
6. The petitioner sought for waiver of pre-deposit. The matter came up for hearing before the CEGAT and at that point of time the attention of the CEGAT was invited to the fact that the issue was awaiting decision by the Supreme Court in the cases of Indian Rayon Industries Ltd. etc. and M/s. J.K. White Cement Works as the issue was not decided till then. The application was disposed of by allowing partial relief only to the petitioner. On 12-5-1998 the Supreme Court pronounced its judgment. In the case of M/s. Indian Rayon Industries Ltd. and J.K. White Cement Works reported as Lordships of the Supreme Court have taken the view that if the white cement manufactured by any unit has 'rapid hardening properties' then it shall be classifiable under Heading 2502.20 and not under the residuary entry. The petitioner thereupon moved an application before the CEGAT inviting its attention to the judgment of the Supreme Court and seeking modification in the interim order so as to bring it in confirmity with the pronouncement of the Supreme Court. The Tribunal formed an opinion that the judgment having been delivered subsequent to the passing of its earlier order would not be a ground for a review or modification of the earlier order. Still the application for modification was allowed in part giving some further relief to the petitioner though it was said that the law laid down by the Supreme Court shall be taken up for consideration at the time of final hearing.
7. The aggrieved petitioner has come up before this court against the order of the Tribunal.
8. The facts set out in Para 4 of the earlier order dated 17-2-1998 (An-nexure III) passed by the Tribunal go to show that the petitioner had already paid a duty @ Rs. 225/- per tonne and even out of the additional demand raised by way of differential sum a further amount of Rs. 42,93,500/- was recovered from the petitioner.
9. As it is clear that the judgment of the Supreme Court applies squarely to the facts of the case the petitioner should not have been called upon to pre-deposit the amount of recovery. If in accordance with the law laid down by the Supreme Court the petitioner would not be liable to pay anything then insistence on pre-deposit would certainly amount to undue hardship. This assumes additional significance on account of the fact that the petitioner is already a sick unit in respect of which proceedings before BIFR have been initiated and more than half of the impugned demand was already satisfied by way of recovery from the petitioner.
10. For the foregoing reasons the petition is allowed. The impugned orders dated 17-2-1998 (Annexure III) and dated 22-6-1998 (Annexure VI) are hereby quashed and set aside. The Tribunal shall proceed to hear the appeal filed by the petitioner expeditiously and without insisting on pre-deposit.
11. The petition and CM. stand disposed of accordingly.
