Delhi High Court
Commissioner Of Central Excise vs Gtc Industries Ltd And Anr. on 18 October, 2012
Author: S.Ravindra Bhat
$~1 to 3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CEAC 18/2011
+ CEAC 21/2011
+ CEAC 22/2011
COMMISSIONER OF CENTRAL EXCISE ..... Appellant
Through: Mr. Rajeeve Mehra, ASG with Dr.
Ashwani Bhardwaj, Mr. Rajeeve
Mehra, Mr. Gaurav Dhingra and Mr.
Ashish Virmani, Advocates.
versus
GTC INDUSTRIES LTD AND ANR. ..... Respondent
Through: Ms. Nisha Bagchi, Advocate.
CORAM:
MR. JUSTICE S. RAVINDRA BHAT
MR. JUSTICE R.V.EASWAR
S. RAVINDRA BHAT, J.: (OPEN COURT)
1. These three appeals are directed against a common judgment and order of
the Central Excise and Service Tax Appellate Tribunal ('CESTAT', for short)
dated 27.10.2010 in Excise Appeals No.5209/1992, 5236/1992 and 5235/1992.
The Tribunal had upheld the order in original and its findings, as to the liability of
M/s. GTC Industries Ltd. The allegations against M/s. GTC Industries Ltd. were
that its manufacturing activities were carried on by two units KCPL and JKCL. In
para 34.7, the CESTAT had noticed that GTC Industries Ltd. was controlling
since beginning the manufacturing and marketing. It further cast the liability upon
it (GTC Industries Ltd.). Later in para 35.3 of the impugned order the Tribunal
observed as under: -
"35.3 We have found that the manufacturing activity was carried
out by KCPL and JKCL. The goods manufactured were marketed
by GTC. The event of levy being manufacture, loss of Revenue was
attributable to the activity of manufacture and KPCL and JKCL
CEAC 18/2011, CEAC 21/2011 & CEAC 22/2011 Page 1 of 4
was liable to duty imposed by adjudication order. When
ownership of goods is not material for the purpose of levy,
following the Apex Court's decision Empire Industries Ltd. -
1985(20) ELT 179 (SC) we hold that the duty liability shall be of
the manufacturer i.e. KCPL and JKCL who had manufactured the
cigarettes."
2. The Revenue is in appeal in all these three cases contending that the
liability is that of GTC Industries Ltd. and not just of two units.
3. The assessees i.e. GTC Industries Ltd. and other two units KCPL and
JKCL were also aggrieved and preferred separate civil appeals in Supreme Court
being Civil Appeal Nos.1466/2011, 1468/2011 and 1469/2011. The Supreme
Court directed the pre-deposit of the excise duty by an order which was not
complied with. In these circumstances, the Court rejected the appeals in the
following terms: -
"IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
I.A. No. 2
IN
CIVIL APPEAL NO. 1466 OF 2011
M/S GTC INDUSTRIES LTD.(NOW
GOLDEN TOB. Appellant (s)
Versus
|COLLECTOR OF CEN.EXC.NEW DELHI Respondent (s)
WITH
I.A. Nos. 3-4
IN
CIVIL APPEAL Nos. 1468-1469 OF 2011
ORDER
By our order dated 25.04.2011, we had directed issue of
notice to the respondents subject to payment of the entire amount
determined by the Customs, Excise & Service Tax Appellate
Tribunal [CESTAT] within a period of three months from the date
of the said order. The appellant company, we are told has
deposited the amount of penalty levied against it but the
principal amount of `3.85 crores has not been paid. Mr. Mohan
Parasaran, learned ASG, appearing on behalf of the respondents,
argued that in terms of our order mentioned above, these appeals
should stand be deemed to have been dismissed without any
further reference to the court.
Counsel appearing for the appellant company, however,
disputed this position and contended that the CESTAT has not
determined the liability towards excise duty against the appellant.
All that was levied against the appellant was a penalty of ` 2.74
lakhs, which the appellant has already deposited.
A reading of para 34.7 of the order passed by the
CESTAT would show that the CESTAT has relying upon the
decision of this Court in New Horizons Ltd. & Anr. Vs. Union of
India & Others, 1995 (1) SCC 478, found that GTC had gained
at the cost of Revenue who was controlling KCPL and JKCL
from the stage of manufacture till marketing of the goods. The
CESTAT has further held that the appellant alone had gained at
the cost of Revenue as it was controlling the MRP and had
realised sale proceeds over and above the said price. Para 34.7
of the CESTAT Order reads as under:-
"Shri Parasaran also relied on the judgment of
Apex Court in the case of New Horizons Ltd. & Anr.
Vs. Union of India & Others, 1995 (1) SCC 478 to
argue that the Courts can always see through
corporate veil to ascertain the true nature of the
company. Doctrine of lifting veil, piercing the veil,
peeping or seeing through the veil is invoked when
the corporate personality is found to be opposed to
justice, convenience or interest of Revenue. We do
agree with him that Courts come to rescue of
Revenue where subterfuge to it is caused inside
corporate veil. We have noticed that GTC was
controlling KCPL and JKCL beginning from
manufacture till marketing of the goods. Such
finding alone was enough to hold that GTC had
gained at the cost of Revenue controlling the MRP
and realised sale proceeds over and above the MRP
declared."
In the light of the above and in view of the order passed by us
on 25.04.2011, we have no manner of doubt that the appellant
was duty bound to deposit the amount of excise duty determined
by CESTAT within a period of three months from the 25.04.2011, if
it was interested in pursuing the present appeals. Since the
appellant has failed to do so, the inevitably result of such failure is
the dismissal of these appeals. We accordingly dismiss these
appeals on account of failure of the company to deposit the amount
determined by CESTAT as excise duty.
....................................J.
[T.S. Thakur]
....................................J.
[Fakkir Mohamed Ibrahim Kalifulla]
New Delhi,
August 27, 2012."
4. This Court is of the opinion that in terms of the above order the grievance
cannot be gone into by this Court, since the entire controversy has been settled by
the Supreme Court as is evident from the above extract. The appeals are
accordingly disposed of.
S. RAVINDRA BHAT, J
R.V.EASWAR, J
OCTOBER 18, 2012
hs
