Gujarat High Court
M/S Gujarat State Fertilizers And ... vs Union Of India on 2 March, 2021
Bench: Sonia Gokani, Gita Gopi
C/SCA/9261/2018 ORDER
IN THEHIGHCOURTOF GUJARATAT AHMEDABAD
R/SPECIALCIVILAPPLICATIONNO. 9261of 2018
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M/SGUJARATSTATEFERTILIZERSANDCHEMICALSLTD
Versus
UNIONOF INDIA
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Appearance:
AMALPARESHDAVE(8961)for the Petitioner(s)No. 1,2
MRPARESHM DAVE(260)for the Petitioner(s)No. 1,2
MRPY DIVYESHVAR(2482)for the Respondent(s)No. 1
VIRALK SHAH(5210)for the Respondent(s)No. 2
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CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI
and
HONOURABLE MS. JUSTICE GITA GOPI
Date: 02/03/2021
ORALORDER
(PER: HONOURABLEMS. JUSTICESONIAGOKANI)
1. The petitioners have challenged the Order in
Original passed by the Commissioner of Central
Excise, Vadodara. Although, this order is
available on the ground of breach of principles
of natural justice, petitioner approached this
Court.
2. The Show Cause Notice dated 06.01.2017
involving the period from December 2011 to March
2016, has been issued upon the petitioners.
C/SCA/9261/2018 ORDER
According to the petitioners, the personal
hearing of the matter at the time of adjudication
of the Show Cause Notice, was on 17.02.2017 by
the Anand Commissioner, as the proceedings were
within the jurisdiction of Anand Commissioner.
The officer concerned, who had heard the parties
at the time of bifurcation of jurisdiction was
transferred to Vadodara Jurisdiction and thus the
Order in Original has been decided by the
Commissioner, C.G.S.T. And Central Excise,
Vadodara1. The order, which is impugned, was
passed on 15.03.2018. Thus, there are two fold
grievance on the part of the petitioners; firstly
the officer who had heard the petitioners
personally at Annand, has not decided the matter
and instead it is the Commissioner of Central
Excise, Vadodara, who adjudicated the matter and
secondly, there was substantial delay in
delivering the judgment after having heard the
parties. This long delay between the date of hearing
and adjudication of the matter, is the second
major grievance on the part of the petitioners .
C/SCA/9261/2018 ORDER
The period of 13 months, according to the
petitioner, is unsustainable under the law and
various judgments of the High Court are
supportive of this challenge on the part of the
petitioners. Hence, the petitioners have
approached this Court with following prayers:
"(A) That Your Lordships may be pleased to
issue a Writ of Certiorari or any other
appropriate writ, order or direction quashing
and setting aside OIO No.VAD-EXCUS-001-
COM-32-17-18 dated 15.03.2018
(ANNEXURE-"F') passed by the 2nd
Respondent therein;
(B) That Your Lordships may be pleased to
issue a Writ of Prohibition or any other
appropriate writ, direction or order, completely
and permanently prohibiting the Respondents,
their servants and agents from taking any
action against the Petitioner Company
pursuant to OIO No.VAD-EXCUS-001-COM-32-
17-18 dated 15.03.2018 (ANNEXURE-"F');
(C) Pending hearing and final disposal of the
present petition, Your Lordships may be
pleased to restrain the Respondents, their
C/SCA/9261/2018 ORDER
servants and agents from taking any action
against the Petitioner Company, including any
action of coercive recovery, pursuant to OIO
No.VAD-EXCUS-001-COM-32-17-18 dated
15.03.2018 thereby staying implementation
and execution of this OIO No.VAD-EXCUS-001-
COM-32-17-18 dated 15.03.2018;
(D) An ex-parte ad-interim relief in terms of
para 21 (C) above may kindly be granted.
(E) Any other further relief that may be
deemed fit in the facts and circumstances of
the case may also please be granted."
3. On issuance of notice, the respondents
appeared and filed its reply dated 20.09.2018,
wherein it is contended that the petition is not
maintainable, as the order impugned is available
under under Section 35 B of the Central Excise
Act, 1944 ('the Act' for short). According to the
respondents, the grievance on the part of the
petitioners that the order impugned is passed by
some other officer, who had not heard the matter,
will have no sustainability. The officer, Ms.
Mallika Mahajan, who passed the Order in
C/SCA/9261/2018 ORDER
Original, was the officer who had given the
personal hearing to the petitioners on
17.02.2017. On account of bifurcation of
jurisdiction, the proceedings when were placed
before the Excise Commissioner, Vaodara, she was
the one, who was made the Commissioner of Central
Excise, Vadodara and she delivered the order
impugned, which of course, is with some gap. It
is, however, further defended that the hearing
was concluded on 21.08.2017. The respondent also
issued a letter on 21.07.2017 calling for the
informations from the petitioners and the same
were furnished on 21.08.2017. Therefore, the
delivery of the order on 15.03.2018, cannot be
said to be a delay of 13 Months and therefore
also the petition deserves no entertainment.
4. A Rejoinder Affidavit is filed by the
petitioners, wherein it is averred by the
petitioners that for the further period from
April, 2016 to June, 2017, another Show Cause
Notice being No.V.Ch.31(4)01/GSFC/CommrI/201819
C/SCA/9261/2018 ORDER
dated 18.04.2018, has been served upon the
petitioner proposing to recover a sum of
Rs.10,80,65,688/ as Central Excise duty with
interest and penalty.
5. The factual as well as the legal issues in
second show cause notice have been identical. The
adjudication order was passed on 11.01.2019 by
the respondent no.2, confirming the central
excise demand of Rs.10.80 Crore with interest
(rounded off). The same had been challenged,
pending the present petition, by way of a
substantive Appeal before the Central Excise And
Service Tax Appellate Tribunal ('the CESTAT' for
short), Ahmedabad being the Appeal No.10576 of
2019 and the same has been allowed on merit as
well as on the ground of limitation on
28.02.2020.
It is, therefore, the say of the petitioner
that the Tribunal since has held in favour of the
petitioners entitling it to get the exemption
C/SCA/9261/2018 ORDER
which has been denied by the adjudicating
authority, a demand containing the Show Cause
Notice is not only unsustainable legally but also
barred by law of limitation, as the same is given
invoking larger period of limitation.
6. We have heard extensively learned advocate
Mr.Amal Paresh Dave with learned advocate,
Mr.Paresh Dave, for the petitioners, Mr.Parth
Y.Diveshvar, learned Central Government Standing
Counsel for respondent no.1 and Mr.Viral Shah,
learned standing counsel for the respondent no.2.
7. We could notice that here challenges
essentially are on two counts; firstly on the
ground that the officer having heard the
petitioners as Anand Commissioner not having
passed the Order in Original after the bifurcation,
as the same is passed by the the Commissioner of
Central Excise, Vadodara. Although, the person who
heard and delivered the same is the same officer and
secondly the delivery of judgment is in the gap of
C/SCA/9261/2018 ORDER
nearly 13 months from the date of hearing and the
date of disposal.
8. It is not in dispute that the order is
appealable under Section 35 B of the Central
Excise Act, 1944 which provides for appeal to the
Appellate Tribunal within three months from the
date on which the order sought to be appeal is
communicated. The alternative efficacious remedy
is available. Therefore, we are inclined to
relegate the parties to the CESTAT. We could not
oblivious of the averments of breach of principles of
natural justice and also the emphasis on the delay in
delivering the judgment and order by the adjudicating
authority; however, in the interregnum, since in the
case of the very petitioner, the second Show Cause
Notice for the subsequent period from April 2016 to
June 2017, which came against the petitioner when
challenged to the CESTAT, the judgment has been
delivered in favour of the petitioner on
28.02.2020. It is not in dispute that all
questions regarding factual matrix as well as
C/SCA/9261/2018 ORDER
legal issues raised in the first Show Cause
Notice and in the second Show Cause Notice are
identical. There has been no challenge further on
the part of either the revenue or the petitioner
to the said order of CESTAT dated 28.02.2020
delivered in Excise Appeal No.10576 of 2019.
9. The two questions that may arise when we
relegate the parties to the CESTAT; the first is
of the period of limitation, which is otherwise
of 90 days. The petitioner since was pursuing its
remedy before this Court, the question of
limitation would not come in his way. So far as
the aspect of the second issue with regard to
predeposit which is the amount equal to 7.5% of
the duty demand to be deposited under Section 35
F of the Act is concerned, this speaks of
mandatory deposit of service, percentage of
amount in dispute while filing the Appeal before
the CESTAT and the same has been brought on the
statute book from 06.08.2014. For getting the
relief from the CESTAT, minimum 7.5% of the duty
C/SCA/9261/2018 ORDER
of the demand made, is a must. Since the
discretion earlier which was with the CESTAT of
directing the nonpayment of the same by way of
speaking order, is no longer on the statute book.
10. It is urged before us that this Court
would alone have such powers, if at all there is
any order for waiver of the duty. The decision
rendered in case of Manoj Kumar Jha Vs. DRI, 2019
(365) E.L.T. 166 (Delhi), is sought to be relied
upon for the said purpose. It is urged by the
learned advocate, Mr.Amal Paresh Dave that unless
the amount of predeposit is dispensed with, it
would be impossible for the petitioner to seek
any relief from the CESTAT although, in this very
case, the issues have been held in his favour.
11. We notice the Communication dated 21.07.2017
called for from the petitioner by Superintendent,
Range1, Division3, CGST and Central Excise,
Vadodara. The reply on the part of the petitioner
C/SCA/9261/2018 ORDER
dated 21.08.2017 indicates the total value of the
sulphur at Rs.74,93,182.13 and duty involved
including the cess being of Rs.9,32,088.25.
Therefore, we pertinently inquired from the
learned standing counsel to get the details from
the respective authorities of the exact amount of
the duties, which the petitioner would be
required to pay as per the decision of the
CESTAT.
12. The Communication shared with us today by the
learned counsel Mr.Viral Shah, points out that as
per the order of the CESTAT dated 28.02.2020, the
demand within limitation on the quantity of
sulphur used in manufacture of Hydroxylamine
sulphate (HX/HAS) and Phosphoric Acid sold by the
petitioner on payment of the duty, if is
considered, the total duty including cess would
come to Rs.9,32,088.25/. Based on this figure,
the amount of predeposit at the rate of 7.5%
would come to Rs.3,63,784/. Subject to the
deposit of this amount within a period of One
Week from the date of receipt of a copy of this
order and filing of the Appeal within a period of
Four Weeks from the date of receipt of order,
C/SCA/9261/2018 ORDER
before the CESTAT, the petition is not being
entertained on merits while relegating the
parties to the CESTAT, without entering into the
merits of the OrderinOriginal and keeping all
issues open for the parties to agitate before the
Tribunal for it to adjudicate the merit in
accordance with law, without being influenced by
any of the observations made in this matter.
13. This order shall not be treated as precedent,
as in case of the very petitioner the CESTAT has
ordered in favour of the petitioner during the
pendency of the petition on the issues raised on
facts and law which are not only similar, but are
identical.
14. In view of the above observations and
directions, the present petition stands disposed
of. The disposal of this petition shall not come
in the way of the petitioner in pursuing the
remedy before the Tribunal.
Sd/-
(SONIAGOKANI,J.)
Sd/-
(GITAGOPI,J.)
M.M.MIRZA
