Dismissed

Commr.of Central Exciseandcustoms Visakapa v. Vijaya Prestressed Products(P)Pendurthy

Telangana HC24 Sept 2014CERC/9/2003

Case brief

AI extract

What is this about?

This Central Excise Reference Case was filed to determine the legality of issuing corrigendum notices to Show Cause Notice before personal hearing. The Court held that such issuance without valid reasons or reference to Section 11-A cannot be sustained and dismissed the reference.

What did the court decide?

Reference under Section 35(H)(1) of the Central Excise Act dismissed; no further adjudication required by this Court.

Commr.of Central Exciseandcustoms Visakapa Vs… — Writ and Judicial Review | Telangana HC (2014)

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THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE T.SUNIL CHOWDARY C.E.R.C.No.9 of 2003

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JUDGMENT: (Per LNR,J)

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This Central Excise Reference Case under Section 35(H)(1) of the Central Excise Act (for short ‘the Act’), as it stood at the relevant point of time, is filed with a prayer to direct the then Customs, Excise & Gold (Control) Appellate Tribunal, South Zonal Bench, Bangalore (for short ‘the Tribunal’) to refer the following question to this Court for answer:

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“Whether the issuance of the corrigendum to the Show Cause Notice before conducting personal hearing and adjudication of the Show Cause Notices read with such corrigendum is legal and proper or not.”

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Heard Sri Gopala Krishna Gokhaley, learned counsel for the applicant and Sri A.Sarveswara Rao, learned counsel for the respondent.

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The respondent is a manufacturer of concrete sleepers, which are supplied to Indian Railways. To ensure proper quality, the Railways supplies certain items, such as steel wires, brackets. The respondent however did not include those items in the cost of the sleepers, which in turn had its own impact upon the excise duty. For the items manufactured between October 1990 and March 1993, as many as six show cause notices were issued demanding the differential excise duty. The Assistant Commissioner ultimately passed an order, dated 16.09.1993 confirming the demand and fixing the liability at Rs.54,31,748/-. The respondent filed W.P.No.19306 of

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1993 challenging the said order. The writ petition was disposed of on 29.12.2004. This Court took the view that the inclusion of the items supplied by the Railways for manufacture of the sleepers, in the cost of the sleepers is valid. However, the order, dated 16.09.1993 was set aside on the ground that the Assistant Commissioner did not have the jurisdiction to impose tax of that magnitude. It was left open to the competent authority to pass orders. After remand, the Commissioner passed an order, dated 17.10.1996 confirming the earlier demand as well as the demand for the goods manufactured during the subsequent years. However, as many as 8 corrigendum notices were issued in the year 1996 proposing to revise the figures mentioned in the earlier show cause notices. That in turn had substantial financial effect. The consequential orders were passed. The respondent carried the matter to the Tribunal by filing Appeal No.E/363/97. The Tribunal upheld the inclusion of the items supplied by the Railways for manufacture of sleepers in the cost structure. However, the exercise sought to be undertaken through corrigenda was set aside. The relevant portion of the order, dated 25.09.2002 passed by the Tribunal reads:

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“As regards excess demand by the Commissioner, we find that there is some force in the arguments advanced on behalf of the assessee in respect of corrigendum to the notices. We find that corrigendum has been issued enhancing the demand without any valid reason as can be seen from the respective corrigendum. In view of this position, we do not find any justification in raising the excess demand as it was rightly pointed out by the appellant’s counsel. Accordingly the party succeeds on this point.”

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The Commissioner or other authorities under the Act

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are conferred with the power to make demand of duty, in exercise of power under Section 11-A of the Act, if any goods have escaped the duty. Even where the steps are sought to be taken under Section 11-A of the Act, necessary factual foundation must be laid. Issuance of corrigenda, that too without referring to Section 11-A of the Act and without mentioning any reasons, cannot be sustained. A typical corrigendum notice issued by the applicant discloses that it does not even mention as to why the particulars in a notice are sought to be substituted. Certain figures are stated and it is mentioned that the same shall substitute a particular portion of the earlier show cause notice. The respondent was totally at a loss to understand as to what constituted the basis for revision of those figures.

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Though the order of the Tribunal is in brief, its content is sound and we do not find any basis to require the Tribunal to refer the question to this Court. The C.E.R.C. is accordingly dismissed.

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____________________ L.NARASIMHA REDDY, J

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T.SUNIL CHOWDARY, J

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Date: 24.09.2014 JSU

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THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE T.SUNIL CHOWDARY

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C.E.R.C.No.9 of 2003

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Date: 24.09.2014 JSU

Commr.of Central Exciseandcustoms Visakapa v. Vijaya Prestressed Products(P)Pendurthy

Case brief

What is this about?

What did the court decide?

Commr.of Central Exciseandcustoms Visakapa v. Vijaya Prestressed Products(P)Pendurthy

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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