M/S.Tablets (India) Ltd v. The Assistant

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 25.10.2018 CORAM :

THE HONOURABLE MR. JUSTICE S.M. SUBRAMANIAM W.P.No.8629 of 2017 M/s. Tablets (India) Limited, 179, Tiruvottiyur High Road, Tondiarpet, Chennai - 600 081.

... Petitioner Vs The Assistant Commissioner, Commissioner of Central Excise, 459, Ananda Complex, Anna Salai, Teynampet, Chennai - 600 018.

... Respondent Prayer : Writ Petition filed under Article 226 of the Constitution of India for issuance of a Writ of certiorari calling for the records of the case relating to the impugned Show Cause Notice in C.No.IV/10/06/2016-Refund/ in Show Cause Notice No.01/2017 (R) dated 10.01.2017 issued by the Respondent and to quash the same.

For Petitioner : Mr.T.Ramesh For Respondent : Mr.A.P.Srinivas Standing counsel (Central Excise)

O R D E R

The Show Cause Notice issued in proceedings dated 10.01.2017 is under challenge in this writ petition.

2.The main ground raised on behalf of the writ petitioner is that the rebate was already sanctioned in favor of the writ petitioner pursuant to the orders passed by the Hon'ble Division Bench of this Court in W.A.No.103 of 2010 dated 26.08.2010. 3.The Hon'ble Division Bench of this Court granted the benefit of rebate in favor of the writ petitioner and accordingly, the amount of Rs.5,54,379/- had been sanctioned. Subsequently, the Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Chennai also passed an order on

24.02.2016, granting rebate in favor of the writ petitioner relying upon the order passed by the Hon'ble Division Bench of this Court. The relevant paragraphs by the Customs, Excise & Service Tax Appellate Tribunal, which is extracted hereunder: "8.When we refer to the conditions prescribed in Notification Nos.42/94, dated 21.09.1994 and 47/94, dated 22.09.1994, we find that the requirement in substance to be fulfilled by the manufacturer was that he should file a declaration with the Collector of Central Excise having jurisdiction over the factory of manufacturer describing the finished goods proposed to be manufactured along with the rate of duty leviable and the manufacturing formula shall refer to quantity or proportion in which the materials are actually used as well as the quantity.

The declaration should also contain the tariff classification, the amount of Excise duty paid/leviable on the materials so used both in words and figures in relation to the finished goods to be exported. As a matter of practice, the appellant being a regular exporter was stated to have been following the prescribed declaration available to Rule 13. Nevertheless, having regard to the fact that the conditions substratum identical and when the factum of export was not in dispute, we are at a loss to understand as to why the Assistant Commissioner failed to exercise the discretionary power vested in him under the proviso to Rule 12(1) while considering the appellant's claim for rebate applied under Rule 12(1)(b) of the Central Excise Rules.

Therefore, it is not the case of the authority that there was any other lapse or willful omission committed by the appellant in making the claim or that the factum of export was not proved. In this circumstances, when once the competent authority viz., the Assistant Commissioner was satisfied with the factum of export that the final products made by the appellant, his failure to exercise the discretionary power vested in him in the absence of any other valid reasons cannot be sustained. For the very same reason, the orders of the Appellate Authority viz., the first respondent, who have also failed to examine the said position cannot be justified. Therefore, the orders impugned in the writ petition as well as the Order-in-Original No.14/2001, dated 4.9.

are liable to be set aside and accordingly, the same are set aside. We therefore, direct the Assistant Commissioner of Central Excise "C" Division, Chennai Commissionerate-I to revive the appellant's application dated 24-04-2001 for claiming rebate under Rule 12(1)(b) for the sum of Rs.5,54,379/- along with interest applicable as per rules and pass orders in the light of the observation contained in this order expeditiously, preferable within four weeks from the date or receipt of a copy of this order." 4.The learned counsel appearing on behalf of the writ petitioner sates that the Hon'ble Division Bench of this Court has granted rebate, which was reiterated again by the Appellate Tribunal. The show cause notice now issued is untenable and the respondent has no jurisdiction to issue such a show cause notice contrary to the orders by the Hon'ble Division Bench as well as the Appellate Tribunal.

5.The learned standing counsel appearing on behalf of the respondent contended that against the order passed by the Hon'ble Division Bench, the Department filed Special Leave Petition before the Hon'ble Supreme Court of India in Civil Appeal No. 9038 of 2011. The said Civil Appeal is pending before the Hon'ble Supreme Court of India for adjudication. Against the order granting rebate, also the Department preferred an appeal before the Commissioner of Central Excise and the said appeal is also pending, the learned standing counsel is of an opinion that during the pendency of the appeal the competent authorities invoke Rule 11 under Section 11(A) of the Central Excise Act, 1944, issued the show cause notice and therefore, there is no infirmity as such.

6.This Court is of an opinion that admittedly the rebate had already sanctioned in favour of the writ petitioner. The benefit was extended to the writ petitioner. The Appellate Tribunal also confirmed the same by recording the order passed by the Hon'ble Division Bench. Admittedly, the Department preferred an appeal before the Hon'ble Supreme Court of India as well as before the Commissioner and the said appeals are pending for jurisdiction.

7.Under these circumstances, the authorities ought to have waited for final decision from the Hon'ble Supreme Court of India. During the pendency of the Civil Appeal, coercive action ought not have been taken against the writ petitioner in respect of the rebate already sanctioned in favour of the writ petitioner. This being the factual position, the impugned Show Cause Notice No.01/2017 (R) dated. 10.01.2017 is kept in

abeyance till the conclusion of the Civil Appeal No.9038 of 2011 pending before the Hon'ble Supreme Court of India. After the disposal of the said Civil Appeal, the parties are at liberty to proceed in accordance with the provisions of the Act. 8.With these observations, the writ petition stands disposed of. However, there shall be no order as to costs. Sd/- Assistant Registrar(CCC) //True Copy// Sub Assistant Registrar To The Assistant Commissioner, Commissioner of Central Excise, 459, Ananda Complex, Anna Salai, Teynampet, Chennai - 600 018.

+1cc to Mr.A.P.Srinivas, Advocate sr.73133 +1cc to Mr.T.Ramesh, Advocate sr.73601 W.P.No.8629 of 2017 vba[co] srg 28/11/2018