2010 (10) TMI 971 - HC - Central Excise

Court rejects revisional application, upholds Civil Court jurisdiction. Importance of due diligence in review process.

The Court dismissed the revisional application, affirming the Civil Court's jurisdiction over the contractual dispute. The petitioner's failure to ... Ouster of Civil Court jurisdiction by special statute (Section 11D, Central Excise Act, 1944) - refund/recovery between buyer and seller for alleged excess excise collected - review jurisdiction and discovery of new and important matter under Order 47 Rule 1 CPC - review on the basis of subsequent event - setting aside ex parte decree under Order 9 Rule 13 CPCOuster of Civil Court jurisdiction by special statute (Section 11D, Central Excise Act, 1944) - refund/recovery between buyer and seller for alleged excess excise collected - Whether Section 11D of the Central Excise Act, 1944 ousts the jurisdiction of the Civil Court to entertain a suit for recovery of alleged excess excise collected by a seller from a buyer. - HELD THAT: - The Court held that Section 11D, properly construed, imposes duties on an assessee to pay amounts collected in excess to the credit of the Central Government and provides administrative machinery for determination and recovery by Central Excise officers. Section 11D does not address or provide a mechanism for resolving contractual disputes between buyer and seller concerning alleged overpayment and reimbursement under a contract. Exclusion of civil jurisdiction will not be inferred unless expressly provided or necessarily implied after examining the scheme and adequacy of remedies under the special Act. As Section 11D lacks the necessary mechanism to determine all questions of contractual right and liability between the parties, it does not oust the Civil Court's jurisdiction in the present suit for recovery of alleged excess excise collected by the petitioner. The Court therefore rejected the contention that the civil decree was a nullity for want of jurisdiction. [Paras 20, 21, 22]Section 11D does not oust the Civil Court's jurisdiction to adjudicate the plaintiff's suit for recovery of alleged excess excise collected; the defence of ouster is unsustainable.Review jurisdiction and discovery of new and important matter under Order 47 Rule 1 CPC - review on the basis of subsequent event - Whether the review of an ex parte decree is maintainable on the basis of a subsequent administrative order (order of Assistant Commissioner, Central Excise) which was passed after the decree was pronounced. - HELD THAT: - The Court applied the well-established principles governing review under Order 47 Rule 1 CPC: review is limited to discovery of new and important matter or evidence which, despite due diligence, was not within the applicant's knowledge at the time of the decree, or to an apparent error on the face of the record or other sufficient reason. A 'new' matter for review must be something that existed at the date of the decree and could not have been produced then; subsequent events which post-date a decree ordinarily cannot be the basis for review because they do not constitute 'discovery' of matters existing at the time of the order. The Court acknowledged the narrow exception carved out by later decisions where a subsequent event may show the order was obtained by a mistaken belief or misleading conduct, but observed that such exception is fact-specific and limited. On the facts, the Assistant Commissioner's order was passed while the application to set aside the ex parte decree was pending but the petitioner failed to place that order before the trial court or to notify the opposite party; the subsequent administrative order did not afford a ground for review of a decree that was right when made. [Paras 23, 24, 26, 29, 30]Review based on the subsequent administrative order is not a valid ground for review in this case; the review jurisdiction cannot be invoked merely because an event occurred after the decree.Setting aside ex parte decree under Order 9 Rule 13 CPC - finality and remedies after dismissal of application to set aside ex parte decree - Whether the revisional application seeking review of the ex parte decree should be allowed after the petitioner failed to set aside the ex parte decree under Order 9 Rule 13 CPC and subsequent appeal was dismissed. - HELD THAT: - The Court noted that the petitioner had contested the suit initially but did not pursue defence, resulting in an ex parte decree which the petitioner unsuccessfully sought to set aside under Order 9 Rule 13 CPC; an appeal against that dismissal was also dismissed. While a party is not precluded from seeking review after failing under Order 9 Rule 13, review jurisdiction is circumscribed by Order 47 and cannot be used to relitigate matters or to frustrate a decree where the statutory grounds for review are not made out. The petitioner delayed filing the review, did not disclose the subsequent Assistant Commissioner's order when it was available during earlier proceedings, and failed to show discovery of pre-existing matter unknown despite due diligence or any error apparent on the face of the record. [Paras 16, 17, 18, 19, 25]The revisional application for review is without merit and is liable to be dismissed.Final Conclusion: The revisional application is dismissed. Section 11D of the Central Excise Act, 1944 does not oust civil jurisdiction to adjudicate the contractual claim for recovery of alleged excess excise collected; review cannot be granted on the basis of a subsequent administrative order in the absence of grounds within Order 47 Rule 1 CPC, and the petitioner's review application is held to be without merit. Issues Involved:1. Validity of the ex parte decree.2. Jurisdiction of the Civil Court under Section 11D of the Central Excise Act, 1944.3. Grounds for review application and delay in filing the review.4. Applicability of subsequent events in review applications.Detailed Analysis:1. Validity of the ex parte decree:The petitioner initially contested the suit by filing a written statement but did not take further steps, resulting in an ex parte decree on July 30, 2002, directing the petitioner to pay Rs. 8.90 lacs. The petitioner filed an application under Order 9 Rule 13 CPC to set aside the ex parte decree, which was dismissed, and the dismissal was upheld by the Division Bench of the High Court. The petitioner then sought a review of the ex parte decree, citing the discovery of new evidence and legal grounds.2. Jurisdiction of the Civil Court under Section 11D of the Central Excise Act, 1944:The petitioner argued that the Civil Court lacked jurisdiction due to Section 11D of the Central Excise Act, 1944, which confers the power to adjudicate excise duty disputes on the Assistant Commissioner of Central Excise. The petitioner contended that the Civil Court's jurisdiction is ousted by necessary implication when a special authority is vested with the power to decide specific issues. However, the Court held that Section 11D does not apply to contractual disputes between a buyer and a seller over excess excise duty payments. The exclusion of Civil Court jurisdiction is not readily inferred unless expressly excluded or impliedly necessary, and the Central Excise Act does not provide a mechanism for such contractual disputes.3. Grounds for review application and delay in filing the review:The petitioner admitted a delay of 1455 days in filing the review application, attributing it to pursuing remedies under Order 9 Rule 13 CPC based on legal advice. The petitioner argued that the review was sought based on subsequent events, including an order by the Assistant Commissioner of Central Excise stating that no extra excise duty was charged. The Court emphasized that a review can be entertained if new and important evidence, not within the petitioner's knowledge despite due diligence, is discovered, or if there is an error apparent on the face of the record. The Court found that the petitioner did not bring the Assistant Commissioner's order to the Court's notice in a timely manner and failed to establish grounds for review.4. Applicability of subsequent events in review applications:The petitioner relied on judgments suggesting that subsequent events can be considered in review applications. However, the Court noted that subsequent events must be of such magnitude and importance that they negate the original order. The Court referred to precedents indicating that review cannot be based on events occurring after the decree if the decree was correct when made. The Court concluded that the subsequent order by the Assistant Commissioner did not justify a review, as it did not exist at the time of the original decree and the petitioner failed to demonstrate due diligence in presenting it earlier.Conclusion:The Court dismissed the revisional application, holding that the Civil Court had jurisdiction over the contractual dispute, the petitioner failed to establish grounds for review, and subsequent events did not warrant a review of the ex parte decree. The Court emphasized the parameters for review under Order 47 Rule 1 CPC and the necessity of demonstrating due diligence and the relevance of new evidence at the time of the original decree.