2021 (4) TMI 21 - HC - Central Excise

Division Bench Upholds Exemption for Supplies to SEZ, Dismisses Writ Appeal

Bonfiglioli Transmissions Private Limited Versus Commissioner of Central Excise (Appeals-II), Additional Commissioner of Central Excise, Chennai, Commissioner of Central Excise, Chennai

The Division Bench admitted the writ appeal challenging the maintainability ruling by the Single Bench, citing exceptions to the restriction on ... Maintainability of petition - available of alternate remedy - whether the supplies effected by the appellant – dealer from the Domestic Tariff Area to Special Economic Zone were exempted from excise duty under Rule 19 of the Central Excise Rules, 2002? - HELD THAT:- The submission made by the appellant, stating that no orders have been passed in terms of the directions issued in the earlier writ petition, is a false statement. The learned counsel for the appellant would plead that there is no mistake on the part of the counsel in making such a statement as the receipt of the order accepting the directions issued, was not informed by the client to the counsel and the counsel also genuinely believed the statement, because the affidavit, which was drafted in the writ petition, contained an averment that no orders were passed and this was signed by Mr.T.K.Ravi, son of K.Omana Marar, who is the Head-Commercial of the appellant company. Furthermore, the learned counsel would submit that he was also of the bonafide belief that no orders were passed because in the counter affidavit filed in the writ petition by the Assistant Commissioner, there is no such averment. We are not inclined to accept it to be an inadvertent mistake, but a sheer case of irresponsibility on the part of the appellant in not placing the full facts before the Court. Under normal circumstances, we would have come down very harshly on the appellant, but we do not propose to do so because the appellant has now realized the mistake as mentioned by the learned counsel for the appellant and that they would pursue the appellate remedy available to them as directed by the Writ Court. While admonishing the appellant for their conduct and directing them to be extremely careful while dealing with Court matters and not to come to any adverse notice of this Court on any future occasion, we refrain from imposing costs or making any other strong observation against the appellant - the writ appeal is dismissed and the order passed by the learned Single Bench is confirmed. Issues Involved:1. Maintainability of the writ petition despite the availability of an alternate remedy.2. Exemption from excise duty for supplies from the Domestic Tariff Area to the Special Economic Zone under Rule 19 of the Central Excise Rules, 2002.3. Compliance with previous court orders and directions.Issue-wise Detailed Analysis:1. Maintainability of the Writ Petition:The writ appeal was filed challenging the dismissal of the writ petition by the Single Bench on the ground of alternate remedy. The Single Bench relied on the Supreme Court decision in Assistant Collector of Central Excise Vs. Dunlop India Ltd. However, the Division Bench noted that exceptions exist to the self-imposed restriction on entertaining writ petitions when alternate remedies are available. Citing the case of Mahindra & Mahindra Ltd. Vs. Joint Commissioner (CT), the Bench held that the writ petition was maintainable and admitted the writ appeal, deciding to consider the case on merits.2. Exemption from Excise Duty:The core issue was whether supplies from the Domestic Tariff Area to the Special Economic Zone were exempted from excise duty under Rule 19 of the Central Excise Rules, 2002. The appellant had previously succeeded in similar cases before the Tribunal for other periods. The appellant relied on Notification No. 67/1995, the circular issued by the Commissioner of Central Excise dated 11.2.2016, and Notification No. 25/2016-C.E. dated 14.6.2016, which substituted 'free trade zone' with 'special economic zone'. The court noted that the same issue had been favorably decided for the appellant in previous instances, highlighting a pattern of favorable judgments from the Tribunal.3. Compliance with Previous Court Orders:The appellant contended that the directions issued by the court in W.P.No.40100 of 2016 had not been complied with by the Department. The court observed that the Department had not filed any appeal against the order in W.P.No.40100 of 2016, and non-compliance could lead to contempt proceedings. However, the Additional Commissioner of GST & Central Excise filed an affidavit confirming compliance with the court's directions, indicating that orders had been passed and dispatched to the appellant. The court found the appellant's claim of non-compliance to be a false statement, emphasizing the appellant’s duty to inform their counsel about the received orders.Conclusion:The court dismissed the writ appeal, confirming the Single Bench's order. The appellant was admonished for their conduct and directed to pursue the appellate remedy available. The court refrained from imposing costs or making strong observations against the appellant, given their realization of the mistake. The court allowed the appellant to file an appeal before the Tribunal, with the period of limitation computed excluding the duration from the date of filing the writ petition until 15 days from receiving the certified copy of the judgment.