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2001 (3) TMI 541
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....in .the nature of mandamus directing the respondents to allow petitioner No. 1 to pay the dues by utilising CENVAT credit standing in its credit as on the date fixed for payment of duty for clearance of final product. 2. Before adverting to the facts, we deem it proper to notice the relevant rules (as amended from time to time. Prior to 1-4-2000, Rule 49 of the Rules provided that central excise duty shall be paid by the manufacturer on clearance of excisable goods on consignment basis either by debit to the account current i.e. by cash deposit in PLA or by debiting it to register RG-23 Part-III i.e. by utilising Modvat credit. Rules 57AB to 57-Q contained the provisions for credit duty payable on the excisable goods used as inputs. Under these provisions, the manufacturers were entitled to take credit of the duty paid on inputs and utilised the same for paying the excise duty on final product. This was known as Modvat credit. Vide Notifications dated 31-3-2000 and 30-6-2000, Rule 49(1) was amended so as to provide for payment of duty on fortnightly-basis of removal of goods from the factory premises or from an approved place of removal. Simultaneously, Rule 57AB of the Rul....
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....quent fortnight. xx xx xx xx xx (b) The manufacturer shall discharge his duty liability by debiting account current or utilising CENVAT credit in the following manner, namely :- (i) the manufacturer shall assess the duty due on the excisable goods intended to be removed, for each consignment and shall enter the particulars of such consignments [in daily stock account maintained under rule 53]; (ii) the manufacturer shall indicate on each gate pass or invoice, issued under rule 52 or 52A, as the case may be, the amount of duty payable; (iii) at the end of each fortnight, the manufacturer shall determine the total amount of excise duty payable on the excisable goods removed during the ....
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.... of - (i) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) hereinafter referred to as the said First Schedule), leviable under the Act; (ii) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985, leviable under the Central Excise Act, 1944 in relation the goods falling under sub-heading Nos. 2401.90, 2404.99, 5402.20, 5402.32, 5402.42, 5402.43, 5402.52, 5402.62, 8515.00, 8702.10, 8703.90, 8706.21 and 8706.38 of the said First Schedule; (iii) the additional duty of excise leviable under Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978); (iv)  the additional duty of excise leviable under Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); and paid on any inputs or capital goods received in the factory on or after the first day of April, 2000. Explanation. - For removal of doubts it is clarified that the manufacturer of the final products shall be allowed CENVAT Credit Excisable duty leviab....
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....tieth day of April of that year; (B) is more than the actual duty liability for the said second fortnight of March, the excess amount may be adjusted against the duty liability for the first fortnight of the month of April of that year and where such adjustment is not possible for any reason; against the duty liability for any subsequent fortnight. xx xx xx xx xx (b) The manufacturer shall maintain an account current with the Commissioner and [shall discharge his duty liability by debiting such account-current or by utilising CENVAT credit], in the following manner : (i) the manufacturer shall assess the duty due on the excisable goods intended to be removed, for each consignment and shall enter the particulars of such consignments [amount of....
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.... excise duty on clearance of excisable goods on fortnightly-basis with a further concession of 5 days. In other words, excise duty in respect of clearance made during first fortnight of the month is payable by 20th of the said month and excise duty in respect of excisable goods during the 2nd fortnight is payable on 5th of the succeeding month. Clause (e) of Rule 49 provides for the consequences of default. It declares that if the manufacturer commits default in the payment of any one instalment beyond a period of 30 days from the date the instalment became due in a financial year or violates the requirement of full payment of instalments of third time in a financial year, whether in succession or otherwise, then he shall forfeit the facility to pay the duty in instalments under sub-rule (1) for a period of two months starting from the date of communication of the order passed by the proper officer or till such date on which all the dues are paid, whichever is later and during the said period, he would be required to pay the excise duty for each consignment by debit to the account current and in the event of any failure, it will be presumed that the goods have been cleared without ....
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....lenged the orders dated 8-2-2001 and 20-2-2001 on various grounds including the one of non-compliance of the rules of natural justice in general and the rule of audi alteram partem in particular. 7. The respondents have justified the impugned action by contending that forfeiture of facility available to the petitioners is the logical and necessary consequence of the default committed by petitioner No. 1 in making payment of duty within the stipulated period. Their stand is reflected in paragraph 6 of the preliminary objections of the written statement which reads as under :- "That the Notification No. 48/2000-CE (NT) was issued on 18-8-2000 whereby the amendment was carried out in Rule 57AB in sub-rule (1) in Clause (b) stating therein that "provided that while paying duty in the manner specified under sub-rule (i) of Rule 49 or sub-rule (i) of Rule 173G, as the case may be, CENVAT credit shall be utilized only to the extent such credit is available on the 15th day of a month for payment of duty relating to the first fortnight of the month and the last day of a month for payment of duty relating to the second fortnight of the month or in case of a manufacturer availing e....
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....ture of the facility would be defeated if the requirement of giving opportunity of hearing is read as implicit in the scheme of the Rules. 11.  We have given serious thought to the respective arguments/submissions. A reading of the plain language of Rules 49(1)(e) and 173G(1)(e) does not give an impression that rule of audi alteram partem is not required to be complied with before passing an order of forfeiture, but, in our opinion, the absence of express stipulation to this effect is not sufficient to absolve the competent authority from complying with the rules of natural justice. The two main principles in which the rules of natural justice are manifested, namely, Nemo Judex in Sua Causa and audi alteram partem have been read by the courts as an integral part of the concept of rule of law and fairness in State action. The reason as to why the courts have insisted on compliance of the rule of audi alteram partem in quasi-judicial and even in administrative matters is not far to seek. It is one of the fundamental rules of our constitutional set-up that every citizen is protected against the arbitrary exercise of power by the State and its officers. Duty to act judicially w....
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....g. Some of the observations made in that petition are extracted below :- "Although there are no positive words in the statute requiring that the party shall be heard, yet the justice of the common law will supply the omission of the legislature. The principle of audi alteram partem, which mandates that no one shall be condemned unheard, is part of the rules of natural justice. Natural justice is a great humanising principle intended to invest law with fairness and to secure justice and over the years it has grown into a widely pervasive rule affecting large areas of administrative action. The inquiry must always be "does fairness in action demand that an opportunity to be heard should be given to the person affected. The law must now be taken to be well settled that even in an administrative proceeding, which involves civil consequences, the doctrine of natural justice must be held to be applicable. The power conferred under S. 10(3)(c) Passports Act, on the Passport Authority to impound a passport is quasi-judicial power. The rules of natural justice would, in the circumstances, be applicable in the exercise of the power of impounding a passport. The same result would ....
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....ed in Section 18AA read with Section 18F of the Industries (Development and Regulation) Act, 1951 were invoked, rules of natural justice will have to be complied with by making the following observations : - "Section 18AA does not expressly in administrable and unequivocal terms exclude the implication of the audi alteram partem rule at the pre-decisional stage. The phrase "that immediate action is necessary" in Section 18AA (a) does not exclude absolutely, by inevitable implication, the application of this cardinal canon of fair play in all cases where S. 18AA (1)(a) may be invoked. Section 18F has also not the effect of excluding the rules of natural justice relating to prior hearing. 18. The argument of Shri Gumber that the object sought to be achieved by amending the Rules will be defeated if the rules of natural justice are read as a part thereof sounds attractive, but does not merit acceptance. A careful reading of the Rules in their totality shows that the main purpose of the amendments is to extend the facility of making payment of the duty on fortnightly basis instead of daily basis. The provision for forfeiture of the facility is intended to ensure rigorous com....