TaxTMI 
TaxTMI 
2020 (12) TMI 1100
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....Collectorate, and permanently and completely prohibiting Respondent no.2, his servants and agents from taking any action against the Petitioner pursuant to Notices F.No.V.39/15-128/Dem/OA/ 15-16 dated 18.12.2015 (Annexure-"E"), F.No.V.39/15-10/ Dem/OA/2017-18 dated 21.06.2017 and F.No.V.39/15-44/ Dem/OA/17-18 dated 7.5.2018 (Annexure-"F"); (B) That Your Lordships may be pleased to issue a Writ of Certiorari or a Writ of Mandamus or any other appropriate writ, order or direction quashing and setting aside Order No.8/92 dated 24.09.1992 and Order No.28/4/94-CX dated 01.03.1994 issued by the CBEC and Trade Notice No.78/94 dated 09.05.1994, and also Notices F.No.V.39/15-128/Dem/OA/15-16 dated 18.12.2015 (Annexure-"E"), F.No.V.39/15-10/Dem/OA/2017-18 dated 21.06.2017 and F.No.V.39/15-44/Dem/OA/17-18 dated 7.5.2018 (Annexure-"F"); (BB) That Your Lordships may be pleased to issue a Writ of Certiorari or any other appropriate writ, order or direction quashing and setting aside O/O No. AHM-EXCUS-003-COM-009 to 011-20-21 dated 30.6.2020 (Annexure-"J-4") passed by the 2nd Respondent herein with all consequential reliefs and benefits; (BBB)Pending hearing and final d....
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....e market. Geo Grid fabrics are normally used in road construction activity, for providing stability and long life to the construction material used for roads. The writ-applicants have classified the Agro Shade Net as textile fabrics under the Heading No.6005 of the Central Excise Tariffs which, inter alia, covers "Wrap Knit Fabrics..." The other products i.e. Geo Grid fabrics are classified by the writ-applicants under the Heading No.5911 of the Tariffs as the "Textile Products and Articles, for technical uses..." 4. It is the case of the writ-applicants that both the products manufactured fall within the Heading Nos.6005 and 5911 respectively and are fully exempt from the payment of the excise duties. In such circumstances, it is the case of the writ-applicants that they have not discharged any excise duty for such goods right from the inception of manufacture, i.e. from around September 2007. 5. It appears from the materials on record that the Revenue Officers collected samples of both the products from the factory premises of the writ-applicants for the purpose of analysis and opinion of the Departmental Chemical Examiner. The Chemical Examiner, ....
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....t is proposed under the Heading 392690 on the basis of the above referred CBEC order. 9. It further appears from the materials on record that after issuing the show-cause notice dated 18.12.2015 for demanding excise duties for last five years, two further show-cause notices came to be issued dated 21.6.2017 and 7.5.2018 respectively for the subsequent period. 10. The writ-applicant filed its reply to the impugned show-cause notices referred to above and also preferred various representations addressed to the Principal Chief Commissioner of Customs including the Ministry of Finance, The Principal Chief Commissioner of Ahmedabad Zone and the jurisdictional Commissioner. In all the above referred representations, the writ-applicant furnished the list of several manufacturers of Gujarat with their respective addresses and also the details of manufacturers of the Agro Net and Geo Grid fabrics in the other States. 11. The representations along with necessary details and information were preferred to redress the grievance that the proceedings were initiated only against the writ-applicant and no one else similarly situated like the writ-applicant. 12. It is the case of the wri....
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.... Excise duty amounting to Rs. 3,65,69,096/- (Three Crores Sixty Five Lakhs Sixty Nine Thousand and Ninety Six only) not paid/ short paid, for the period April, 16 to June, 17 under provisions of Section 11-A of the Central Excise Act, 1944 read with Section 142 and 174 of the Central Goods and Services Tax Act, 2017 and order it to be recovered from the Service Provider; (iii) I also order them to pay interest at the prescribed rate as per provisions of Section 11AA of the Central Excise Act, 1944, as amended from time to time, read with Section 142 and 174 of the Central Goods and Services Tax Act, 2017 on the service tax demanded at (ii) above; (iv) I impose penalty of Rs. 3,65,69,096/- (Three Crores Sixty Five Lakhs Sixty Nine Thousand and Ninety Six only) (hundred percent of confirmed service tax) on the Service Provider for the period April, 16 to June, 17 in terms of the provisions of Section 11AC of the Central Excise Act, 1944 read with Section 142 and 174 of the Central Goods and Services Tax Act, 2017. Provided that if the service tax confirmed and interest is paid within 30 days of receipt of this order, penalty payable shall be 25% of the service tax s....
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....gh their Advocate on 25.6.2020. Thereafter, the Petitioner's Advocate personally appeared before the 2nd Respondent on 26.6.2020 and submitted an application dated 25th June, 2020 thereby informing the 2nd Respondent about the Writ Petition having been filed before this Hon'ble Court on 25.6.2020 for challenging all the show cause notices. The Petitioner's Advocate also requested the 2nd Respondent to keep the adjudication in abeyance for two weeks, because hearing of the petition before this Hon'ble Court was likely to take some time. The Petitioners have kept the 2nd Respondent informed about all the developments like closure of the High Court for 3 days that were taking place with regard to listing of the Writ Petition by personally speaking to him; and the fact that the petition was allowed to be circulated for hearing on 21.7.2020 was also conveyed to the 2nd Respondent herein on behalf of the Petitioners. This Hon'ble Court heard the petition (i.e. the present petition) on 21.7.2020 and made an order restraining the 2nd Respondent from taking any final decision in the case. On advance copy of the petition, the Standing Counsels for the Respondents was also p....
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..... 21. Mr.Dave would argue that there is a clear violation of the statutory provisions of Section 37C of the Central Excise Act in serving the impugned order in original, and in such circumstances, the service of the order of the impugned order itself deserves to be declared as illegal. 22. By referring to Section 37C of the Central Excise Act, Mr.Dave would argue that any decision or order has to be served by tendering it or sending it by registered post acknowledgement due or by speed post with the proof of delivery or by courier approved by the Board to the person concerned from whom it was intended or his authorized agent. If it is not possible to serve the order in the prescribed procedure as referred to above, then by affixing a copy thereof at some conspicuous part of the factory or warehouse or any other place of business or usual place of residence of the person. 23. Mr.Dave would argue that in the case on hand straightway the method of service referred to above in clause (b) of Section 37C (1) of the Act has been resorted to. Mr.Dave vehemently argued that the scheme of Section 37C has been interpreted by various High Courts, and in this context, he has referred t....
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....l Excise Tariffs but the same has been considered by the Apex Court in the case of M/s.Porritts and Spencer (Asia) Limited, reported in 1983 (13) ELT 1607 (SC). In the said judgment, it has been laid down in paragraph 6 that when yarn, whether cotton, silk, woollen, rayon, nylon or of any other description or made out of any other material, is woven into fabric, what comes out is a textile. It has been further held in the said case that whatever be the mode of weaving employed, the woven fabric would be "textile". It is further held that the use to which it may be put is also immaterial and does not bear on its character as a textile. 28. Having regard to the above, Mr.Dave would argue that the raw-material used for making a fabric is immaterial and what is relevant is the method of bringing a final fabric into existence. He would submit that regardless of the raw-material, when any material is woven into a fabric, such fabric would be "textile". It is vehemently argued that the order issued by the Board and the Trade Notice of the Ahmedabad Collectorate is based only on the nature of the initial raw-material used for the fabrics and, therefore, are contrary to the general un....
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....der in Original along with the impugned show-cause notices be quashed and set-aside. SUBMISSIONS ON BEHALF OF THE RESPONDENTS : 33. Mr.Parth Bhatt, the learned Additional Standing Counsel for the Union of India, has vehemently opposed this writ-application. Mr.Bhatt has raised a preliminary objection with regard to the maintainability of this writ-application on the ground that the Order in Original is appealable. According to him, there is a statutory appeal provided against such order before the appellate tribunal under Section 35B of the Central Excise Act. 34. According to Mr.Bhatt, as there is an alternative remedy of appeal available to the writ-applicant, this Court may not exercise its writ jurisdiction under Article 226 of the Constitution of India. 35. Mr.Bhatt would submit that without prejudice to his preliminary contention as regards the maintainability of this writ-application on the ground of availability of alternative remedy, even otherwise on merits the writ-applicants have no case. He would argue that the Agro Shade Net and Geo Grid fabrics could be termed as articles of plastics because both the products were made of the HDPE strips of less than 5 mm....
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....against any circular or order or trade notice issued by the Board or the Collectorate ? 4. Whether the impugned Order in Original could be said to have been vitiated on account of non-compliance of the mandatory provisions of Section 37C of the Central Excise Act, 1944 ? 40. A Coordinate Bench of this Court, in the case of M/s.Darshan Boardlams Ltd. (supra), to which one of us (J.B.Pardiwala, J.) was a party and also the author of the judgment, had, by and large, the occasion to deal with identical submissions as raised in the present case. In Darshan Boardlams Ltd. (supra) also a preliminary objection was raised as regards the maintainability of the writ-application on the ground of alternative efficacious remedy available to the writ-applicant in the form of an appeal under Section 35B of the Act before the appellate tribunal. While negativing such preliminary objection with regard to the maintainability of the writ-application, this Court held as under : "64. Before entering into the merits of the main issue, we propose to deal with the preliminary contention of Mr.Oza, learned senior counsel appearing for the Revenue as regards the maintainability of this p....
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....hich the High Court could exercise its writ jurisdiction in spite of availability of the alternative remedy, the Supreme Court observed thus : "...that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies; (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice or, (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged." 67. We are of the view that on the facts of the present case, the preliminary contention or objection as raised by the Revenue deserves to be rejected as it cannot be said that exercise of writ jurisdiction in the present case is unwarranted. As rightly pointed out by the learned counsel appearing for the petitioner that the controversy in the instant case centers around the issue, that if the goods in question are chargeable to nil duty in other States of the country and....
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....ctions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order of proceedings are wholly without jurisdiction or the vires of an Act is challenged....." 73. In Ambica Meta Yarn Manufacturing Company (supra), a Division Bench of this High Court made the following observations: "...The High Court will not therefore ordinarily interfere in exercise of the power under Article 227. 'Not ordinarily' of course does not mean 'never'. In some cases the High Court might consider it expedient in the interest of justice to do so. For instance, in two types of cases the High Court might interfere (unless the Revenue is prepared to stay the recovery during the pendency of proceedings before the appellate or revisional authority), viz : (1) Where the excise authoriti....
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....rs and, hence, may not be appropriate for a writ court to entertain a petition under Article 226 of the Constitution of India. 76. We have noticed that in the said case, the adjudicating authority had passed an order holding that the assessee had inflated the assessable value of their product by mis-declaring the actual place of removal and further included the element of transportation cost to the assessable value of the goods cleared for delivery from the place of removal i.e. factory premises to the buyer's premises. The said case was not the one wherein it could be said that the assessee was enforcing a fundamental right. This judgment of the Supreme Court would not help the Revenue in making good the contention that in view of the alternative remedy petition deserves to be rejected. 77. In Sadhana Lodh (supra), a three-Judge Bench, in paragraphs 7 and 8 of the judgment, made the following observations as under : "7. The supervisory jurisdiction conferred on the High Courts under Article 227 of the Constitution is confined only to see whether an inferior Court or Tribunal has proceeded within its parameters and not to correct an error apparent on ....
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....f India v/s. Mangal Textile Mills (supra), a three-Judge Bench made the following observations : "We are of the opinion that on the facts of the present case, exercise of writ jurisdiction by the High Court was unwarranted. As rightly pointed out by learned counsel appearing on behalf of the Revenue, the controversy in the instant case centered around valuation of plant and machinery as also inclusion or non-inclusion of certain machines, in use or not or in working condition or not, which are primarily questions of fact." 81. In the aforesaid decision of the Supreme Court as it is apparent from paragraph 10 itself that the Bench took the view on the facts of the case so far as entertaining a writ petition was concerned. In the aforesaid decision, the controversy centered around valuation of plant and machinery as also inclusion or non-inclusion of certain machines, in use or not or in working condition or not, which are primarily questions of fact as observed by the Supreme Court. 82. In Alembic Glass Industries Limited (supra), the Supreme Court, while dismissing SLP preferred by the assessee against the judgment of this High Court in a writ petition, m....
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....ppeal, resort must be had to that statutory remedy. In the main Writ Petition, the Respondent has averred that the authorities concerned have already taken a view rejecting the rebate claim on the duty paid on the yarn, and therefore, no useful purpose would be served by preferring appeal before the same authorities. The contention of the Respondent is untenable. When an efficacious statutory remedy by way of appeal is available, the Respondent ought to have exhausted the remedy." 87. In the said case before the Division Bench of the Madras High Court, the issue was with regard to rebate claimed on the duty paid on the yarn. Under such circumstances and considering the nature of issue involved, the Bench took the view that the issue ought to have exhausted the alternative remedy. 88. Bearing in mind the aforesaid principles of law as explained by the Supreme Court and other High Courts on the question of entertaining a writ petition under Article 226 of the Constitution of India in a case where an alternative remedy by way of an appeal is available, we hold that the present case is one where there are good grounds to overrule the preliminary objection of the Reven....
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....t with acknowledgment due, to the person for whom it is intended or his authorized agent, if any; (b) if the decision, order, summons or notice cannot be served in the manner provided in clause (a), by affixing a copy thereof to some conspicuous part of the factory or warehouse or other place of business or usual place of residence of the person for whom such decision, order, summons or notice, as the case may be, is intended; (c) if the decision, order, summons or notice cannot be served in the manner provided in clauses (a) and (b), by affixing a copy thereof on the notice board of the officer or authority who or which passed such decision or order or issued such summons or notice." 43. Sub-section (a) of Section 37C (supra) states that any decision, order, summons or notice may either be sent by registered post with acknowledgement due to the person for whom it is intended or his authorized agent. If this mode of service is unsuccessful then service can be effected by affixation. It is not the case of the department that it simultaneously also dispatched the order to the writ-applicants by registered post with acknowledgment due. 44. In the aforesaid c....
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....er must be tendered on the concerned person or his authorized agent, in other words, on no other person, to ensure efficaciousness. They must immediately recall the decision in Taylor v. Taylor - (1875) 1 Ch. D 426, rendered venerable by virtue of its jural acceptance and applicable for over a century. It was approved by the Privy Council in Nazir Ahmad v. King Emperor - (1935-36) 63 IA 372 and was subsequently applied in Rao Shiv Bahadur Singh v. State of Vindhya Pradesh - AIR 1954 SC 322, State of U.P v. Singhara Singh - AIR 1964 SC 358, Babu Verghese v. Bar Council of Kerala - (1999) 3 SCC 422 and more recently in Hussein Ghadially v. State of Gujarat - (2014) 8 SCC 425. As observed by this Court in Babu Verghese, "it is the basic principle of law long settled that if the manner of doing a particular act is prescribed under any statute, the act must be done in that manner or not at all." The Inspector who ostensibly served the copy of the order should have known the requirements of the statute and therefore, should have insisted on an acknowledgement either by the appellant or by its authorized agent. The Inspector had a statutory function to fulfill, not a mere perfunctory one.....
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.... the CBEC Circular/Order No.8/92 dated 24.9.1992 and also the Ahmedabad Collectorate Trade Notice No.78/94 dated 9.5.1994, as relying on the same, the goods manufactured by the writ-applicants are being classified as the articles of plastics under the Heading 3926 of the Central Excise Tariffs. The challenge to the CBEC Circular/Order and also the Trade Notice referred to above is substantially on the ground that the excise duty is being demanded from the writ-applicant based on such order and trade notice, whereas identical goods are being accepted as textile products in case of several other manufacturers and no duty is being charged. We do not intend to go into the issue as regards the legality and validity of the CBEC Circular/Order dated 24.9.1992 and the Ahmedabad Collectorate Trade Notice No.78/94 dated 9.5.1994 because we have something else in our mind. We intend to remit the entire matter to the respondent no.2 for fresh consideration in accordance with law, more particularly, the prima facie findings which we may record in the present order. 49. Prima facie, it appears from the materials on record that both the products involved in this case are "fabric" and both are ....
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.... silk textile, woollen textile, rayon textile, nylon textile or any other kind of textile. The method of weaving adopted may be the warp and woof pattern as is generally the case in most of the textiles, or it may be any other process or technique. There is such phenomenal advance in science and technology, so wondrous is the variety of fabrics manufactured from materials hitherto unknown or unthought of and so many are the new techniques invented for making fabric out of yarn that it would be most unwise to confine the weaving process to the warp and woof pattern. Whatever be the mode of weaving employed, woven fabric would be 'textiles'. What is necessary is no more than weaving of yarn and weaving would mean binding or putting together by some process so as to form a fabric. Moreover a textile need not be of any particular size or strength or weight. It may be in small pieces or in big rolls; it may be weak or strong, light or heavy, bleached or dyed, according to the requirement of the purchaser. The use to which it may be put is also immaterial and does not bear on its character as a textile. It may be used for making wearing apparel, or it may be us....
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....escription or made out of any other material; but when any such material is woven into fabric, what comes into existence is a "textile". 59. A specific and categorical submission was raised by the writ-applicants before the authorities that similarly situated manufacturers located elsewhere in the State as well as in the country have classified similar products as textiles, and the Central Excise officers have not initiated any proceedings against them on the basis that the goods are articles of plastics chargeable to excise duty. In the representations made before the Chief Commissioner, the Ministry of Finance and the Principal Chief Commissioner as well as the jurisdictional Commissioner, the writ-applicant has submitted as under :- "It may be noted sir that more than 100 manufacturers in the country are treating this product as a Textile material and following HSN code under chapter 60. We understand that we are the only company who have the Show cause Notice pending." 60. A list of several manufacturers was also submitted before such authorities. 61. In the order passed by the jurisdictional Commissioner during the pendency of this writ-application also, this....
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....)(g) of the Constitution of India. We may, at this stage, profitably quote judgment delivered by this High Court in the case of Ralli Engine Ltd. (supra), reported in 2004 (62) RLT 607 (Guj.) "The petition contains challenge to the discriminatory treatment being given by the Commissionerates in three different States, i.e., Gujarat, Maharashtra and Tamil Nadu in respect of the same product. The petitioner-Company is a manufacturer of agricultural knapsack sprayer engine which is used as a part/component in mechanical appliances for spraying pesticides in fields and farms. The product is being classified under Heading No.84.24 in Maharashtra (manufacturer-High Power Engineering Company Private Limited, Satara) and in Tamil Nadu (manufacturer-Greaves Limited, Chennai) whereas in Gujarat it is classified under Heading No.84.07 in the petitioners' case by the Assistant Commissioner of Central Excise at Valsad under the Commissionerate of Central Excise, Valsad." 106. We may also quote and rely upon the final judgment between the same parties rendered by a Division Bench of this Court, reported in 2006 (72) RLT 721 (Guj.) "In the aforesaid set of facts and circumstances whi....