TaxTMI 
TaxTMI 
2021 (6) TMI 370
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....missionerate (the second respondent) demanding, pursuant to the impugned Order-in-original, excise duty of Rs. 89,03,343/-, a penalty of Rs. 90,08,343/- and applicable interest. The petitioners have alternatively sought for permission to file the first appeal under the provisions of Section 35 of the Central Excise Act, 1944 (for short, 'the Excise Act') before the Commissioner of Central Tax (Appeals) S1 and S2, Vinaya Marga, Siddhantha Nagar, Mysore-the appellate authority. 2. According to the petitioners, the first petitioner is in the business of executing civil works contracts for different governments and private undertakings. The first petitioner has registered itself across the country under the applicable Service Tax Acts because the execution of works contracts involves the sale of goods and taxable services, but it is not engaged in manufacture of RMC. 3. The petitioners have narrated the circumstances leading to the present petition thus. 3.1 M/s Tata Housing Development Corporation awarded a contract to the first petitioner to construct residential buildings in Bangalore christened Promont Hilltop Residential Project (hereafter referred to as, "the project site"). T....
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....that it had manufactured only controlled CM for the purposes of in situ utilization. The CM manufactured by the first petitioner for construction at the project site was not exigible. The petitioners did not receive any communication from the respondents pursuant to their response dated 18.07.2017 until the second petitioner received communication to file his response too, and the second petitioner filed his response on 08.06.2019 reiterating the cause shown by the first petitioner. The petitioners also filed written submissions on 10.06.2019. The first respondent, despite cause shown by the petitioners, issued the Order-in-original confirming the proposal in the show cause notice dated 13.04.2017 proposing confiscation of certain goods. 3.6 The petitioners, on receipt of the Order-in-original, handed over the related papers to their tax consultants with instructions to prepare, finalize and file the first appeal before the appellate authority within the prescribed time under section 35 of the Excise Act. The petitioners were under the bona fide belief that the necessary appeal is filed in time in accordance with law. The petitioners were dismayed when they received the impugned l....
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....ing CM of required specifications using raw materials like specified size stone chips, sand, cement admixtures et cetera purchased from third party vendors; the petitioners have not installed any stone crusher or sand mill for production of stone aggregates or any specific quality of sand within the site. It is undisputed that the first petitioner, as a civil contractor in discharge of the contractual obligations, has manufactured CM and used such CM at the site entirely for captive use i.e., for construction of residential buildings at the project site. These two circumstances are significant and contradistinguish the manufacture of CM from the manufacture of RMC. The first respondent has failed to appreciate the aforementioned significant aspects. 6. Sri Huilgol emphasizes that if it is established that the petitioner has only produced CM and not RMC and the CM produced is used in situ, the CM is not exigible. In support of this submission, the learned counsel relies upon (a) entry at Serial No. 51 of the notification dated 01.03.1997 in No.4/1997-CA, (b) the Central Board of Indirect Taxes and Customs (CBIC) Circular dated 06.01.1998 and (c) the entry at Serial No. 144 of the s....
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....h is the basis for the impugned Order-in-original/Letter of Demand. This conclusion is contrary to the settled law and wholly erroneous on facts. As the petitioners have only manufactured CM, which is exempt from excise duty, the Order-in-original would be without jurisdiction. 8. Sri. Jeevan J Neeralgi, the learned counsel for the respondents, submits that the Order-in-original is dated 14.06.2019 and the present writ petition is filed in the month of September 2020 i.e., after more than one year from the date of communication of the Order- in-original. The Petitioners, if aggrieved, should have, within 60 days from the date of the communication, impugned the Order-in-original in an appeal before the Commissioner of Central Tax (Appeals) S1 and S2, Vinaya Marg, Siddharthanagar, Mysore under Section 35 of the Excise Act, and if justifiable even beyond the said 60 days but within the next 30 days. In the event, the petitioners had filed such appeal they could have invoked further remedies as envisaged under the subsequent provisions of the Excise Act. The petitioners, who have not availed the statutory remedy, futilely contend that the Order-in-original (and the subsequent letter o....
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....ter tank. Further, the first respondent, after due opportunity, has recorded the voluntary statement of one of the petitioners' representative, Sri P Vinod. This representative has admitted that the petitioners have installed a batching plant of 45 cubic meters per hour capacity at the project site with an automatic batching plant for more than three (3) years. He has also admitted that the petitioners purchased various aggregates as required from the third-party vendors and as such they did not have a stone crusher or sand mill or vibrator screen; that there are separate silos to stock cement and fly ash from which cement and fly ash are fed to the concrete mixer using a screw conveyor operated with automatic weighing gauges; that chemically treated water stored in a tank is fed to the batching plant as per requirement; that various admixtures like retarders, plasticizers et cetera stored in separate drums are sent to the concrete mixer by suitable pumps; that the concrete mix produced are tested for various grades and strengths; that during the breakdown or maintenance/repair of the plant, the petitioners have purchased RMC from third-party vendors and there is no difference ....
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....int and not entertain the writ petition. Further in paragraph 15, the Hon'ble Supreme Court observed that the High Court may accede to such a challenge and can also non-suit the petitioner on the ground that alternative efficacious remedy is available and that be invoked by the writ petitioner. In addition, in paragraph 19, the Hon'ble Supreme Court took note of the fact that when the High Court refuses to exercise the jurisdiction under article 226 of the Constitution of India, it would be necessary for the court to record that there was no case of violation of the principles of natural justice or non-compliance of statutory requirements in any manner". "8. Further, it would be highly beneficial to refer to the celebrated decision of the Constitution Bench of the Hon'ble Supreme Court in the case of Mafatlal Industries Ltd v. Union of India (reported in 1997 (5) SCC 536) wherein it was held that the jurisdiction of the High Courts under Article 226 and that of the Hon'ble Supreme Court under article 32 of the Constitution of India could not be circumscribed by the provisions of the enactment (Central Excise Act) and they would certainly have due regard to the legislative intent ....
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....na v. State of Maharashtra [(2014) 16 SCC 623] and National Insurance Co Ltd v. Pranay Sethi [(2017) 16 SCC 680 has held that if there are conflicting views by two coordinate benches, the former view must prevail. As such, the writ petition cannot be rejected solely on the ground that it is not maintainable because the petitioners have not filed statutory appeal. 15. The points for consideration would be: a. Whether the writ petition is liable to be rejected as not maintainable because the petitioners have not filed this petition impugning the Order-in-original within the statutory period prescribed under Section 35 of the Excise Act even if they could demonstrate that the Order-in-original is without jurisdiction2; and b. Whether the first respondent could have classified the concrete mix manufactured by the petitioners at the project site as RMC though the petitioners had not installed Stone crushers with vibrators or sand mill as part of their Batching Plant and the petitioners had manufactured concrete mix as civil contractors for captive use at the site and not for sale. c. If so, whether the Order-in-original is indeed without jurisdiction and this Court must interfer....
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....of error under the relevant Rules but without impugning either the dismissal of the appeal on the ground that it was beyond the prescribed statutory period or the rejection of the application for correction of error. This writ petition being allowed relegating the assessee before the concerned authority for reconsideration of the matter after a fresh opportunity of personal hearing, the matter is taken up in challenge before the Hon'ble Supreme Court. 18. While examining the aforesaid question in the light of the above facts and circumstances and the decision in Oil and Natural Gas Corporation Limited v. Gujarat Energy Transmission Corporation Ltd and others (2017) 5 SCC 42, Mafatlal industries Ltd and others versus Union of India and others (1997) 5 SCC 536 and also referred to by the Division Bench of the Judicature of Madras relied upon by Sri. Huilgol as also other decisions, the Hon'ble Supreme Court has delineated the settled propositions such as; a. that even though the High Court can entertain a writ petition against any order or direction passed/taken by the State under article 226 of the Constitution of India, it ought not to do so as a matter of course when the aggrie....
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....d in paragraph 15 as follows, and it has also later examined whether in the facts of the case on hand it could be reasonably opined that the assessee did not have an opportunity and the explanation offered is considered. Paragraph 15 reads as follows: "We may now revert to the Full Bench decision of the Andhra Pradesh High Court in Electronics Corporation of India Ltd., (supra), which had adopted the view taken by the Full Bench of the Gujarat High Court in Panoli Intermediate (India) Pvt. Ltd. vs. Union of India & Ors.19 and also of the Karnataka High Court in Phoenix Plasts Company vs. Commissioner of Central Excise (Appeal), Bangalore. The logic applied in these decisions proceeds on fallacious premise. For, these decisions are premised on the logic that provision such as Section 31 of the 1995 Act, cannot curtail the jurisdiction of the High Court under Articles 226 and 227 of the Constitution. This approach is faulty. It is not a matter of taking away the jurisdiction of the High Court. In a given case, the assessee may approach the High Court before the statutory period of appeal expires to challenge the assessment order by way of writ petition on the ground that the same i....
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....petitioners within the prescribed period. 22. This Court, on examining the explanation offered by the petitioners for not filing statutory appeal and because of the absence of the necessary details, has opined in paragraph 16 above that the petitioners are superfluous in their explanation of the delay in availing/failure to avail the appeal remedy. The delay in impugning the Order-in-original, which is not sufficiently explained, must be construed as unreasonable4 and therefore, the writ petition must fail at this threshold bar. This consideration would be distinct and separate from examining the explanation offered for the purposes of condoning the delay which would be in the teeth of the decision of the Hon'ble Supreme Court in Oil and Natural Gas Corporation Limited v. Gujarat Energy Transmission Corporation Ltd and others supra 23. Even otherwise, the petitioners' case that the order-in-original is without jurisdiction will have to fail in light of the decision in Larsen and Toubro Ltd. and another v. Commissioner of Central Excise, Hyderabad supra. The Hon'ble Supreme Court has held that "it is the process of mixing the concrete that differentiates between CM and RMC" and ha....
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....se of breakdown or maintenance. The petitioners, only because they had not installed either stone crushers with vibrators or sand mill or because they purchased stone aggregates, sand and other raw material from third-party vendors, cannot be permitted to contend that the machinery installed by them and the manufacturing process adopted by them are different and distinct from the machinery installed and process followed for manufacturing RMC. If the petitioners have manufactured RMC, it would be of no significance, given the text of the exemption under the relevant notification and the clarification, that it is used for captive use and not for sale. For the foregoing, the writ petition is rejected concluding that the first respondent has rightly classified the concrete mix manufactured by the petitioners at the project site as RMC and the Order-in- original does not suffer from lack of jurisdiction. ----------------- Notes: 1. The rejoinder submissions by Sri Huilgol and the subsequent submissions by Sri Neeralgi are completed by the learned counsel after the petition was listed on the request of Sri Huilgol for further hearing. 2. If the answer to this....