TaxTMI 
TaxTMI 
1999 (1) TMI 44
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....y, another letter of intent dated 22-10-1982 was issued and direction was given to surrender the first letter of intent. The second letter of intent was amended transferring the same in the name of ICCL, petitioner No. 1. Commercial production was started by IMFA in its EOU some time thereafter. The second letter of intent was again amended for transfer of location of the project to Choudwar. Again, it was amended on 26-11-1984 permitting import of Captive Power Plant as capital goods for 100% EOU for manufacture of Charge Chrome. There was dispute as to whether the benefit of Customs Notification No. 13/81-Cus., dated 9-2-1981 for import of Captive Power Plant machineries and equipments is applicable to petitioner No. 1's case. It is relevant to note that the Industrial Development Bank of India (`IDBI' in short) while dealing with the application for financial assistance made by the ICCL vide its communication dated 27-10-1984 imposed a condition that approval of the Central Board of Excise and Customs for exemption from payment of customs duty on equipments and building and other materials proposed to be imported for building the power plant, was necessary. The Government of Ind....
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....nt of Customs Duty, the Petitioners contend that Notification No. 13/81 dated 8th February, 1981 as applicable and is adequate for compliance of condition 15(f) of the IDBI's letter of intent dated 27th October, 1984. We declare and direct that the said Notification applies to the present case. In respect of conditions 15(b), 15(i) and 15(m) all concerned parties viz., IDBI, IOB, IB and the Petitioners will discuss and amicably resolve the issues involved prior to the first down payment by IDBI and in any event prior to 12th June, 1985. In the meantime, the Petitioners will on or before 12th June 1985 also execute the necessary loan agreements, documentation and other usual undertakings required by the IDBI and/or other financial institutions in accordance with their normal practice. It is also hereby expressly declared that this order has been passed having special regard to the facts of this case and will not constitute or form a precedent for any other case or matter. This order shall be binding upon all parties concerned and also all shareholders, creditors, depositors, liquidators and all other persons concerned with the company, including authorities and bodies including the ....
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....to 4 undertake to Court that these will be duly done. In the event of any problem arising by reason of any of the requisite consents not being obtained from the concerned authorities, it will be open to the parties to move this Court after the re-opening of the Court and not earlier for appropriate directions. This however, shall not hold up the disbursement of the 15% down payment and the execution of the letter of guarantee by the I.D.B.I. Counsel appearing for the I.D.B.I. states before the Court that his client will make available to the petitioner, tomorrow morning at the office of Miss Bina Gupta, Advocate on record, the agreement papers to be signed by the petitioner Nos. 1 and 2 and Counsel appearing for petitioners Nos. 1 and 2 states that petitioners Nos. 1 and 2 will execute the agreement tomorrow itself." An application was filed for modification of the orders dated 5-6-1985 and 17-6-1985. In the application for modification filed by respondents in the writ petitions before the Apex Court, it was indicated that even though the power plant may be installed within the bonded premises, the distribution system will lie outside the bonded premises as the supply of e....
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....entral Excise and Customs, Choudwar, informed the ICCL that its power plant was going to start generating electricity and the electricity generated as also any intermediatory or finished product obtained in the course of generation should not be removed outside the bonded area without prior permission of the competent authority. ICCL wrote to the Director (Customs) of the Central Board of Excise and Customs in the Ministry of Finance of the Government of India about the directions given by the Superintendent of Central Excise and Customs, Choudwar. In response to notice dated 8-12-1988 the ICCL requested Assistant Collector of Central Excise and Customs, Cuttack, by letter dated 28-1-1989 to take note of the actual position. The Assistant Collector by his letter dated 30-1-1989 intimated ICCL that it was allowed to clear electricity generated in its captive power plant at Choudwar to be transferred to the 100% EOU at Therubali through OSEB grid subject to furnishing of the undertaking as was contained in the letter dated 28-1-1989 of the ICCL further subject to the condition that the ICCL shall furnish monthly statement of quantity of electricity transmitted from Choudwar unit and ....
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....oners were permitted to file reply to the show cause notice before the adjudicating authority, which was done. The reply was considered in detail and an elaborate reasoned order of adjudication has been passed, which is not subject matter of challenge in the writ petition. Further, the writ petition is not maintainable as effective, efficacious and statutory alternative remedy is available. Learned Counsel for the petitioners, however, submitted that the validity of the notice itself is under challenge and as attempt is being made to get over effect of the orders passed by the Apex Court, the existence of alternative remedy should not be considered to be a bar to entertain the writ petition. So far as the plea of existence of alternative remedy is concerned, it is further submitted that this Court is a Court of equity and should apply the principles of justice, equity and good conscience. The petitioners relied and acted upon the statutory provisions, the actual terms and conditions contained in Notification No. 13/81-Cus. the orders of the Apex Court dated 5-6-1985, 17-6-1985 and 12-3-1986 dismissing the Revenue's miscellaneous petition. The respondents therein accepted the ord....
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....it and that cannot be a ground to by pass the statutory remedy. 5.By way of reply to the submission made by the learned Counsel for the petitioners that the notice does not show as to which condition or term has been violated, it has been submitted that the Customs Authorities have the jurisdiction to take action under Section 111(o) of the Act when the condition of exemption is violated and the exempted goods are diverted to non-permitted activity. Breach of the terms of exemption also amounts to breach of the conditions of the import licence. 6.The position regarding the course to be adopted by Courts when alternative remedy is available is fairly well settled. If a show cause notice is issued by a statutory authority relying upon some facts, the said notice can be challenged before the writ court only on the ground that even if the facts are assured to be correct, no case has been made out against the notice. If a prima facie case has been made out in the show cause notice, it is for the adjudicating authority to finally decide all the questions including the questions of fact. But the disputed questions of fact cannot be agitated in writ court even before the questions ha....
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....ich indicated that alternative remedy would not operate as an absolute bar and that Writ Petition under Article 226 could still be entertained in exceptional circumstances. Specific and clear rule was laid down in State of U.P. v. Mohd. Nooh, 1958 SCR 595 : AIR 1958 S.C. 86, as under : "But this rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies." This proposition was considered by a Constitution Bench of the Apex Court in A.V. Vankateswaran, Collector of Customs, Bombay v. Ramchand Sobhraj Wadhwani, 1983 (13) E.L.T. 1327 (S.C.) = AIR 1961 S.C. 1506, and was affirmed and followed in the following words : "The passages in the judgments of this Court we have extracted would indicate (1) that the two exceptions which the learned Solicitor General formulated to the normal rule as to the effect of the existence of an adequate alternative remedy were by no means exhaustive and (2) that even beyond them a discretion vested i....
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....p; xxx xxx xxx xxx In view of the above, we shall be highly obliged if you kindly accord your approval to transfer the surplus power, after meeting the power requirements of the company as well as 100% EOU of our promoter Company, IMFA, for utilization by other industrial units in the domestic tariff area including domestic units of promoter company (IMFA), in the State of Orissa which is today starved of power (presently the units are facing 75% power-cut in the State). An early permission would enable us to approach OSEB and other authorities accordingly." Subsequently, in the letter dated 31-10-1988 addressed to the Collector, Central Excise and Customs, it was stated as follows :- xxx xxx xxx xxx xxx The aforesaid transmission loss @ 20% of the energy fed into the OSEB grid requires your kind approval as under the Provisions of the Customs Act under which our 100% EOU will be operating, this may amount to transit loss.....
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....n of surplus power would normally result from two sources (a) through installation of captive power plant, which has been set up by EOU/EPZ unit for their own use or as stand by arrangement, and (b) through DG sets, though this would be in exceptional circumstances because DG sets are imported by EOU/EPZ units normally on the basis of their own actual requirements. Chairman emphasized the need to have a simple and implement able arrangement for the sale of such surplus power as legitimately entitled, keeping in mind the fact that energy is a scarce resource, and its sharing for the purpose of industrial production would naturally be in the national interest. The concurrence of the Deptt. of Revenue to the sale of surplus power generated by one EOU to another EOU and by one unit in EPZ to any other unit/units in EPZ was a welcome step in this direction. In such cases, the transfer of power by sale was envisaged only where the wheeling/transmission of power is not contemplated as this would involve State Electricity Boards. Director, Ministry of Power, however, observed that it may be necessary to first confirm whether such inter-unit sale of power under the EOU/EPZ Scheme is permiss....
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....icitor General, the adjudication order is not under challenge in the present writ petition. It is also not in dispute that the same can be challenged in an appeal as provided in the statute. Learned Counsel for the petitioner Mr. Chidambaram submitted that though the petitioner - ICCL appeared before the Adjudicating Authority pursuant to the direction given by this Court the scope of challenge to the legality of the show cause notice was not given up, and the matter was kept alive. There can be no dispute so far as that aspect is concerned. But at the same time it cannot be said that no factual dispute is involved in the present case. Effect of the orders of the Apex Court in the background of the factual position highlighted by the opposite parties has to be considered. We do not accept the contention that there is no factual aspect involved and there is no scope for any further adjudication. The stand of the petitioners vis-a-vis orders of the Apex Court and its applicability to the factual position as highlighted by the petitioners and the Revenue in their respective stands has to be adjudicated. The prima facie view of opposite parties is contained in paragraph 19 of the show ....
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.... deposit of duty demanded or penalty levied would cause undue hardship to the appellant. The Appellate Authority is required to take a realistic view of the matter and dispense with the deposit in appropriate cases. If the financial position of the appellant is precarious and it is not possible for it to comply with the requirement regarding deposit of the disputed amount or it may do so by irreparable loss, it cannot be said that the balance of convenience is against the grant of relief. Thus, the concept of balance of convenience would cover most of the criterion relevant to the question. 10. The appellant before the Tribunal has no absolute right of stay. He obtains stay of realization of tax levied or penalty imposed in an appeal subject to limitations of Section 129E. The proviso gives a discretion to the authority to dispense with the obligation to deposit in case of "undue hardship". That discretion must be exercised on relevant materials honestly, bona fide and objectively. As observed in Vijay Prakash D. Mehta and Jawahar D. Mehta v. Collector of Customs (Prevention), Bombay - 1989 (39) E.L.T. 178 (S.C.) = AIR 1968 S.C. 2010, it is a discretion vested in an obligation t....