HINDUSTAN COCO-COLA BEVERAGE(P) LTD. Vs UNION OF INDIA .
Bench: DIPAK MISRA,ABHAY MANOHAR SAPRE
Case number: C.A. No.-003380-003380 / 2010
Diary number: 22591 / 2009
Advocates: PRAVEEN KUMAR Vs
B. KRISHNA PRASAD
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3380 OF 2010
Hindustan Coca Cola Beverage (P) Ltd. ... Appellant
Versus
Union of India and others ... Respondents
WITH
CIVIL APPEAL NO. 3381 OF 2010, CIVIL APPEAL NO. 3383 OF 2010, CIVIL APPEAL NO. 3384 OF 2010, CIVIL APPEAL NO. 3385 OF 2010, CIVIL APPEAL No. 3386 OF 2010, CIVIL APPEAL NO. 3387 OF 2010, CIVIL APPEAL NO. 3388 OF 2010 and CIVIL APPEAL NO. 3389-3392 OF 2010
J U D G M E N T
Dipak Misra, J.
The present appeals, by special leave, have been
preferred against the judgment and order dated 24th June,
2009 passed by the Division Bench of the High Court of
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Gauhati in Writ Appeal No. 435 of 2006 and other connected
appeals whereby it has affirmed the common judgment and
order dated 21.09.2006 passed by the learned Single Judge in
a batch of writ petitions. For the sake of clarity and
convenience we shall advert to the facts in Civil Appeal No.
3380 of 2010 and at the relevant time we shall refer to
quantum involved in other appeals.
2. The facts, in a nutshell, are that with a view to provide
necessary impetus to the development of industries in the
north-eastern region a new Industrial Policy Resolution was
notified by the Government of India on 24.12.1997. In
pursuance of the said policy, a Notification was issued on
8.7.1999 and thereafter further Notifications were issued on
29.06.2001 and 23.12.2002. Pursuant to the said
Notifications, certain benefits were availed of by the
assessees. At that juncture, The Finance Act, 2003 (for
brevity “the Act”) was brought into force and by virtue of
Section 153 of the Act certain Notifications were amended
with retrospective effect from 08.07.1999, i.e. the date of
original Notification which we have mentioned hereinabove.
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3. After the amendment came into force, the Assistant
Commissioner, Central Excise, Jorhat referred to the
amendment and the notifications and eventually passed the
following order on 3.6.2003:-
“In consideration of the above the entire refund amount sanctioned with effect from 8.7.99 is required to be reviewed in terms of the provision of the Eighth Schedule of the Finance Act, 2003 which on being re- assessed, it appears that an amount of Rs.2.20,18.124.00 is required to be recovered from the said unit being the refund granted earlier which have become not eligible by virtue of the Clause 145 of the Finance Bill, 2003. Details of duty paid month wise, refund sanctioned and amount required to be realized are furnished in Annexure-1 to the Order enclosed.
Now in terms of the provision of Finance Act, 2003 M/s. Hindustan Coca Cola Beverages Pvt. Ltd., P.O. R.R.L., Jorhat is hereby required to make payment of the said amount of Rs.2,20,18,124.00 within a period of 30 (thirty) days with effect from 13th May, 2003. Failure to comply with this Order with the specified date an interest @ 15% p.a. shall be payable from the date immediately after the expiry of the said period of thirty days till the payment is made.”
4. Being aggrieved by the aforesaid order, the appellant
preferred a writ petition before the High Court. The validity of
Notification No. 65/03 dated 06.08.2003 and certain other
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notifications including the original notification No. 33/99 dated
3.7.99 were called in question. Before the High Court, the
constitutional validity of the amendment of the Finance Act
was also called in question. In the course of hearing, the
challenge to the validity was abandoned. It was contended in
the writ petition that without affording an opportunity of
hearing to the appellant and without issuance of the notice,
the Assistant Commissioner had passed an order of recovery
which was absolutely impermissible.
5. The High Court did not address to the retrospective
application of the provision as the assail to the same was
abandoned. It also did not address to the impact of non-
issuance of notice prior to passing an order of recovery. It
adverted to the merits of the case, that is, whether the
recovery could have been directed by the Assistant
Commissioner or not and repelling the proponements
advanced by the assessee accepted the stand of the revenue.
6. Mr. S.K. Bagaria, learned senior counsel appearing for
the appellant very fairly stated that the assessee had
correctly abandoned the challenge pertaining to the
constitutional validity of the provision. Learned senior
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counsel submitted that an order of recovery could not have
been straightaway passed without issuing notice to the
appellant as that violates the principles of natural justice.
The learned senior counsel further contended that the High
Court has dwelled upon the merits of the case on an
erroneous footing inasmuch as the assessee-appellant had
totally utilized the CENVAT Credit and not taken the refund of
the same. It is further urged that in view of the amendment
made by the Finance Act, it was not payable and
consequently not recoverable.
7. Mr. Mukul Rohtagi, learned Attorney General appearing
for the Union of India submitted that as the time schedule is
fixed under Section 153 (4) for recovery is thirty days, by
implication, the principle of issue of any show cause notice is
not attracted. To support the said submission, he has drawn
strength from the decision in R.C. Tobacco (P) Ltd. v.
Union of India1, especially paragraph 41 of the said
pronouncement. Additionally, it is submitted by him that post
facto hearing may be thought of after the amount is
deposited and the sphere of hearing may be limited with
regard to payability or the refund of the sum. 1 (2005) 7 SCC 725
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8. To appreciate the controversy from a proper perspective
it is seemly to reproduce Section 153 of the Act which reads
as under:
“Section 153. Amendment of notifications issued under Section 5A of the Central Excise Act for certain period.
(1) The notification of the Government of India in the erstwhile Ministry of Finance (Department of Revenue), Nos. G.S.R. 508 (E), dated the 8th July, 1999 and G.S.R. 509 (E), dated the 8th July, 1999, issued under sub- section (1) of Section 5A of the Central Excise Act read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods) of Special Importance) Act, 1957 (58 of 1957) and sub-section (3) of Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978) by the Central Government shall stand amended and shall be deemed to have been amended in the manner as specified in the Eighth Schedule, on and from the 8th day of July, 1999 to the 22nd day of December, 2002 (both days inclusive) retrospectively, and accordingly notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, any action taken or anything done or purported to have been taken or done under the said notifications, shall be deemed to be and always to have been, for all purposes, as validly and effectively taken or done as if the notifications as amended by this sub-section had been in force at all material times.
(2) For the purposes of sub-section(1), the Central Government shall have and shall be deemed to have the power to amend the
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notifications referred to in the said sub-section with retrospective effect as if the Central Government had the power to amend the said notifications under sub-section (1) of Section 5A of the Central Excise Act read with sub- section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-section (3) of Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), retrospectively at all material times.
(3) Notwithstanding the cessation of the amendment under sub-section (1) of the 22nd day of December, 2002, no suit or other proceedings shall be maintained or continued in any court, tribunal or other authority for any action taken or anything done or omitted to be done, in respect of any goods under the said notifications, and no enforcement shall be made by any court, tribunal or other authority of any decree or order relating to such action taken or anything done or omitted to be done as if the amendment made by sub-section (1) had been in force at all material times.
(4) Notwithstanding the cessation of the amendment under sub-section (1) on the 22nd day of December, 2002, recovery shall be made of all amounts of duty or interest or other charges which have not been collected or, as the case may be, which have been refunded but which would have been collected, or, as the case may be, which would not have been refunded if the provisions of this section had been in force at all material times, within a period of thirty days from the day on which the Finance Bill, 2003 receives the assent of the President, and in the event of non-payment of duty or interest or other charges so recoverable, interest at the rate of fifteen per cent, per annum shall be payable,
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from the date immediately after the expiry of the said period of thirty days, till the date of payment.
Explanation- For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if the notifications referred to in sub-section (1) had not been amended retrospectively by that sub-section.”
As the provision contained under Section 153(1) would
reveal the effect of the amendment has to be understood in
the backdrop of the EIGHTH SCHEDULE. THE EIGHTH
SCHEDULE reads as follows:
“[See Section 153(1)]
Sl.No. Notification No. and date
Amendment Date of effect of amendment
(1) (2) (3) (4) 1. G.S.R. 508(E) dated
the 8th July, 1999 -– Central Excise, dated the 8th July, 1999)
In the said notification, in paragraph 2, in clause (b), the following proviso shall be inserted, namely:-
Provided that such refund shall not exceed the amount of duty paid less the amount of the CENVAT credit availed of, in
8th July, 1999
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respect of the duty paid in the inputs used in or in relation to the manufacture of goods cleared under this notification.”
2. G.S.R. 509 (E), dated the 8th July, 1999 {33/1999- Central Excise, dated the 8th July, 1999}
In the said notification, in paragraph 2, in clause (b), the following proviso shall be inserted, namely:-
“Provided that such refund shall not exceed the amount of duty paid less the amount of the CENVAT credit availed of, in respect of the duty paid on the inputes used in or in relation to the manufacture of goods cleared under this notification.”
8th July, 1999
9. The first submission, as we find centres round the issue
whether whether the appellant-assessee was entitled to be
given notice to show cause before proceeding for recovery in
view of the language employed under Section 153(4) of the
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Act. In R.C. Tobacco (P) Ltd. (supra) the court interpreting
Section 153(4) has observed as follows:-
“In the present case Section 153(4) specifically and expressly allows amounts to be recovered within a period of thirty days from the day Finance Bill, 2003 received the assent of the President. It cannot but be held therefore that the period of six months provided under Section 11-A would not apply.”
In the said case while dealing with the question of notice prior
the recovery the court ruled:-
“On the question of notice prior to the recovery irrespective of Section 11-A, it is contended by the petitioners relying on the decision of this Court in East India Commercial Co. Ltd. v. Collector of Customs4 SCR at p. 361 that whether a statute provides for notice or not, it was incumbent upon the respondents to issue notice to the petitioners disclosing the circumstance under which proceedings are sought to be initiated against them and that any proceedings taken without such notice would be against the principles of natural justice. Assuming that the principles were applicable to the case before us, in fact notices of personal hearing were served on the petitioners by the Assistant Collector for a personal hearing before the Assistant Collector passed the orders by which the petitioners were held liable to repay the refunds made and to pay the excise on the goods cleared for the subsequent periods.”
Relying on the same it is submitted by Mr. Rohatagi that as
the computation and the recovery are to be made within a
time frame of thirty days, issue of a show cause notice cannot
be read into such a provision. In essence, the submission is
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that the principles of natural justice have been kept at bay by
implication. Per contra, Mr. Bagaria has submitted that in the
above-referred decision notices have already been given and,
therefore, issuance of notice is a must. Ordinarily we would
have adverted to said submission advanced at the bar but we
find, the assessee had not demonstrably argued this ground
and addressed the lis on merits before the High Court and,
therefore, we are not inclined to interpret whether the concept
of natural justice would be read into the said provision or not.
The said question is left open.
10. The next submission pertains to the issue whether the
High Court was justified addressing the lis on merits when
series of factual aspects are involved. We are disposed to
think that the High Court should not have entered into the
factual score to decline the relief to the appellants. We are
obliged to say so as Mr. Bagaria, learned senior counsel has
contended that it can only be adjudicated upon with reference
to the documents on record. The documents mean the
transactions, quantum of CENVAT availed of, the amount that
was taken as refund by paying from the P.L.A. and further not
availing refund of CENVAT credit at any point of time.
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Needless to emphasise, the said aspect are in the realm of
facts which could not have been adjudged or adjudicated by
the High Court under Article 226 of the Constitution as the
order of recovery was challenged on the ground that no notice
was issued to the appellant and that it was not liable to pay in
the obtaining factual matrix.
11. Be it stated, there is no cavil over the fact that an appeal
lies under Section 35 of the Central Excise Act, 1944 to the
Commissioner (Appeals) who can address both the issues
relating to facts and law keeping in view the applicability of
the relevant notifications. It is borne out from the record that
the assessee-appellant had furnished a bank guarantee
amounting to Rs.2,20,18,124/- for obtaining an order of stay.
In our considered opinion it would not be appropriate to give
an opportunity to the appellant to prefer statutory appeals
and allow it to enjoy the benefit of stay of recovery on the
basis of a bank guarantee. Therefore, we would direct the
assessee to deposit Rs.2.5 crores before the adjudicating
authority within six weeks and after the said deposit is made
and the receipt obtained, the appeal would be entertained
within the said period. On an appeal being filed, the
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Commissioner (Appeals) shall deal with the matter on merits.
Learned Attorney General very fairly stated that the Revenue
would not raise the issue of limitation as the period spent
before the High Court and this Court and the time granted for
depositing of the amount would stand excluded for the
purpose of preferring the appeal.
12. At this juncture, it is apposite to mention here that the
bank guarantees furnished by the other appellants in respect
of their respective appeals. They are as under:
CIVIL APPEAL NO. NAME OF ASSESSEE
AMOUNT(Rs.)
C.A. No. 3381/10 Assam Roofing 16,62,336/-
C.A. No. 3383/10 Ozone Pharmaceuticals 1,01,20,672/-
C.A. No. 3384/10 Ozone Ayurvedics 1,01,20,672/-
C.A. No. 3385/10 Herbo Foundation 39,81,566/-
C.A. No. 3386/10 Belle Herbals 4,44,740/-
C.A. No. 3387/10 Eminent Healthcare 22,01,868/-
C.A. No. 3388/10 Tread & Patels 42,44,456/-
C.A.Nos.3389/92/10 Godres Sara Lee 36,51,495/- 19,12,132/-
Considering the amount in question in various appeals it
is directed that in case the bank guarantees furnished by the
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assessees have been encashed no deposit shall be made. If
the bank guarantees have not yet been encashed the amount
as mentioned hereinabove plus rupees five lakhs shall be
deposited within the stipulated time frame of six weeks. As
we have directed for deposition of the amount, it is directed
that after deposit of the said amount, the bank guarantees
furnished in favour of the jurisdictional Commissioner shall be
returned to the assessee-appellants.
13. In the result, the appeals stand allowed in part. The
judgment and orders of the High Court in writ petitions and
writ appeals are set aside and the assessee/appellants are
directed to prefer appeals with the conditions precedent as
imposed hereinabove. The appeals shall be disposed of
within a period of three months from the date of its
presentation after giving opportunity of hearing to the parties.
Needless to clarify, we have not expressed any opinion
whatsoever on the merits of the case. There will be no order
as to costs.
.............................J. [Dipak Misra]
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.............................J. [Abhay Manohar Sapre]
New Delhi; September 04, 2014
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