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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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