M/s. the Bombay Dyeing and Mfg. Co. Ltd. vs The Commissioner of Central Excise

HELD: 1.1 In the writ petitions, the appellant had asserted that the fabric manufactured by the appellant was not amenable to excise duty as it was not removed from the premises within the meaning of Rules 9 and 49 of the Rules. Indisputably, the purport of the stated Rules has been finally answered by Supreme Court in M/s. J.K. Cotton Spinning and Weaving Mills Ltd. & Anr. vs. Union of India & Ors. after resolving the conflicting opinions of different High Courts including of the High Court of Delhi. The stand taken by the appellant in the writ petition has been negatived by this Court, in the said decision. Thus, the question relating to liability to pay excise duty was not and could not have been disputed by the appellant at least after this decision. [Para 18] [1077-C-D]

1.2 The appellant voluntarily furnished requisite bonds in Form B-13 referable to Rule 9B supported by bank guarantee for equivalent amount of the differential duty. It is not an undertaking filed pursuant to the order of the Court. Concededly, the order disposing of the writ petitions does not absolve the appellant from the said bonds ; nor the endorsements made thereon and on the monthly RT-12 returns, indicating that it was a provisional assessment have been ordered to be effaced. The order dated 10/12.3.1993 passed by the High Court of Delhi, disposing of the writ petitions filed by the appellant in no way extricate the appellant from the process to which the appellant had voluntarily submitted itself at its own volition, namely, under Rule 9B of the Rules. Thus, it was not a case of duty not levied or not paid or short-levied or short-paid. The understanding of the parties was absolutely clear that the appellant was liable to pay excise duty, but for the exposition of the High Court of Delhi in J.K. Cotton Spinning & Weaving Mills Co. Ltd. & Ors.. The appellant is obliged to fulfill its statutory obligations including those arising from the undertaking/bonds in Form B-13 and cannot resile from the process to which it had submitted itself without any demur, namely under Rule 9B of the Rules. [Para 20] [1077-G-H; 1078-A-D]

J.K. Cotton Spinning & Weaving Mills Co. Ltd. & Ors. v. Union of India & Ors. (1981) 8 ELT 887 (Del.) referred to.

1.3 In Rohit Mills Ltd., the Supreme Court dealt with two situations referred to therein. First, where Show Cause Notices under Section 11A of the Act have been served and the claim does not cover any period beyond six months from the date of receipt of the notices. Second, where there is dispute as to whether the notice under Section 11A had been issued or not. In the present case, none of the above is attracted ; and for the same reason the exposition in paragraphs 30 to 33 of M/s. J.K. Cotton Spinning and Weaving Mills Ltd. on which reliance has been placed by the appellant, would be of no avail to the appellant. Section 11A of the Act as applicable at the relevant time, would apply to cases of recovery of duties not levied or not paid or short-levied or short-paid etc. The case at hand, however, would come within the dispensation predicated by Rule 9B of the Rules, which deals with provisional assessment to duty.[Paras 20-22] [1078-D-G; 1082-D]

Rohit Mills Ltd. & Ors. v. Union of India & Ors. (1988) 18 ECR 17 SC ; M/s. J.K. Cotton Spinning and Weaving Mills Ltd. & Anr. v. Union of India & Ors. (1987) (Supp) SCC 350 : [1988] 1 SCR 700 – held inapplicable.

1.4 The stand taken by the parties as recorded in the order dated 10/12.3.1993, is limited to accepting the fact that if notice is required to be given, the same will be given and in that case it will be open to the appellant to file response thereto and further, the authorities would take decision after giving opportunity to the assessee. Nothing more can be read into the order dated 10/12.3.1993 passed by the High Court of Delhi. It is certainly not an order to undo the obligation accepted by the assessee by voluntarily executing the bonds in the prescribed format, namely, Form B-13 referable to Rule 9B of the Rulesto treat the process as provisional assessment until the disposal of the writ petitions. The authorities later on passed the final order after the disposal of the writ petitions. A priori, the authorities have not violated any stipulation or direction contained in the order dated 10/12.3.1993 passed by the High Court of Delhi and for having proceeded in accordance with law for the period between 25.5.1981 to 13/14.5.1985. [Paras 24, 25] [1084-B-D]

1.5 Similarly, the exposition of this Court in Metal Forgings and Hindustan National Glass & Industries Ltd. to urge that specific order was required to be passed before an assessment is treated as a provisional assessment, will be of no avail considering the execution of bonds in Form B-13 by the appellant-assessee at its own volition, which is referable to provisional assessment procedure under Rule 9B of the Rules. Once the appellant submitted itself to that procedure without any demur pending disposal of the writ petitions, it is not open to later on resile therefrom. Permitting the assessee to do so, would inevitably result in giving undue advantage and favour to the assessee, who had invoked the remedy under Article 226 of the Constitution of India and sought interim protection on offering to execute bonds in Form B-13 as is noted in the Prayer clause (a) of the civil miscellaneous petition(s). For the same reason, the circular issued by the Government of India pressed into service will be of no avail to the appellant.The appellant cannot be allowed to approbate and reprobate - for inviting the High Court of Delhi to pass interim order stipulating that the appellant would execute bonds in Form B-13 referable to Rule 9B of the Rules and continue to file monthly RT-12 returns from time to time, on which endorsements have been made indicating that it is a case of provisional assessment. The appellant cannot now be permitted to urge that it had not submitted to the process of provisional assessment as such for lack of a specific order of the concerned authority in that behalf. The order passed by the High Court of Delhi on 10/12.3.1993, will have to be understood in proper perspective and not to give undue advantage to or bestow favour on the appellant and thereby deprive the legitimate State exchequer. [Paras 31, 32] [1087-H; 1088-A-DF]

The Bhopal Sugar Industries Ltd. v. The Income Tax Officer, Bhopal [1961] 1 SCR 474 ; R.B.F. Rig Corporation, Mumbai v. Commissioner of Customs (Imports), Mumbai (2011) 3 SCC 573 : [2011] 2 SCR

691 ; Metal Forgings & Anr. v. Union of India & Ors. (2003) 2 SCC 36 ; Kalabharati Advertising v. Hemant Vimalnath Narichania & Ors. (2010) 9 SCC 437 : [2010] 10 SCR 971 ; Jagmittar Sain Bhagat & Ors. v. Director, Health Services, Haryana & Ors. (2013) 10 SCC 136 : [2013] 8 SCR 77 – held inapplicable. J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. Collector of Central Excise (1998) 3 SCC 540 : [1998]

2 SCR 102 ; The Jam Shri Ranjitsinghji Spg. & Wvg. Mills Co. Ltd. & Anr. v. Union of India & Ors. (2007)

109 Bom LR 2167 ; Commissioner of Central Excise, Calcutta v. Hindustan National Glass & Industries Ltd. (2005) 3 SCC 489 : [2005] 2 SCR 744 ; Coastal Gases and Chemicals Pvt. Ltd. v. Assistant Collector of Central Excise, Visakhapatnam & Ors. (1997) 7 SCC 223 – referred to.