CX - Excise Officer chose to put public money in precious man hours and other resources in whirlpool of litigation at various forums which was absolutely unnecessary: HC
By TIOL News Service
BANGALORE, JULY 10, 2018: THE Supreme Court in the case of Commissioner of C.Ex., Mumbai-II vs. Allied Photographics India Ltd. - 2004-TIOL-27-SC-CX categorically held that Section 11B of the Act and Rule 9B of the CE Rules operate in different spheres and referring to para 104 of the Constitution Bench decision of the Supreme Court in the case of Mafatlal Industries Ltd., vs. Union of India - 2002-TIOL-54-SC-CX-CB it was held that in cases where duty is paid under Rule 9B and refund arises on adjustment under Rule 9B(5), then such refund will not be governed by Section 11B of the Act. It was also clarified that only if an independent refund claim is made and if any adjustment under Rule 9B(5) re-agitating the same issue is made, then only such claim will attract the provisions of Section 11B of the Act.
In spite of the law having been settled in the matter, it appears that the adjudicating authority observed that it was necessary for the Respondent-assessee i.e., ITI Ltd. to take recourse to Section 11B of the Act and to establish that no unjust enrichment would be caused to it by such refund/adjustment of excess provisional duty and that is why the Respondent-assessee had to take the matter further to the Appellate forum and Commissioner of Central Excise (Appeals-I), Bangalore, who granted the desired relief to the Respondent assessee and the second appeal filed by the appellant-Revenue also failed.
Inasmuch as on 25.10.2016, the CESTAT upheld the order passed by the Commissioner of Central Excise (Appeals-I), Bangalore, following the Larger Bench decision of the Tribunal itself in the case of Hindustan Zinc Ltd. - 2015–TIOL–2427–CESTAT-DEL .
Revenue has filed appeals before the Karnataka High Court.
The High Court apparently was peeved with these appeals filed by the Revenue and observed thus (without mincing any words) –
+ We are rather intrigued, and also little pained by the manner in which the different organs or Departments of Central Government have fought this legal battle, which was although absolutely unnecessary.
+ The very fact that the Central Excise Department made an allegation of 'unjust enrichment' and wanted to enquire into it against the Government of India Undertaking (ITI Ltd.) is not palatable, especially because the customer or purchaser of Tele-equipments from the Respondent/assessee-ITI Ltd., was none else than Central Government Department (DoT) itself or BSNL (yet another Government of India Undertaking).
+ Therefore, who was getting "unjustly enriched" at whose cost is anybody's guess, but still the Excise Officer of the Central Government in the Central Excise Department chose to put public money in precious man hours and other resources in the whirlpool of litigation at various Forums by taking a rather too narrow and pedantic approach in the matter.
+ When the substance is lost at the altar of technicalities, it can so happen, but such cases only re-emphasize the need of training the tax collectors in a better manner, for which a call deserves to be taken by the Central Government only and not by the Constitutional Courts.
+ This tendency of the Government Department to become an initiator of the frivolous litigation is yet another reason for expressing such a concern by us in the present case. The Government authorities or Departments may be unwilling respondents or parties to the litigation before the Constitutional Courts and they take a major share of that, but we cannot appreciate the Central Government Departments or Authorities becoming the willing litigators or appellants in the Constitutional Courts by initiating such thoughtless and unnecessary appeals, writ petitions or revision petitions.
+ The various Litigation Policies framed by the Government to reduce the litigation in Courts do not seem to have touched the ground where these authorities really work or take decisions to initiate such litigation.
+ We are hopeful that the concerned persons in the Government will awaken to this stark reality and take more well reasoned and considered decisions before launching a trail of litigation in the Courts of law.
The High Court added -
+ Adjustment/refund or short payment of provisional duty was required to be determined by the Assessing Authority under Rule 9B(5) of the Rules as it then existed during the contemporary period of taxable event of manufacture and removal of goods took place.
+ The Rule governing the obligations or liability of the Respondent-assessee relevant on the date of removal of goods and payment of provisional duty will apply, rather than the Rule as amended subsequently after which, the belated order came to be passed by the Assessing Authority in the year 2006.
+ Therefore, we find the said order of the adjudicating Authority was contrary to the ratio of the decision of the Hon'ble Supreme Court which was though referred but not applied by the said Assessing Authority for reasons best known to him, we do not approve of such a practice on the part of the authorities below.
Concluding that no substantial question of law arises in the present appeals filed by the appellant-Revenue, they were dismissed.
(See 2018-TIOL-1279-HC-KAR-CX)
