Central Excise - 100% EOU - DTA Clearances - No Third Time Cess - Strictures on Department - HC
WHAT is the amount of excise duty payable by EOUs for clearance of their goods to the DTA? This has been a confusing issue for nearly a decade and the issue had been almost settled by the decision of the Larger Bench in Kumar Arch Tech Pvt Ltd Vs Commissioner of Central Excise - apart from a High Court and the Supreme Court.
But the Departmental officers at the adjudicating levels of Assistant Commissioner, Additional Commissioner and Commissioner have scant respect for the Tribunal, High Courts and even the Supreme Court. They work on the mantra - confirm the demand - whatever be the views of the higher courts - for they know pretty well that courts are kind and will not take action against them and the Department will be happy if they simply confirm the demands.
Recently the same issue reached the Gujarat High Court for a third time.
It was in the case of Sarla Performance Fibers Ltd. vs. Commissioner of C.Ex. Vapi reported in - () that the Tribunal held that once the measure of Custom Duty equivalent to Central Excise Duty leviable on the like goods had been worked out, the question of levying the education cess separately in respect of clearance by 100% EOU to DTA would not arise. Revenue took the matter in appeal before the Gujarat High Court which dismissed it as the appeal had to be filed in the Supreme Court. () Revenue's appeal to the Supreme Court was dismissed on the ground of delay on 15.2.2013.
Now, in the case of Claris Lifesciences, the Tribunal relied on Sarla Performance and allowed the appeal of the assessee. (). The Department did not lie low. They continued with their notices and adjudication orders. Against one such order, the assessee approached the High Court without going through the rigours of the appellate channels. The High Court disapproved the act of adjudicating authority in no uncertain terms and without hesitation struck down the adjudication order.
Even this order of the High Court did not stop the Department from issuing further notices. This time the assessee did not wait for even the adjudication orders; it challenged the Show Cause Notices. And the High Court came down rather heavily on the wise officers of the Department. The High Court observed,
"It needs to be noted with strong disapproval that the repeated acts of the adjudicating authority of ignoring the decision of this Court is impermissible xxxxxxxxx
Despite clear and specific directions and authoritative pronouncements, act of issuance of show cause notice by the Deputy Commissioner is wholly impermissible and unpalatable and deserves to be quashed and struck down with a specific note of strong disapproval. The respondents simply could not have exercised the powers contained under the statute in such arbitrary exercise and in complete disregard to the pronouncement of this Court particularly reminding the Revenue authorities of the binding effect of decision of Tribunal on the identical question of law. This not only led to multiplicity of proceedings but also speaks of disregard to the direction of this Court rendered in the earlier petition of this very petitioner. Resultantly, petition stands allowed. Both the show cause notices dated 21.8.2012 and 22.1.2013 are quashed and struck down."
Wholly impermissible and unpalatable, strong disapproval, arbitrary exercise in complete disregard to the pronouncement of this Court, multiplicity of proceedings, disregard to the direction of this Court - normally such expressions from a High Court will shame any person in authority. The High Court has been extremely kind in not initiating action against the unconcerned officers, in spite of such despicable behaviour.
And strangely enough, the Department argued before the High Court that the Revenue's actions of issuance of show cause notice, demanding the cess with interest and penalty is not illegal nor without jurisdiction as the issue has not reached its finality and that the petitioner should exhaust the alternative remedy and respond to the show cause notices instead of straightaway rushing to the High Court by way of this petition.
So Revenue wants litigation at all levels - they are not prepared to end litigation at any stage.
Revenue seems to have misled the High Court. The Revenue submitted before the High Court that it could not appeal against the Tribunal's order in Sarla Performance, as it does not conform to the monetary limits. But the fact is that Revenue did appeal to the Supreme Court in CA NO. D4856/2013 and the appeal was dismissed on the ground of delay on 15.2.2013; yet the Revenue informs the High Court that it could not appeal.
Further Revenue appears to have not informed the High Court that this very issue has been emphatically decided by the Larger Bench of the Tribunal in the Kumar Arch case - 2013-TIOL-614-CESTAT-DEL-LB.
Of course even the petitioner seems to have missed this.
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