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2000 DIGILAW 699 (BOM)

Bamni Proteins Ltd. (M/s. ) v. Ajay (Shri)

2000-09-21

D.D.SINHA

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JUDGMENT - D.D. SINHA, J:---Heard Shri Deo, learned Counsel for the petitioner and Shri Mishra, learned Counsel for the respondent. 2. The contempt petition is preferred by the petitioner for violation of the order dated 23-8-1999, passed by the Division Bench of this Court in Writ Petition No. 1159 of 1999. 3. The learned Counsel for the petitioner contended that the petitioner manufactures Ossein and Di-Calcium Phosphate (Animal Feed Grade) ('DCP'). It is further submitted that the respondent issued show cause notice on 3-3-1997 and trade notice dated 31-3-1997 whereby the petitioner was called upon to show cause as to why the Di-Calcium Phosphate (Animal Feed Grade) should not be classified under Chapter Sub-heading No. 2835.00 of Central Excise Tariff Act, 1985, attracting Central Excise Duty @ 6 per cent ad valorem and why the Central Excise Duty to the tune of Rs. 29,16,883/- should not be demanded and recovered from the petitioner under Rule 9(2) read with section 11-A of the Central Excise Act, 1944, along with penalty. 4. Being aggrieved by the said notices, the petitioner filed the writ petition bearing W.P. No. 1159 of 1999 in this Court challenging the legality and propriety of the above referred notices and classification done by the Central Excise Department. This Court on 23-8-1999 allowed the petition filed by the petitioner on the basis of the judgment of the CEGAT as well as judgment of the Gujarat High Court wherein it was held that section 37-B does not empower or authorise the Board to issue directions which are contrary to the decision rendered by the tribunal. The Special Leave Petition was preferred before the Apex Court in the case of (Commissioner v. Raymon Glues and Chemicals)1, 1998(102) E.L.T. 424 Tribunal and the S.L.P. was summarily dismissed. The learned Counsel contended that the Division Bench of this Court, therefore, in Writ Petition No. 1159 of 1999 confirmed the view of the appellate tribunal that Di-Calcium Phosphate (Animal Feed Grade) is classifiable under Heading 23.02 and sub-heading 2302.00 of the Central Excise Tariff Act, 1985. The petition was allowed and the petitioner was given an opportunity to apply for refund of the amount, if any, collected without authority of law. 5. The petition was allowed and the petitioner was given an opportunity to apply for refund of the amount, if any, collected without authority of law. 5. The learned Counsel contended that respondent once again on 20-4-2000 issued a show cause notice which is identical in nature and character with that of show cause notice dated 3-3-1997, once again classifying Di-Calcium Phosphate under Chapter Sub-heading No. 2835.00 of Central Excise Tariff Act, 1985, and again demanded excise duty to the tune of Rs. 28,47,395/-. The petitioner, therefore, filed the present contempt petition praying that the respondent has in total disregard to the above referred order, passed by the Division Bench of this Court, issued the show cause notice dated 20-4-2000 and, therefore, appropriate action be taken against them. 6. This Court has taken cognizance of the matter by issuing Notice on 6-9-2999. 7. Shri Mishra, learned Counsel appearing for the respondent, Central Excise, filed affidavit in reply. It is contended that after the show cause notice dated 20-4-2000 was issued by the respondent, the respondent had issued a letter dated 31-7-2000 to the petitioner company, which is annexed with the reply as annexure Rule-II, whereby the petitioner was informed that the demand made in the show cause notice dated 19/20-4-2000 is a protective demand. It was further informed that the matter in question has already been taken up with the higher authorities for tagging this case with the S.L.P. in the case of Commissioner of Central Excise, Cochin v. M/s. Kerala Chemicals Proteins Limited and Commissioner of Central Excise, Coimbatore v. M/s. Rallies India Limited, admitted by the Supreme Court. The petitioner was further informed by that letter that the case of the petitioner will not be decided till the decision of the above referred S.L.P. filed by the department. 8. Shri Mishra, learned Counsel for the respondent contended that M/s. Bamni Proteins Limited is the subsidiary of M/s. Kerala Chemicals Proteins Limited. Since the identical issue in the case of Kerala Chemicals Proteins Limited, which is the holding company of M/s. Bamni Proteins Limited and the S.L.P. in respect of the same issues in pending with the Apex Court, the respondent though issued the show cause notice dated 19/20-4-2000, however, never intended to act upon it till the S.L.P. is decided by the Supreme Court and communication to that effect vide letter dated 31-7-2000 was sent to the petitioner. The learned Counsel, therefore, contended that there is no wilful disobedience by the respondent in respect of the order passed by the Division Bench of this Court. The learned Counsel further contended that the respondent has tendered unconditional and unqualified apology in this regard. 9. Considered the contentions raised by the learned Counsel for the respective parties and perused the order dated 23-8-1999, passed by this Court in Writ Petition No. 1159 of 1999 as well as the letter dated 31-7-2000 annexed by the respondent along with reply. It is no doubt true that the Division Bench of this Court, having been confirmed the order of the Appellate Tribunal and held that Di-Calcium Phosphate (Animal Feed Grade) is classifiable under Heading 23-02 and Sub-Heading 2302.00 of the Central Excise Tariff Act, 1985, the respondent must not have again classified Di-calcium phosphate under Chapter sub-heading No. 2835.00 and ought not to have demanded the Central Excise Duty till the S.L.P. is decided by the Apex Court. The action on the part of the respondent, prima facie does indicate that they have not taken sufficient care while issuing the show cause notice dated 19/20-4-2000, in view of the decision of this Court dated 23-4-2000. However, since it is brought to my notice that the respondent vide letter dated 31-7-2000 informed the petitioner that the demand is a protective demand and no further steps would be taken in this regard till the Special Leave Petition is decided by the Apex Court, it appears that the respondent realised their mistake and corrected the same by taking prompt steps in this regard. The respondent has also tendered unconditional apology before this Court. 10. Taking into consideration the facts and circumstances of the case, I am inclined to accept the unconditional apology tendered by the Assistant Commissioner of Central Excise. 11. In the result, for the reasons stated hereinabove, the notice dated 6-9-2000 issued by this Court is hereby discharged. Proceedings are dropped. Contempt petition is disposed of. Contempt petition disposed of accordingly. -----