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2010 DIGILAW 563 (JK)

Samrat Ferro Alleys (P) Ltd. v. Union Of India

2010-11-10

MUZAFFAR HUSSAIN ATTAR

body2010
1. In this petition, order dated 27th March, 2003 passed by respondent no. 2 in Appeal no. 121/CE/CHD-II/02 is called in question to the extent it has been directed for charging of interest and penalty to the tune of Rs. 68,740/-. 2. Petitioner availed and utilized a sum of Rs. 221661/- as MODVAT credit and it was alleged by the respondents that the said amount was availed in contravention of Rules 57-A and 57-G of Central Exercise Act, 1944 (for short Act of 1944). The demand show cause notices were issued. Petitioner feeling aggrieved of the notices challenged the same in a Statutory appeal, which was heard and decided by Respondent no. 2 in terms of order impugned in this writ petition. Respondent no. 2, in the appeal, returned a finding that credit of Rs. 268615/- is admissible and that of Rs. 68740/- is in admissible. Respondent No. 2, accordingly, confirmed the demand of Rs. 68740/- along with charging of interest under Section 11-AB as also imposition of the penalty. 3. Petitioner has filed this writ petition to challenge the said order on the principle ground that Section 11-AB and Section 11-AC of Act of 1944 provides that there has to be intention to commit the act. 4. Respondents in their objections have stated that petitioner was not entitled to receive the amount in law which he has taken. 5. Heard learned counsel for the parties. Considered the matter. 6. Learned counsel for petitioner submitted that it was assumed by the petitioner that source from which the material was purchased, must have paid the Central excise tax on the raw material and it is how the benefit was received from the respondents by the petitioner. Learned counsel further submitted that petitioner could not have been ordered to be charged with interest and penalty. Learned counsel in his fairness brought to the notice of the Court Judgment of the Hon’ble Supreme Court in case titled Union of India and ors. (Appellants) v. Dharamendra Textile Processors and ors. (Respondents) reported in (2008) 13 Supreme Court Cases 369 and stated that in the said judgment the Hon’ble Supreme Court has ruled that penalty under that provision is a civil liability and willful concealment is not an essential ingredient for attracting civil liability. 7. The issue raised in this writ petition has been negated by the Hon’ble Supreme Court in the above mentioned case. 7. The issue raised in this writ petition has been negated by the Hon’ble Supreme Court in the above mentioned case. Learned counsel submitted that the phraseology used in Sections 11-AB and 11-AC has not been considered. When it was brought to the notice of the learned counsel for petitioner that it were these provisions of law which were under consideration of the Hon’ble Supreme Court and that after considering phraseology of these provisions of law the Hon’ble Supreme Court has ruled as aforesaid, learned counsel again in his fairness and in view of law laid down by the Hon’ble Supreme Court submitted that this writ petition does not survive for further consideration and merit dismissal. 8. The issue raised in this petition is answered in the judgment (supra), inasmuch as the element of mens rea is not attracted in the legal and factual scenario obtaining in this case. 9. It was the duty of the petitioner to ascertain as to whether the Central Excise Tax has been paid by the source from which the raw material was purchased and it is only after confirming the said aspect of the matter he could seek benefit of the MODVAT credit. On presumptuous conclusion, petitioner has sought benefit of MODVAT credit and has actually availed the same when as a matter of fact he was not entitled to get the said benefit. 10. For the above stated reasons, this petition, being meritless, is accordingly dismissed. Interim direction, if any, shall stand vacated.