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2010 DIGILAW 577 (ORI)

JINDAL STAINLESS LTD. v. UNION OF INDIA (UOI)

2010-08-17

I.MAHANTY, V.GOPALA GOWDA

body2010
ORDER 1. Heard Mr. R. Raghavan, leaned counsel for the petitioner and Mr. P.K. Ray, learned Sr. Standing Counsel for Union of India. 2. The petitioner M/s. Jindal Stainless Ltd. has filed this writ petition seeking for issuance of a writ of certiorari to quash the Circular F. No. 267/11/2010-CX. 8, dated 8-7-2010 issued by the Government of India, Ministry of Finance in the Department of Revenue (Central Board of Excise & Customs), New Delhi and further to set aside the judgment rendered by the CESTAT, Principal Bench, New Delhi (Full Bench) in the case of 2010 (253) ELT 440 and also to quash the show cause notices dated 12-12-2007, 30-9-2008, 7-5-2009 and 26-11-2009 urging various facts 86 legal contentions and producing voluminous bulk records in justification of the prayer referred to supra. 3. It is contended by the learned Counsel for the petitioner that the said circular has been issued by the Central Board of Excise & Customs, New Delhi (hereinafter called "CBEC") under the signature of the OSD (CX-8) which is relatable to Section 37B of the Central Excise Act, 1944, which provides that the CBEC which is constituted under the Central Boards of Revenue Act, 1963 may issue instructions to Central Excise officers for the purpose of uniformity in the classification of excisable goods or with respect to levy of duties of excise on such goods and also issue such orders, instructions and directions to the Central Excise officers. 4. In the impugned Circular dated 8-7-2010 at paragraph-1 it has been stated that "it has also been stated by the Tribunal that amendment to Explanation-2 to Rule 2(k) of Cenvat Credit Rules, 2004, inserted vide Notifications No. 16/2009-C.E. (N.T.) clarificatory in nature and has retrospective effect". 5. 4. In the impugned Circular dated 8-7-2010 at paragraph-1 it has been stated that "it has also been stated by the Tribunal that amendment to Explanation-2 to Rule 2(k) of Cenvat Credit Rules, 2004, inserted vide Notifications No. 16/2009-C.E. (N.T.) clarificatory in nature and has retrospective effect". 5. On the other hand staterpent of counter affidavit has been filed by the Revenue seeking to justify the said Circular on the basis of the Full Bench decision of the Tribunal in the case of Vandana Global Ltd. v. Commissioner of Central Excise, Raipur (supra) and also placed strong reliance upon the CENVAT Credit (Amendment) Rules, 2009 which has been published in the Gazette Notification No. 16/2009-Central Excise (N.T.) on the 7th July, 2009, wherein by way of amendment of the Cenvat Credit Rules, 2004, clarification has been made with regard to the 'input' or 'capital goods before being put to use' in respect of the CENVAT credit facility which has been availed by the petitioner herein and it is further contended that the prayer sought for by the petitioner challenging the impugned circular cannot be granted unless the vires of CENVAT Credit (Amendment) Rules, 2009 are challenged. Having made the aforesaid submission and after hearing the learned Standing Counsel for the Revenue at length, he has invited our attention to paragraph-J of the statement of counter affidavit, which reads as under: J. That in reply to Para J-l to J-58 and K-l to K-20 it is humbly submitted that the reply submitted to the allegations made in the Show Cause Notices will be taken up by the adjudicating authority while deciding the cases on its own merit in the event, my lordships decides not to interfere at the stage of admission and the Commissioner, Central Excise, Customs & Service Tax, Bubaneswar-I shall decide purely on the question of law without being influenced by any observations a made otherwise bereft of acts and records. 6. 6. By placing reliance upon the said paragraph he further make submissions that the question of quashing the impugned circular does not arise in this case for the reason that the Commissioner, Central Excise, Customs & Service Tax, Bhubaneswar-I will not place any reliance whatsoever upon the said Circular for determination of the disputes and Us between the parities pursuant to the show cause notices issued to the petitioner which are impugned in this writ petition and will be. decided on its own merits. 7. In view of the statement of the learned Counsel for the Revenue and the averments made by opposite parties 3 and 4 in their counter affidavit as extracted herein above, we are of the considered view that since the impugned Circular will not be relied upon for any purpose by the Revenue in course of the pending proceeding, there exists no requirement or necessity for quashing the impugned Circular. Therefore, the first prayer of the petitioner is accordingly disposed of. 8. In so far as the quashing of the show cause notices are concerned, as prayed for in this writ petition, it is not necessary for this Court to interfere in those matters as replies have already been submitted by the petitioner before the Commissioner, Central Excise, Customs & Service Tax, Bhubaneswar-I, and the said Commissioner is required to take a decision on the same after considering the factual and legal aspects which have been raised by the petitioner in this case, since the matter remains pending before him. It is open for the petitioner to raise all such legal contentions including his contention that the amended Rules of 2009 have no retrospective effect. Therefore the challenge to the show cause notices issued to the petitioner are not tenable. If such contentions are urged by the Commissioner, Central Excise, Customs & Service Tax, Bhubaneswar-I shall do well to consider the same and pass appropriate order in accordance with law. 9. The petitioner placed reliance upon the judgment of Karnataka High Court in the case of Grasim Industries Ltd. Vs. C.B.E. and C., regarding the prospectivity of the notification dated 1-3-2003 as was held in the said case. 9. The petitioner placed reliance upon the judgment of Karnataka High Court in the case of Grasim Industries Ltd. Vs. C.B.E. and C., regarding the prospectivity of the notification dated 1-3-2003 as was held in the said case. It shall remain open for the petitioner to canvas all the legal contentions as well as the necessary case law before the Commissioner, Central Excise, Customs & Service Tax, Bhubaneswar-I and the same shall be considered and disposed of by the Commissioner on its own merit. With the aforesaid observations and liberty to the petitioner, this writ petition is disposed of. 10. If in the meanwhile the Commissioner has closed the hearing of the matter, it will have a serious civil consequence upon the petitioner and therefore, in the interest of justice, we direct the Commissioner to decide the matter after affording due opportunity of hearing to the pass appropriate orders in accordance with law, keeping in view the fact that this matter is pending before this Court form 29-7-2010.