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2012 DIGILAW 235 (JHR)

Tata Motors Limited v. Union of India

2012-02-15

APARESH KUMAR SINGH, PRAKASH TATIA

body2012
Judgment APARESH KUMAR SINGH Heard learned counsel for the parties. This writ petition has been preferred by the writ petitioner – M/s Tata Motors Limited as its application for waiver of pre-deposit of duty of Rs.21, 27,34,334/-and equivalent penalty amount has been rejected, however not in toto but the writ petitioner was directed to deposit 25 % of the duty confirmed. Learned counsel for the writ petitioner vehemently submitted that the issues are squarely covered by the Division Bench Judgment of this court in the case of Tata Engineering and Locomotive Company Ltd. & another Vrs. Union of India , reported in 1988(35) ELT 617 , Patna, wherein it has been held that the writ petitioner-company itself, who is manufacturing the chassis of the motor vehicles and getting the body built on the chassis from other parties, is not liable to pay the excise duties on the manufactured body of the said vehicle and that duty is required to be paid by the builders of the body. According to the learned counsel for the writ petitioner, against the said judgment S.L.P. was preferred and that was dismissed by the Hon'ble Supreme Court. Learned counsel for the writ petitioner also relied upon the Division Bench Judgment of the Rajasthan High Court, Jaipur Bench, delivered in Civil Writ Petition No. 7335 of 2006 in the case of M/s Bharti Hexacom Ltd. Vrs. Union of India and others , wherein it has been observed that in what circumstances there should not be insistence of pre statutory deposit for preferring appeal. Learned counsel for the petitioner also drew our attention to various cases referred in the said judgment. Learned counsel for the petitioner further submitted that the identical issues came up for consideration before the Apex Court in the case of Ujagar Prints, ETC, ETC Vrs. Union of India and others reported in 1988(38) E.L.T 535 (S.C.) and not only this, in view of the statutory deeming clause, as given in chapter 87 of the Central Excise Tariff Act, 1985, note 5, the “body builder” is the “manufacturer” and, therefore it is deemed manufacturer and is liable to pay the excise duty under Section 3, which is a charging section. It is submitted that Section 3 indicates that the excise duty is payable by manufacturer irrespective of the fact , who is the owner of the said product. It is submitted that Section 3 indicates that the excise duty is payable by manufacturer irrespective of the fact , who is the owner of the said product. Learned counsel for the writ petitioner also drew our attention to yet another order passed by the same Customs, Excise and appellate Tribunal, East Region Bench, Kolkata dated 25.3.2011, wherein by brief order the petitioner-appellant was permitted to prefer appeal without payment of the pre-deposit for preferring appeal. Learned counsel for the Revenue submitted that the authorities have considered the facts of the case in hand and gave detailed reasons for not waiving the complete payment of the duty. It is submitted that even the Hon'ble Supreme Court in the case of Benara Valves Ltd and others Vrs. Commissioner of Central Excise and another, reported in (2006) 13 Supreme Court Cases 347, which was relied upon by the learned counsel for the petitioner, also clearly indicates that the interim order against the pre-deposit or waiver of the pre-deposit cannot be just for asking particularly on the ground of any consequential hardship, which is a natural consequences and not depositing the amount, which may also be found due, was to be deposited by statutory payment for preferring appeal. Learned counsel for the Revenue also drew our attention to the various facts, which are to distinguish the cases relied upon by learned counsel for the petitioner and particularly the reasons given in the case of Tata Engineering and Locomotive Company Ltd. & another Vrs. Union of India , reported in 1988(35) ELT 617 , Patna,(Supra). We have considered the submissions of the learned counsel for the parties and perused the facts of the case. It is not in dispute that the petitioner-M/s Tata Motor Ltd. is the manufacturer of the motor vehicle chassis and they sale the chassis of the vehicle on the payment of appropriate excise duty, for which M/s Tata Motors entered into an agreement with various body builders of the vehicle to pay the duty of the vehicle on the manufactured chassis. The copy of the extract of the agreement has been placed on record by the writ petitioner also containing various clauses. The copy of the extract of the agreement has been placed on record by the writ petitioner also containing various clauses. The clause under the heading “Taxes” has been considered by the Tribunal in detailed order, which we would like to quote here from the impugned order, which is as under:- “However, on a simple reading of the said circular and also these judgments, it can easily be discerned that the fundamental requirement to apply the said principle rests on the dealing between the principal manufacturers i.e. raw material supplier and the job worker. It should be on principal-to-principal basis. In the present case, we find that the Applicant have transferred the chassis to the body builders under a peculiar arrangement, that is, against a trust receipt and the said chassis is being held by the body builders as trustee. Further, under the terms and conditions of the said arrangement against the heading, 'Taxes', it is mentioned that the excise duty paid by the Applicant would be available as CENVAT Credit to the body builders; the body builders are required to pay duty on the completely built-up vehicle only after the set-off of CENVAT Credit on chassis and the unutilized CENVAT Credit would belong to M/s Tata Motors, the Applicant. The said condition apparently raises a doubt and leads to an inference that the nature of dealings between the Applicant and the job worker are not on principal-to principal basis. The learned counsel during the course of arguments explained that the CENVAT Credit availed by the body builders had never been paid back to the Applicant. But that issue is a question of fact, and assuming that even if it was not paid back to the Applicant, the Applicant continued to have a right over the accumulated Credit lying in the books of the body builders. On the aspect of limitation, we find that in the letter dated 17.3.2003 written by the applicant to the Department, it is silent on the right of the Applicant over the unutilized CENVAT Credit accumulated in the books of the body builders. In the aforesaid circumstances, we are of the opinion that prima facie, the Applicant could not make out a case for complete waiver of the entire duty and penalty. There is no financial hardship pleaded by the Applicant. In the aforesaid circumstances, we are of the opinion that prima facie, the Applicant could not make out a case for complete waiver of the entire duty and penalty. There is no financial hardship pleaded by the Applicant. Keeping in view all the attendant circumstances including the interest of revenue, we direct the Applicant to deposit 25% of the duty confirmed within a period of six weeks from the date of communication of the order, and on deposit of the said amount, the balance amount of duty and penalty stands waived and its recovery stayed during pendency of the Appeal”. Not only this, we have seen the reasons given by the original authority in the order, which has been impugned in appeal, which is dated 30th November,2009, wherein the judgment relied upon by the learned counsel for the petitioner has been considered in detail and not only that all the facts have also been considered carefully to find out the nature of transaction between the petitioner and its said body builders on the chassis, which ultimately are being sold by the writ petitioner and also considered one of the cases that is reported in 2007(218) E.L.T 266(CESTAT). The contention of the petitioner is that since the petitioner has established a strong prima facie case rather his case is squarely covered by the various decisions referred to above including the Division Bench Judgment of this court, therefore, the Tribunal should have waived the conditions of pre-deposit, but we are of the considered opinion that the Tribunal in its impugned order as well as in the order dated 21.12.2011 gave reasons for taking different view and by impugned order did not waived the condition of pre-deposit. The Hon'ble Supreme Court in the case of Benara Valves Ltd Vrs. Commissioner of Central Excise and another, reported in (2006) 204 Supreme Court Cases 513(SC), clearly held that merely establishing of a prima facie case, interim order of protection should not be passed. But, if on a cursory glance, it appears that the demand raised has no leg to stand on and it would be undesirable to require the assessee to pay full or substantive part of the demand. But, if on a cursory glance, it appears that the demand raised has no leg to stand on and it would be undesirable to require the assessee to pay full or substantive part of the demand. The Hon'ble Supreme Court also cautioned that petition for stay should not be disposed of in a routine manner unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand and then held that there can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. The Hon'ble Supreme Court also observed that for a hardship to be “undue” it must be shown that the particular burden to observe or perform the requirement is out of proportion to the nature of the requirement itself and the benefit, which the applicant would derive from compliance with it. The word “undue” adds something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant. In view of the above reasons also and looking into the detail facts of the case with the judgments, which have been relied upon by the learned counsel for the petitioner and considered by the Tribunal while passing a detail reasoned order in contrast to the brief interim order passed by the same Tribunal in S.P.-459-594/09 in Excise Appeal Nos. 383/09 and 425/09 by the order dated 25.3.2011, we do not find any justification to interfere in a matter, where the petitioner itself knowing about the interim order dated 25.3.2011 passed in its own case and did not just chose to rely upon the said interim order before the Tribunal and invited a detailed order on merits, wherein, in fact the case has been considered on the facts of the case in hand, of the writ petitioner, which is not the position in the order dated 25.3.2011. However, it is necessary to maintain the judicial discipline by following even the interim order, which has been passed but earlier order had different fat situation, wherein that aspect of the matter has not been taken into consideration and different view also can be taken here in this case . However, it is necessary to maintain the judicial discipline by following even the interim order, which has been passed but earlier order had different fat situation, wherein that aspect of the matter has not been taken into consideration and different view also can be taken here in this case . If the Tribunal was not made aware of the order dated 25.3.2011, at the cost of repetition , we would like to observe that the reasons given in the order dated 21.12.2011 are quite different and distinct reasons, which are not be available in the order dated 25.3.2011. So far as contention of the writ petitioner that its case is squarely covered by the earlier judgment of the Division Bench of this court and also in the light of the Hon'ble Supreme Court judgment is concerned, we are of the considered opinion that at this stage this plea should be kept confined so as to not influence the Tribunal in any manner against the petitioner or against the Revenue as issues raised require consideration by the Tribunal itself and not by his court. But we find that there are reasons given, which cannot be said to be absolutely illegal or unwarranted for not granting relief to the writ petitioner. Therefore, this court is not inclined to interefere with the impugned orders. This writ petition is, therefore, dismissed. Learned counsel for the petitioner prayed that instead of payment of deposit of 25% of the amount , some indulgence may be granted and the petitioner-company may be permitted to furnish the security or bank gurantee. We are not inclined to grant such relief because of the reasons that there is no specific circumstances for doing so. Learned counsel for the petitioner submitted that in view of this order, he may be given some time to deposit the amount in question before the appellate authority. Six weeks time is granted for depositing the requisite amount before the Tribunal.