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2019 DIGILAW 349 (RAJ)

Shree Cement Limited v. Union of India

2019-01-30

DINESH MEHTA`, SANGEET LODHA

body2019
ORDER : DINESH MEHTA, J : 1. The above captioned writ petitions have been filed by the petitioner – Shree Cement Limited and its Officers, calling in question the enquiry and consequent recovery proceedings initiated by the respondent – Central Excise Department in relation to the CENVAT Credit of the duty paid on the capital goods purchased for its Power Plants. 2. The first writ petition being DB Civil Writ Petition No.4487/2014 came to be filed by the petitioner Company with following prayers :- “(i) The impugned Fifth Summon dated 30.05.2014 Annex.31 alongwith other ‘impugned summons’ may be quashed and set-aside; (ii) the petitioner company may kindly be allowed to avail the CENVAT Credit on capital goods on the basis of Board’s Clarification dated 18.09.2012 Annex.11 and further hold that the petitioner has been rightly availing the CENVAT Credit on capital goods used in power plant situated within the factory premises. (iii) The respondents may also kindly be directed to stop the inquiry and/or investigation of settled issue as the same is against the principles of res judicata.” 3. As is evident from the pleadings and prayers reproduced above; the writ petition came to be filed essentially against the summons issued by the respondents. The Division Bench of this Court had issued notices of the writ petition albeit, without granting any interim protection. 4. During the pendency of the writ petition, on 06.01.2016, a Division Bench of this Court after hearing both the sides directed the Officers of the Company to appear before the competent authority, pursuant to the summons. The order dated 06.01.2016 reads thus :- “By summon dated 30th May, 2014, Shri M.M. Rathi, Vice President (Power Plant), M/s Shree Cement Limited, Bangur Nagar, Beawar had been summoned by the Superintendent, Central Excise (AE), Jaipur as per Section 14 of the Central Excise Act, 1944. The grievance of the petitioner is that the respondents are summoning the petitioner again and again though definite explanation has already been given. It is further stated that a decision has already been taken by the respondents about their objections but only to harass the petitioner, such summons have been issued. Per contra, learned counsel appearing for the respondents submits that as per Section 14 of the Act, 1944, the person summoned or his authorized agent is required to appear before the competent authority. Per contra, learned counsel appearing for the respondents submits that as per Section 14 of the Act, 1944, the person summoned or his authorized agent is required to appear before the competent authority. But in the instant matter, neither the person summoned or his authorized agent ever appeared before the competent Authority though certain information was tendered on his behalf. Be that as it may be, having considered all facts of the case, we deem it appropriate to direct the petitioner to appear either in person or through his authorized agent conversant with facts of the case before the competent Authority on or before 1st of February, 2016. The Authority competent shall complete the enquiry with the assistance of the person summoned or his authorized agent as early as possible. The authorized agent or the person summoned shall be at liberty to produce whatever material available to supports his version before the competent Authority. Put up on 1st March, 2016.” 5. In pursuance of the above order dated 06.01.2016, the Officers of the petitioner Company appeared before the respondent – adjudicating authority and put forth their case. The Dy. Commissioner, Anti-Evasion after conducting the enquiry was of the opinion that the company has wrongfully availed CENVAT credit and hence issued a show cause notice dated 20/22.07.2016 to the petitioner Company, proposing to disallow the CENVAT Credit of the duty paid on Capital Goods, procured for its power plant at Beawar Unit. Apart from recovery of CENVAT credit, he also proposed to take action against the Officers of the Company namely Mr. Arvind Khicha; Mr. S.K. Periwal; and Mr. M.M. Rathi. 6. On receipt of the aforesaid show-cause notice, the petitioner Company filed another writ petition being DB Civil Writ Petition No.10286/2016 laying a separate challenge to the notice. The Officers of the company also filed three separate writ petitions on 16.4.2018, challenging the show cause notice dated 20/22.07.2016, initiating the penalty proceedings against them. 7. A reply to the aforesaid writ petitions came to be filed by the respondents, wherein besides joining the issues on merit, the respondents have raised preliminary objections questioning the maintainability of the writ petitions. 8. No sooner had the learned Senior Counsel for the petitioner Company commenced his arguments, than learned Additional Solicitor General interjected and sought leave to make his submissions on the maintainability of the writ petition. 8. No sooner had the learned Senior Counsel for the petitioner Company commenced his arguments, than learned Additional Solicitor General interjected and sought leave to make his submissions on the maintainability of the writ petition. He firstly contended that the first writ petition being DB Civil Writ Petition No.4487/2014, challenging the issuance of summons has been rendered infructuous inasmuch as in furtherance of the summons issued to the petitioner Company and its Officers, they have appeared and the adjudicating authority has not only completed its investigation, but has issued a show-cause notice dated 20/22.07.2016. In the backdrop of these facts, he submitted that the summons have been rendered redundant and the writ petition has been rendered infructuous. 9. Advancing his argument further, he pointed out that said show-cause notice dated 20/22.07.2016 is subject matter of other four writ petitions captioned above, and thus as far as first writ petition being DB Civil Writ Petition No.4487/2014 is concerned, nothing remains to be adjudicated therein as the petitioners have appeared before the respondents in furtherance of the directions passed by this Court on 06.01.2016, in their own writ petition. 10. Mr. Rastogi further contended that it is true that the investigation which had been launched against the petitioner Company was in relation to both the Plants, situated at Raas as well as Beawar, but the respondents have found no irregularity or recoverable amount qua its Raas Unit, whereas they have found that CENVAT Credit availed by the petitioner in relation to capital goods purchased for installation of Power Plant in Beawar was irregular. 11. Highlighting that the show cause notice dated 20/22.07.2016, proposing to recover the CENVAT Credit has been issued for the Beawar Plant only, learned Additional Solicitor General contended that since the show cause notice, impugned in all the four writ petitions relate to petitioner’s Plant at Beawar, which falls within the territorial jurisdiction of Jaipur Bench of this Court, these writ petitions are not maintainable at the Principal Seat. Learned Additional Solicitor General argued that the territorial jurisdiction should be strictly adhered to and the writ petitions filed by the petitioner Company should not be heard and decided at the Principal Seat. 12. In support of his arguments, Mr. Rastogi cited a few judgments, which we do not propose to dilate upon, as the same reverberates the settled legal position on the question of territorial jurisdiction. 13. Mr. 12. In support of his arguments, Mr. Rastogi cited a few judgments, which we do not propose to dilate upon, as the same reverberates the settled legal position on the question of territorial jurisdiction. 13. Mr. S.K. Bagaria, learned Senior counsel appearing for the petitioner Company on the other hand submitted that the writ petition filed by the petitioner Company being DB Civil Writ Petition No.4487/2014, challenging the summons issued to the petitioner Company still survives notwithstanding the issuance of show-cause notice. He argued that true it is, that the Officers of the Company have appeared before the respondent authorities, but the same was indisputably done to honour the directions issued by this Court on 06.01.2016. He contended that said order of the High Court was in the nature of interlocutory order, hence, the writ petition deserves to be decided on its merit, as the very jurisdiction of the Superintendent, Central Excise/ Dy. Commissioner of Central Excise to issue summons to the petitioner has been brought to judicial scrutiny of this Court much prior to the issuance of show cause notice dated 20/22.07.2016. 14. While maintaining that the Company’s first writ petition against the summons has not been rendered infructuous, Mr. Bagaria argued that other four writ petitions, laying challenge to the show-cause notice dated 20/22.07.2016 can well be heard and decided by the Principal Seat, inasmuch as the respondents had made enquiries and summoned evidence for both the plants viz. Raas and Beawar. He contended that indisputably Raas plant of petitioner Company is amenable to territorial jurisdiction of the Principal Seat and since the genesis of the litigation is rooted in the territorial jurisdiction of Principal Seat; merely because impugned show-cause notice does not propose to disallow the CENVAT Credit in relation to petitioner’s plant at Raas, the writ petitions filed by the petitioner Company cannot be held ‘not maintainable’ at Jodhpur. 15. Mr. Bagaria submitted that admittedly the petitioner’s first writ petition being DB Civil Writ Petition No.4487/2014 was pending consideration at Principal Seat, and during its pendency the show-cause notice in furtherance of the summons came to be issued, hence, the only course open for the petitioner Company was to approach the Principal Seat of this Court, as its earlier writ petition was pending consideration at Jodhpur. 16. 16. Learned Senior Counsel further contended that in the facts of the present case, since part of the cause of action has arisen within the precincts of Principal Seat; the writ petitions are very much maintainable and the Seat at Jodhpur has jurisdiction to hear the captioned writ petitions, including the subsequent writ petitions impugning the show-cause notice dated 20/22.07.2016. 17. In a bid to retain the record of the writ petitions at the Principal Seat, he even went ahead to state that various admissions are made by the respondents in their reply filed in DB Civil Writ Petition No.4487/2014 (such as page No.217 and 229 of paper book), upon which the petitioner Company proposes to rely while arguing the other four writ petitions filed against show cause notice dated 20/22.07.2016. While contending that the first writ petition challenging the summons is indisputably maintainable at the Principal Seat, he urged that it would lead to complexity, if the remaining writ petitions filed against the show-cause notice are not entertained here. Mr. Bagaria took us through various summons, notices and documents to satisfy that they relate to the plant at Raas also. 18. We have heard learned counsel for the parties and perused the material available on record. 19. Considering the first submission of Mr. Rastogi qua the first writ petition (DB Civil Writ Petition No.4487/2014) that it has become infructuous; while refraining from making any observations about the maintainability of the writ petition against issuance of summons, we are of the considered opinion that since pursuant to the summons issued to the petitioner Company and in compliance of the order dated 06.01.2016 passed by this Court in petitioner’s own writ petition, the petitioner and its representatives have appeared before the Officers of the Excise Department, the enquiry has been completed, and the same has culminated into issuance of the show-cause notice dated 20/22.07.2016, the writ petition against the summons has been rendered infructuous. We have no hesitation in holding that once a show-cause notice has been issued in furtherance of the summons, nothing remains to be adjudicated in a writ petition, which had been filed against the summons. 20. We have no hesitation in holding that once a show-cause notice has been issued in furtherance of the summons, nothing remains to be adjudicated in a writ petition, which had been filed against the summons. 20. Learned senior counsel for the petitioner contended that notwithstanding the Court’s prima-facie opinion that the instant writ petition qua first prayer regarding the summons has been rendered infructuous, the petitioner’s writ petition still survives at least to the extent of prayer No.2, vide which the petitioner has prayed that it be declared that the petitioner has rightly availed the CENVAT credit on capital goods used for power plant situated in the factory premises. 21. In our considered opinion, no sweeping declaration as prayed for by the petitioner in its prayer clause No.(ii) can be made. Right of a manufacturer to avail CENVAT Credit is dependent upon hoards of factors and such right is to be adjudicated and determined by the Officers of the Excise Department on the touch stone of the statutory provisions and existing facts. We outrightly decline to pronounce upon the petitioner’s entitlement to avail CENVAT Credit on the available facts. 22. In view of the discussion aforesaid, DB Civil Writ Petition No.4487/2014 is dismissed as infructuous. 23. Adverting to the remaining writ petitions, being DB Civil Writ Petitions No.10286/2016; 5490/2018; 5492/2018; and 5512/2018 the undisputed factual position, which has surfaced in the present facts is that the impugned show-cause notice dated 20/22.07.2016 proposing to recover the CENVAT Credit qua the duty paid on capital goods procured for power plants concerns the Beawar plant only and both the parties are ad-idem that no proceeding has been taken or contemplated for the Raas Plant of the petitioner Company. This being the fact situation, we are of the considered opinion that the subsequent writ petitions assailing the show-cause notice dated 20/22.07.2016 are required to be heard and decided by Jaipur Bench of this Court, as the Beawar Plant of the petitioner Company falls within the territorial trajectory of Jaipur Bench of this Court, so clearly defined in the Presidential Order dated 08.12.1976. 24. In view of above, the writ petitions being DB Civil Writ Petitions No.10286/2016, 5490/2018, 5492/2018 and 5512/2018 deserve to be and are hereby transferred to Jaipur Bench of this Court. 25. Registry is directed to transmit the record of these cases to the Jaipur Bench forthwith. 26. 24. In view of above, the writ petitions being DB Civil Writ Petitions No.10286/2016, 5490/2018, 5492/2018 and 5512/2018 deserve to be and are hereby transferred to Jaipur Bench of this Court. 25. Registry is directed to transmit the record of these cases to the Jaipur Bench forthwith. 26. These writ petitions (DB Civil Writ Petitions No.10286/2016, 5490/2018, 5492/2018 and 5512/2018) stand disposed of for statistical purposes at Principal Seat. Needless to observe that they shall be registered afresh, at Jaipur Bench, Jaipur and proceeded in accordance with law. 27. As a word of caution, we may observe that we have not pronounced upon the merit of the case or even maintainability of the writ petition against show cause notice. It shall be open for both the parties to advance arguments in this regard and any observation made in the present order shall not come in anybody’s way while arguing the case on merit or otherwise.