M/S Shri Vinayaka Rice Techo Vs. the Commissioner Central Excise and Custom and Others - Court Judgment

SooperKanoon Citationsooperkanoon.com/1064716
CourtPunjab and Haryana High Court
Decided OnFeb-19-2013
AppellantM/S Shri Vinayaka Rice Techo
RespondentThe Commissioner Central Excise and Custom and Others
Excerpt:
in the high court of punjab and haryana at chandigarh civil writ petition no.608 of 2013 (o&m) date of decision: february 19, 2013 m/s shri vinayaka rice techo …..petitioner versus the commissioner, central excise and custom and others .....respondents coram:- hon'ble mr.justice a.k.sikri, chief justice hon’ble mr.justice rakesh kumar jain, judge present: dr.anmol rattan sidhu, senior advocate with mr.rajbir attri, advocate for the petitioner mr.sukhdev sharma, advocate for revenue .a.k.sikri, c.j.: (oral) 1. petitioner firm, namely, m/s shri vinayaka rice techo is engaged in the business of manufacturing stainless steel, paddy parboiling and drier plant. according to the petitioner, it falls under the central excise tariff heading 8437 for which the rate of duty is nil. the officers of the department had visited the factory of the petitioner on 5.9.2012 when search warrants were issued by the additional commissioner of central excise commissionerate, panchkula vide letter dated 5.9.2012. after conducting search of the premises, goods for a value of rs.88,01,000/- were detained. according to the respondents, the goods attract the excise duty and are not exempted from the duty, as these goods fall in cet heading 8419 and no.8437. there is a dispute of classification of the goods manufactured by the petitioner. on that basis, a case is booked cwp-608-2013 -2- against the petitioner-firm and as per the letter dated 1.1.2013 issued by superintendent of central excise, range-i, the excise duty payable by the petitioner is in the sum of rs.56.92 lacs. the said letter dated 1.1.2013 also states that the assistant commissioner has given directions that the petitioner would not clear any excisable goods without payment of duty, otherwise penal action will be taken against the petitioner as per the central excise rules and act. two employees of the respondent-department are deputed at the premises of the petitioner who are not permitting the petitioner to clear the goods from its premises for sale. it is this order which is challenged by the petitioner by filing the present petition.”2. it is submitted that before passing the gag order dated 1.1.2013, not even a show cause notice was issued to the petitioner. it is also the case of the petitioner that the respondents are classifying goods under wrong category. the petitioner also relies upon circular dated 19.5.2010 issued by the board, as per which no excise duty is to be paid on the manufacture of plant and machinery which is meant for processing of paddy.”3. at present, the action of the respondents pertains to booking the petitioner in a case vide order dated 1.1.2013. obviously thereafter, before taking any final action, show cause notice will have to be issued by the respondents to the petitioner, giving the petitioner full opportunity to respond to the said show cause notice. that stage is yet to come. however, the only question which is to be gone into by this court at this stage is as to what cwp-608-2013 -3- should be the arrangement made in the interregnum, inasmuch as, the petitioner is not permitted to clear the goods without payment of excise duty. after hearing the counsel for the parties on this aspect, we are of the opinion that since the respondents are not permitting the petitioner to clear the goods without payment of excise duty, the respondents should issue show cause notice and conclude the proceedings at the earliest. further, there should be some condition imposed upon the petitioner for clearing the goods in the interregnum. having regard to these considerations in mind, we dispose of this writ petition with the following directions: i) the respondents shall issue show cause notice to the petitioner within 15 days from today. reply thereto shall be filed by the petitioner within 15 days thereafter; ii) the respondents shall take decision on the said show cause notice and pass final speaking orders within one month thereafter. needless to mention here that if the petitioner seeks oral hearing that shall also be granted before passing the order which shall be speaking order; iii) in the interregnum, the petitioner shall be entitled to clear the goods without payment of duty in cash, instead the petitioner shall furnish bank guarantee cwp-608-2013 -4- equivalent to the amount of duty so that in case the matter is decided against the petitioner, the respondents are in a position to encash the said amount; iv) in case the order passed in show cause notice goes against the petitioner, the bank guarantee shall not be encashed for a period 10 days to enable the petitioner to avail any legal remedy against such an order. ( a.k.sikri ) chief justice february 19, 2013 (rakesh kumar jain) pc judge
Judgment:

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No.608 of 2013 (O&M) DATE OF DECISION: February 19, 2013 M/s Shri Vinayaka Rice Techo …..Petitioner versus The Commissioner, Central Excise and Custom and others .....Respondents CORAM:- HON'BLE MR.JUSTICE A.K.SIKRI, CHIEF JUSTICE HON’BLE Mr.JUSTICE RAKESH KUMAR JAIN, JUDGE Present: Dr.Anmol Rattan Sidhu, Senior Advocate with Mr.Rajbir Attri, Advocate for the petitioner Mr.Sukhdev Sharma, Advocate for revenue .A.K.SIKRI, C.J.: (Oral) 1.

Petitioner firm, namely, M/s Shri Vinayaka Rice Techo is engaged in the business of manufacturing stainless steel, paddy parboiling and drier plant.

According to the petitioner, it falls under the Central Excise Tariff Heading 8437 for which the rate of duty is nil.

The officers of the department had visited the factory of the petitioner on 5.9.2012 when search warrants were issued by the Additional Commissioner of Central Excise Commissionerate, Panchkula vide letter dated 5.9.2012.

After conducting search of the premises, goods for a value of Rs.88,01,000/- were detained.

According to the respondents, the goods attract the excise duty and are not exempted from the duty, as these goods fall in CET Heading 8419 and No.8437.

There is a dispute of classification of the goods manufactured by the petitioner.

On that basis, a case is booked CWP-608-2013 -2- against the petitioner-firm and as per the letter dated 1.1.2013 issued by Superintendent of Central Excise, Range-I, the excise duty payable by the petitioner is in the sum of Rs.56.92 lacs.

The said letter dated 1.1.2013 also states that the Assistant Commissioner has given directions that the petitioner would not clear any excisable goods without payment of duty, otherwise penal action will be taken against the petitioner as per the Central Excise Rules and Act.

Two employees of the respondent-department are deputed at the premises of the petitioner who are not permitting the petitioner to clear the goods from its premises for sale.

It is this order which is challenged by the petitioner by filing the present petition.”

2. It is submitted that before passing the gag order dated 1.1.2013, not even a show cause notice was issued to the petitioner.

It is also the case of the petitioner that the respondents are classifying goods under wrong category.

The petitioner also relies upon Circular dated 19.5.2010 issued by the Board, as per which no excise duty is to be paid on the manufacture of plant and machinery which is meant for processing of paddy.”

3. At present, the action of the respondents pertains to booking the petitioner in a case vide order dated 1.1.2013.

Obviously thereafter, before taking any final action, show cause notice will have to be issued by the respondents to the petitioner, giving the petitioner full opportunity to respond to the said show cause notice.

That stage is yet to come.

However, the only question which is to be gone into by this Court at this stage is as to what CWP-608-2013 -3- should be the arrangement made in the interregnum, inasmuch as, the petitioner is not permitted to clear the goods without payment of excise duty.

After hearing the counsel for the parties on this aspect, we are of the opinion that since the respondents are not permitting the petitioner to clear the goods without payment of excise duty, the respondents should issue show cause notice and conclude the proceedings at the earliest.

Further, there should be some condition imposed upon the petitioner for clearing the goods in the interregnum.

Having regard to these considerations in mind, we dispose of this writ petition with the following directions: i) The respondents shall issue show cause notice to the petitioner within 15 days from today.

Reply thereto shall be filed by the petitioner within 15 days thereafter; ii) The respondents shall take decision on the said show cause notice and pass final speaking orders within one month thereafter.

Needless to mention here that if the petitioner seeks oral hearing that shall also be granted before passing the order which shall be speaking order; iii) in the interregnum, the petitioner shall be entitled to clear the goods without payment of duty in cash, instead the petitioner shall furnish bank guarantee CWP-608-2013 -4- equivalent to the amount of duty so that in case the matter is decided against the petitioner, the respondents are in a position to encash the said amount; iv) In case the order passed in show cause notice goes against the petitioner, the bank guarantee shall not be encashed for a period 10 days to enable the petitioner to avail any legal remedy against such an order.

( A.K.SIKRI ) CHIEF JUSTICE February 19, 2013 (RAKESH KUMAR JAIN) pc JUDGE