Supreme Court Of India
Lajya Dyeing & Bleaching Works vs. Union Of India & Ors.
Sections 1998FA(No. 2) 95
S.N. Variava & Brijesh Kumar, JJ.
Civil Appeal No. 411 of 2001
2nd April, 2003
Counsel Appeared
V. Lakshmikumaran, A.R. Madhava Rao, Alok Yadav & V. Balachandran, for the Appellant : Raju Ramachandran with Sidharth Chaudhury & B.K. Prasad, for the Respondents
ORDER
BY THE COURT :
This appeal is against an order of the Bombay High Court dt. 8th Feb., 2000.
2. Briefly stated the facts are as follows : The appellants are job workers who process fabric on behalf of others. A question arose as to whether or not they were liable to pay excise duty, and if so, on what basis the value had to be worked out. Show-cause notices were issued to them. A large number of writ petitions came to be filed. They all culminated in the judgment of this Court in Ujagar Prints vs. Union of India (1989) 75 CTR (Allied Laws)(SC) 1 : (1989) 3 SCC 488. A clarificatory order was subsequently issued [(1989) 3 SCC 531]. Whilst these matters were pending before this Court, the parties had been directed to pay 50 per cent of the demand and to furnish bank guarantee for the balance 50 per cent After the culmination of these matters, the Department sought to enforce the bank guarantees. A clarificatory order was passed by the High Court to the effect that the bank guarantees could not be encashed unless the demand was reassessed on the basis set out in the judgment of this Court. After the clarificatory order by the High Court, a notice dt. 31st March, 1994, was issued to the appellant. This notice referred to the orders of the Supreme Court and the High Court and stated that on the basis of these orders the Department had re-examined the declarations filed and determined the value as per the orders. It was stated that the demand of Rs. 1,34,51,185.45 (in accordance with the demand notices issued for the period 1979 to 30th June, 1982) was proposed to be confirmed. This notice then called upon the appellants to show-cause. A hearing took place on 22nd June, 1995. According to the appellants all that happened at this hearing was that the appellants asked for details of the demand notices which was agreed to be furnished. According to the respondents there was a complete hearing on that date. On 14th July, 1995, the Asstt. Commr. addressed to the advocate of the appellants a letter which reads as follows : “This has reference to the personal hearing which you attended before me on 22nd June, 1995, in the case of Lajya Dyeing and Bleaching Works during the course of which you had requested for details of demand notice issued so that payment procedure could be facilitated. Total demands pertaining to Bombay-1, were amounting to Rs. 1,34,51,185.45 out of which 50 per cent had already been paid by your clients as per Supreme Court’s order. The balance dues of Rs. 67,25,592.30 (Rs. sixty-seven lakhs twenty-five thousand five hundred and ninety-two and paise thirty only) are now to be paid.A separate list of demands issued by Bombay-2 CIT is also enclosed for your ready reference. From this it will be very clear that the dues being paid by you to Bombay-2 CIT do not include the due pertaining to this Commissionerate. You may therefore, advise your client Lajya Dyeing and Bleaching Works to make the balance payment of Rs. 67,25,592.30 immediately.” Along with this letter the particulars of demand were also annexed. Matters stood like this till the Kar Vivad Samadhan Scheme, 1998 (in short “KVSS”), was introduced w.e.f. 1st Sept., 1998. The appellants filed a declaration under this Scheme. This was rejected on 19th Feb., 1999, on the ground that adjudication has alreadytaken place and that the tax arrears in question were not in dispute on the date the declaration was filed. The appellants then filed Writ Petn. No. 728 of 1999 in the High Court. In this writ petition they claimed that the letter dt. 14th July, 1995, was not an adjudication order. They claimed that it was merely a letter informing giving particulars of demand. They, therefore, prayed that their declaration be accepted. They also prayed that the alleged order dt. 14th July, 1995, was passed without following the principles of natural justice and that it should be quashed.
This writ petition has been disposed of by the impugned judgment. A reading of the impugned order shows that the only ground urged before the High Court was that the rejection of their declaration was wrong. It is clear that the challenge to the validity of the order dt. 14th July, 1995, was not pressed before the High Court. Even in the SLP, before this Court, no ground is taken regarding the validity of the order dt. 14th July, 1995. Thus, the only question before this Court is whether, on 14th July, 1995, there was an order of adjudication. We have been taken through the adjudication manual as well as s. 35 of the Central Excise Act and r. 213. It has been urged that a reading of the letter dt. 14th July, 1995, makes it clear that it is not an order as contemplated under the Act. It is urged that the Department was to re-evaluate as per the guidelines laid down by this Court and that no such revaluation has taken place. It is urged that the letter dt. 14th July, 1995, could not be considered to be an order of adjudication.
3. Under s. 11A(2) of the Central Excise Act, the officer, on a consideration of the representation, if any made, must determine the amount of duty due and thereupon the assessee is to pay the amount so determined. If the amount of duty is determined and the appellants have been called upon to pay that amount then there has been adjudication. The High Court, in the impugned judgment, has held that the demand made earlier is confirmed and therefore there is an adjudication. We are in agreement with the view expressed by the High Court. The order dt. 14th July, 1995, makes it clear that a personal hearing was given on 22nd June, 1995. It sets out what has already been paid. Then it calls upon the appellants to pay the balance amount. Thus, there has been adjudication and there is a demand. It may be that this order is not in the format prescribed. It may also be that the principles of natural justice were not followed but those are grounds on which the order could have been challenged. In fact, these grounds were taken in the writ petition. However, those grounds were not pressed. We have, therefore, not looked into these aspects and express no opinion thereon. The question then arises is whether the appellants are entitled to the benefit of the KVSS. Sec. 95 of the Scheme makes it clear that in cases where no appeal or reference or writ petition is admitted or pending before the appellate Court or the High Court or the Supreme Court and where no application for revision is made before the Central Government, the Scheme is not to apply. In this case, admittedly, on the due date, i.e., 31st March, 1998, there was no pending appeal, reference or writ petition or application. Under these circumstances, the declaration was correctly rejected. We, therefore, do not find any infirmity in the impugned order. The appeal stands dismissed. No order as to costs.
[Citation : 263 ITR 763]
