Associated Tours Madras (P.) Ltd. vs Additional Commissioner of Central Excise

V. Dhanapalan, J.�Heard Mr. Yashod Vardhan, learned Senior Counsel appearing for Mr. R. Murali, learned Counsel for the appellant and Mr. B. Vijay Karthikeyan, learned Counsel appearing for the respondent. What is challenged in this writ appeal is the order of the learned single Judge passed in W.P. (MD) No. 5273 of 2008, dated 31.10.2011, wherein the learned single Judge took a view that as to the challenge to the final order passed by the original authority, dated 06.06.2008, there is an effective efficacious remedy available before the appellate authority, namely, Commissioner of Customs and Central Excise, Tiruchirappalli and therefore, dismissed the writ petition, as against which, the present writ appeal is filed.

The original authority, namely, Additional Commissioner of Central Excise, Trichy, in the impugned proceedings in C. No. V/ST/15/44/2007-Cx.Adj., Order No. 5/2008-ST, dated 06.06.2008, passed an order confirming the demand of a sum of Rs. 50,47,395/- (Rupees Fifty Lakhs Forty Seven Thousand Three Hundred and Ninety Five only) on M/s. Associated Travels (Private) Limited, Trichy, towards differential service tax payable by them for the period from April 1998 to March 2005 under erstwhile section 73(1)(a) of Chapter V of the Finance Act, 1994; demanding interest at appropriate rates on the service tax amount demanded from the date on which the tax amount ought to have been paid till the date of payment, under section 75 of Chapter V of the Finance Act, 1994; imposing penalty of Rs. 50,47,395/- (Rupees Fifty Lakhs Forty Seven Thousand Three Hundred and Ninety Five only) under sections 76, 77 and 78 of Chapter V of the Finance Act, 1994; imposing a penalty of 13,00,000/- (Rupees Thirteen Lakhs only) under Section 78 of Chapter V of the Finance Act, 1994 on Shri S. Muthaiah, Managing Director of the M/s. Associated, as the person in-charge of, and was responsible to the company for the conduct of the business of the company at the relevant time under Section 81 and Section 79 of Chapter V of the Finance Act, 1994; imposing a penalty of Rs. 100/- (Rupees One Hundred only) per day, from the date on which the service tax amount for the month of September, 2003 ought to have been paid till the date of payment of amount demanded above under Section 76 of Chapter V of the Finance Act, 1994; imposing a penalty of Rs. 10,00,000/- (Rupees Ten Lakhs only) under Section 78 of Chapter V of the Finance Act, 1994 on Shri. R. Muruganandam, Manager of M/s. Associated, as he happened to be the authorized signatory for the service tax matters at the time when the offence was committed by M/s. Associated; imposing a penalty of Rs. 200/- (Rupees Two Hundred only) per day on the notice in respect of the service tax paying during the period from 01.04.1998 to 17.04.2006 under the provisions of Section 76 of Finance Act, 1994; and imposing a penalty of 2% per month in respect of the service tax payable during the period from 18.04.2006, till the date of payment of service tax due, under Section 76 of the Finance Act, 1994 on the notices and the penalty so payable under Sl. Nos. (i) and (ii) shall not exceed the actual amount of service tax payable.

Earlier, the appellant challenged the show cause notice dated 29.07.2004 issued under Section 73(1)(a) of the Finance Act, 1994, in W.P. (MD) No. 3652 of 2004 and this Court granted an order of interim stay on 24.11.2004. having regard to the provision of Section 71 of the Act, which was obtained prior to the crucial date of 16.07.2001 and subsequently amended provision after 16.07.2001 and the procedure for making an assessment has to be followed differently during those periods, however, the show cause notice has been issued for the period from 01.04.1998 to 31.03.2003, the said order was made absolute on 04.03.2005 and thereafter, the said writ petition came to be dismissed on 10.07.2007. Aggrieved over the same, the writ appeal in W.A. (MD) No. 137 of 2008 was filed and since the show cause notice which was challenged in the writ petition, has been culminated into a final order passed by the original authority, on 06.06.2008, the writ appeal was dismissed as infructuous. However, the appellant has gone before this Court to review the said judgment in the writ appeal, by filing Review Application (MD)No. 50 of 2008 and considering the facts and circumstances of the case and in the interest of justice, this Court found that no prejudice would be caused to the respondent, if the review applicant therein/appellant herein was allowed to raise his contentions in W.P. (MD) No. 5273 of 2008 and accordingly, disposed of the review application.

Since the original order has been merged with the show cause notice, the appellant has chosen to challenge the original order by filing W.P. (MD) No. 5273 of 2008 and the learned single Judge, placed reliance on the decision of the Hon''ble Supreme Court in Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement and Another, ,wherein it is held that ''When a statutory forum is created by law for redressal of grievance and that too, in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation and the High Court is a statutory forum of appeal on a question of law and that should not be abdicated and given a go-by by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction'', and accordingly, dismissed the writ petition, by order dated 31.10.2011. Challenging the same, the present writ appeal is filed.

The main thrust of the arguments of the learned Senior Counsel appearing for the appellant is that filing an appeal by the appellant before the statutory appellate authority was only by way of an abundant caution and the same will not take away the right of redressal of grievances in the writ jurisdiction. He would also argue that the High Court has a wider power while exercising the jurisdiction under Article 226 of the Constitution of India, including the issue with regard to the power of limitation, but the learned single Judge has not appreciated the fact that pendency of the appeal will not take away the power of the High Court relating to the jurisdiction of the Assessing Officer.

The learned Counsel for the respondent/revenue would contend that the appellant has chosen to prefer the appeal, pending adjudication of the writ petition and the counter itself would inform the position as on 27.04.2009 about the pendency of the appeal before the Commissioner of Central Excise (Appeals), Tiruchirappalli and therefore, the appellant having chosen a right forum, he is duty bound to get adjudication of the same in accordance with law and there are no warranting circumstances to interfere with the order of the learned single Judge.

We have considered the rival submissions and perused the materials available on record.

It is seen that the authority concerned, on a demand, issued a show cause notice on 29.07.2004 under section 73(1)(a) of the Act. However, the said notice was challenged before the Writ Court and the same was dismissed, as against which, a writ appeal was filed. By that time, the authority has taken a decision to pass final orders and therefore, the Writ Court as well as the appellate Court took a view that the show cause notice merged with the final orders and dismissed the appeal as it has become infructuous. The review application filed by the appellant was disposed of, with liberty to raise all his contentions before the concerned forum.

Now, it has come to understand from the averments made by the learned Counsel for the respondent in the counter dated 27.04.2009, which has been rightly observed by the learned single Judge in paragraph 4 of the order, that the petitioner had already filed an appeal before the Commissioner of Central Excise (Appeals), Trichy, in Appeal A. No. 113/2008-TRY (ST), against the order in Original No. 05/2008, dated 06.06.2008 passed by the Additional Commissioner of Central Excise, Trichy and the same is still pending decision. The learned Single Judge found that though the writ petitioner having availed his remedy of appeal, it was not clear as to why he had challenged the original order impugned in the writ petition and that when the Act provided for an efficacious remedy, the question of entertaining the writ petition under Article 226 of the Constitution of India, would not arise.

In this context, it is just and proper to refer to Section 73 of the Act hereunder:

"73. Value of taxable services escaping assessment,

(1) If--

(a) the Assistant Commissioner of Central Excise or, as the case may be, the Deputy Commissioner of Central Excise has reason to believe that by reason of omission or failure on the part of the assessee, to make a return under section 70 for any prescribed period or to disclose wholly or truly all material facts required for verification of the assessment under section 71, the value of taxable service has escaped assessment or has been under-assessed or service tax has been paid or has been short-paid or any sum has erroneously been refunded, or

(b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Assistant Commissioner of Central Excise or, as the case may be, Deputy Commissioner of Central Excise has in consequence of information in his possession, reason to believe that the value of any taxable service assessable in any prescribed period has escaped assessment or has been under-assessed or service tax has been paid or has been short-paid or any sum has erroneously been refunded, he may, in cases falling under clause (a), at any time within five years, and in cases falling under clause (b), at any time within one year, from the relevant date, serve notice on the person chargeable with the service tax which has escaped assessment or has been under-assessed or has not been paid or has been short-paid, or to whom any sum has been erroneously refunded, requiring him to show cause why he should not pay the amount specified in the notice.

Explanation.--Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the period of five years or one year, as the case may be, under this section."

The learned Senior Counsel for the appellant pointed out the question of limitation will bar the respondent from proceeding with the demand of the service tax, as per the provision under Section 73 of the Service Tax Act and in case, clause (b) is followed, it is one year from the relevant date of service of notice on the person. He, therefore, submitted that the above provision would make it clear that there may not be any demand after the limitation prescribed and it is barred by limitation and that aspect has not been looked into by the authorities/for a below and the appellant may not have the liberty to agitate all the contentions which have been raised in the writ petition. Hence, the appeal before the appellate authority. However, the learned Counsel for the respondent would contend that there was a finding to that effect and it is for the appellant to raise the plea in the manner known to law.

Noticing that the writ petition has been dismissed as there is an effective efficacious remedy available and the appellant having chosen to prefer the appeal before the appellate authority, the Commissioner of Central Excise (Appeals), Tiruchirappalli, vide appeal No. 113/08- TRY, as against the original order dated 06.06.2008 and as the appellant''s contention on the point of limitation also warrants consideration, it is always open to the appellant to go before the appellate authority for adjudication of the matter in accordance with law.

Therefore, as the finding of the learned single Judge as to the appeal remedy is not contrary to law and in view of the availability of efficacious alternative remedy, the stand taken by the learned single Judge to that effect warrants no interference.

Accordingly, we are of the considered view that the appellant has to move the appellate authority and contest the matter keeping all the points raised before this Court open, including the limitation aspect, and in that event, the appellate authority shall decide the matter on merit and in accordance with law, untrammelled by any of the observations made by this Court in the earlier proceedings independently. In fine, the writ appeal stands disposed of. Consequently, the connected miscellaneous petition is closed. No costs.