H.V. Axles Ltd. vs Union of India

Harish Tandon, J.—By consent of parties, G.A. No. 218 of 2012 is taken on day''s list. This is an application taken out for amendment of the cause title of the writ petition. The petitioners seek an order for correcting the name of the petitioner from "H.V. Axles Ltd." to "TML Drivelines Ltd." on the strength of the order of amalgamation passed by the Hon''ble High Court. This Court finds that such application is formal in nature and is thus allowed. The office is directed to make necessary amendments in the Cause Title.

The core issue involved in the proceeding before the Commissioner was whether the bill discounting charges by the bank in terms of an agreement with the Tata Motors can be allowed to be included or excluded while determining the cost of the raw material. According to the petitioners, the arrangement between the Tata Motors and the bank was that if the buyer wants an immediate payment for the supplies, the bank would pay the less amount of 1.9 per cent of the total value of the bills which partakes the character of an interest charged by the bank and, therefore, cannot be included in assessing or evaluating the costs of the raw materials.

Admittedly the petitioners are job workers and manufacture of Axles for which the raw materials are supplied by the Tata Motors. The Commissioner negatived the contention of the petitioners that the amount equivalent to 1.9 per cent of the total bill cannot be excluded while assessing the value of the raw materials and directed the petitioners to pay the excise duty on the said amount, it is not in dispute that the petitioners have not paid the excise duty but as it appears from the facts narrated hereinabove it is restricted to an amount equivalent to 1.9 per cent of the bills of the raw materials. The order of the Commissioner is assailed before the Tribunal by the petitioners. The petitioners took out an application for waiver of the precondition deposit which is disposed of by allowing the waiver to the extent of around 50 per cent. A miscellaneous application for reconsideration of the said order also stood dismissed by the Tribunal on the finding that the order sought to be reconsidered does not contain any error on the face of the record. Both the orders are assailed in this writ petition. Initially, this Court disposed of the writ petition directing the Tribunal to reconsider the miscellaneous application afresh as it does not contain any reasons. The department carried the said order to intra Court appeal whereupon the Division Bench of this Court set aside the order and directed the Hon''ble Single Bench to examine all aspects of the matter including whether the precondition deposit of Rs. 8 crores passed earlier and rejection of the modification of the earlier order were justified or not. The counsels appearing for both the parties have addressed on a parent order by which an application for seeking waiver of precondition deposit is disposed of by the Tribunal.

The learned Advocate appearing for the petitioners vehemently submits that the same Commissioner in another matter, where the case of the similar circumstanced person was being considered, took a contrary view to what have been taken in the present case. According to the petitioners the Commissioner has not recorded any additional or different facts or the facts relating to a changed circumstances and, therefore, the order impugned per se is not maintainable. The learned Advocate appearing for the petitioners further submits that the Tribunal while considering the application for waiver of the precondition deposit must record the reasons relating to undue hardship which does not always necessarily mean the financial hardship as a strong and good prima facie case if made out by the parties is also one of the relevant factors which is to be considered.

The learned Advocate appearing for the department submits that the Tribunal has considered the submissions made before it and has disposed of the same after recording the reasons permitting the waiver to the extent of 50 per cent approximately. The said respondents further submit that the order disposing of the miscellaneous application cannot be faulted with as it has been categorically held that there is no error apparent on the face of the record.

Mr. Maity was very much vocal in contending that the point now agitated by the petitioner was not canvassed before the Tribunal and, therefore, mere non-recording of the findings of the aforesaid point cannot vitiate the order.

Having considered the respective submissions, I have already indicated that the core issue involved in the writ petition relates to the charges to the extent of 1.9 per cent of the value of the bills paid by the Tata Motors to the bank in terms of an agreement which would be included within the cost of the raw material while determining the excise duty for its payment by the job workers. The department in respect of another case based on identical and similar facts have taken a contrary view to what have been taken in the present case. According to the petitioner, an order passed in other matter was placed before the Commissioner as well as before the Tribunal but the Tribunal has omitted to record findings thereupon and my endeavour has also failed to find out any finding recorded by the Tribunal on the above issue.

The aforesaid point, in my opinion, is one of the relevant factors which should be considered by the Tribunal while granting the waiver of the deposit of the duty assessed. I am not entering into an arena of the dispute whether the said point was canvassed before the Commissioner or not, as Mr. Maity pleads ignorance in the absence of a specific instruction in this regard. This Court feels that the Tribunal should consider the said point and shall record its findings thereupon. At this juncture Mr. Maity, drew the attention of this Court to a Division Bench order which directed the matter to be considered afresh and submits that remitting the matter back to the Tribunal for reconsideration would be contrary to the mandate of the Division Bench. On meaningful reading of the order of the Division Bench this Court finds that on earlier occasion, the writ petition was remanded to the Tribunal for reconsideration solely on the ground that the Tribunal failed to record reasons while dismissing the miscellaneous application seeking reconsideration of the parent order.

It is pertinent to record that the miscellaneous application though captioned as an application for reconsideration but in effect an attempt is made to review an earlier order. The Division Bench held that the relevant factors for consideration of an application for review was recorded by the Tribunal and, therefore, it cannot be said that the said order is bereft of reasons as held by the Single Bench.

Since the Division Bench directed the Hon''ble Single Bench to consider both the orders namely parent order by which an application for waiver of the precondition deposit as well as the order passed on the miscellaneous application are to be considered, this Court, therefore, finds that there is no impediment to remit the matter for reconsideration before the Tribunal on the basis of the findings recorded hereinabove.

In view of the above, this Court sets aside the parent order dated 15th June, 2009 passed by the Tribunal and directs the Tribunal to reconsider the said application for waiver of the precondition deposit on all points including the points indicated hereinabove that may be agitated by the parties and shall dispose of the said application within three weeks from date of communication of this order by providing reasons in accordance with law. Since the subsequent order passed on miscellaneous application is dependent upon the parent order, in view of the quashing or setting aside the parent order, this order cannot independently stand and is accordingly set aside. The writ petition is thus disposed of without any order as to cost.