Laxmi Steel Rolling Mills vs Union of India

Jawahar Lal Gupta, J.—This is a bunch of 11 writ petitions, Counsel for the parties are a greed that these petitions involve identical facts and raise similar issues. These can, thus, be disposed of by a common order. Learned Counsel have referred to the factual position as emerges from the record of Civil Writ Petition No. 23 of 1999. This may be briefly noticed.

The petitioner is engaged in the manufacture of Hot Re-rolled products of non-alloy steel. In the purported exercise of the power u/s 3A, which was inserted in the Central Excise Act, 1944 by Section 81 of the Finance Act, 1997, the Commissioner of Central Excise, Chandigarh-I determined the annual capacity of the petitioner-Unit as 5018-305 MT. The order was issued on April 27, 1998. Thereafter, the petitioner was informed that it was liable to pay excise duty at the rate of Rs. 1,25,458/- per month. For the year 1997-98 (September, 1997 to March, 1998), the total liability was fixed at Rs. 8,78,206/-. The petitioner deposited Rs. 2,83,626/-. This left an arrear of Rs. 5,94,580, vide notice dated December 21, 1998. The Assistant Commissioner, Central Excise, Division Patiala, directed the petitioner to deposit the amount of Rs. 5,94,580/- within five days, failing which it was threatened with action by way of attachment of the goods, stocks, plant and machinery. Aggrieved by the notice, the petitioner has filed the present writ petition. It has been averred that the order dated April 27, 1998, by which the petitioner''s capacity had been fixed, has been set aside by the Custom Excise and Gold (Control) Appellate Tribunal, New Delhi, on June 29, 1998. Thus, the very basis for the levy and the demand does not exist. On this basis, the petitioner prays that the impugned notice is liable to be set aside.

The respondents seek the Court''s permission to place on record the written statement. C.M. No. 3276 of 1999, filed by the respondents, is allowed. The written statement is taken on record.

In this written statement, the petitioner''s averment, regarding the order passed by the Tribunal on June 29, 1998, has been admitted. However, it has been pleaded that the order passed by the Commissioner regarding the levy has to be "discharged" and "in the event of any subsequent relief, the party may resort to realisation of such impugned amount in form of refund/re-adjustment". On this basis, it is prayed that the writ petition be dismissed.

Learned Counsel for the parties have been heard.

Mr. Gumber, who appears for the respondents, concedes that the very basis on which the demand regarding the levy of excise duty had been raised, is no longer in existence. The order passed by the Commissioner has been set aside by the Tribunal. No fresh order, determining the petitioner''s capacity, has yet been passed. In fact, in accordance with the directions given by the Tribunal, the respondent-authority has to disclose the basis on which the capacity of the petitioner is sought to be determined. It is after giving it an opportunity that the order has to be passed. The needful has not been done so far. Thus, the very basis of the impugned demand is non-existent. Consequently, we cannot sustain the impugned notice, a copy of which has been produced as Annexure P-5 with the writ petition. We quash it.

It is true that the petitioner is succeeding on the basis of the order passed by the Tribunal. However, it is liable to pay excise duty in accordance with law. Mr. Balbir Singh, who has argued these cases, states that the petitioner is depositing the excise duty in accordance with its liability every month. We shall only observe that the quashing of the impugned notice shall not debar the respondents from claiming duty in accordance with law and the petitioner''s liability as may be finally determined in accordance with law.

In view of the above, these petitions are allowed. The parties are, however, left to bear their own costs.