ETERNIT EVEREST LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE above batch of writ petitions have been filed by the very same writ petitioner, challenging the show cause notices issued as also in one writ petition the constitutional validity of Section 11d of the Central excises and Salt Act, 1944, hereinafter referred to as'the Act'. Several writ petitions relate to the various show cause notices issued for different periods and in other respects, the grounds of challenge are similar and identical. For a proper understanding of the grievance of the petitioner and an appreciation of the points urged on either side, it would be useful to refer to the facts pertaining to W. P. Nos. 11017 and 11018 of 1992. THE writ petition, W. P. No. 11017 of 1992 has been filed for the writ ofcertiorarito call for and quash the show-cause-cum-demand notices issued by the fourth respondent in O. S. No. 1906 dated 13-7-1992, calling upon the petitioners to show-cause as to why an amount of Rs. 2, 47, 05, 641. 22 as detailed in the annexure thereto for the period from 1-2-1992 to 30-6-1992 should not be demanded and recovered under Section 11a read with Section 11d of the Act with a consequent liability for penalty under Rule 210 of the Central Excise Rules, 1954 and giving the petitioners an opportunity to make their submissions in this regard. W. P. No. 11018 of 1992 has been filed with reference to the same show-cause notice, but seeking for a writ of declaration or any other appropriate writ or direction, declaring that section 11d of the Act isultra viresand unconstitutional, so far as the other writ petitions are concerned, they relate to similar show-cause notices issued relating to different periods demanding different sums of amount as set out hereunder :- Sl. No.-- W. P. No.-- Show-cause Notice and date --Amount demanded -- Period covered 1.-- [1968/93] -- O. C. No. 3436/28-12-1992 -- 2, 17, 46, 031/- -- 7/92 to 10/92 2. -- 9785/93 -- O. C. No. 888/23-4-1993 -- 2, 46, 51, 772/- -- 11/92 to 3/93 3. -- 19324/93 -- O. C. No. 2115/22-9-1993 -- 3, 17, 59, 137/- -- 4/93 to 8/93 4. -- 4878/94 -- O. C. No. 425/24-2-1994 -- 2, 91, 22, 288/- -- 9/93 to 1/94 5. -- 15337/94 -- O. C. No. 1258/25-7-1994 -- 2, 34, 44, 368/- -- 2/94 to 6/94 6. -- 20938/94 -- O. C. No. 1897/13-12-1994 -- 1, 95, 27, 466/- -- 7/94 to 10/94 7. -- 7294/95 -- O. C. No. 774/4-5-1995 -- 2,15, 08, 994/--- 11/94 to 2/95 8. -- 13413/96 -- O. C. No. 1599/8-9-1995 -- 2, 49, 83, 212/- -- 3/95 to 7/95

(2.) THE petitioners are a Company registered and incorporated in India and engaged in the manufacture and sale of asbestos cement products which are liable to Central Excise duty under Chapter 68 of the Schedule to the central Excise Tariff Act, 1985 and are also liable to special excise duty. THEy are said to be in the business of manufacture and sale of asbestos cement products for the last more than 50 years and carrying on their manufacturing activities at four factories situated at Kymore in Madhya Pradesh, Mulund in bombay, Podanur in Tamil Nadu and Calcutta in West Bengal. THE Central government is said to have issued a Notification No. 60 of 1991-C. E. , dated 25-7-1991 as amended subsequently by Notification No. 26/92-C. E. , dated 1-3-1992 in exercise of its powers under Section 5a of the Act and in supersession of the earlier notification dated 16-11-1989 exempting all goods falling under chapter 68 of the Tariff Act, 1985 containing more than 25% by weight of fly ash from the whole duty of excise leviable thereon which was specified in the said schedule. Consequently, the goods falling within Chapter 68 of the Tariff act became wholly exempt from the levy of excise duty if it is shown to contain more than 25% by weight of fly ash.

(3.) THE petitioners have filed a reply affidavit wherein while reiterating the stand taken in the affidavit filed in support of the writ petitions, it is further contended that Section 11d of the Act merely makes a declaration of a liability to make payment to the Government by any person who has collected any amount from the buyer of any goods representing any sum to be the duty of excise and that in the absence of any provision, therein for any forum or authority or prescription of any machinery for adjudication of the vital jurisdictional issue viz. , whether any amount has really been collected from the buyer of any goods as representing the duty of excise, the impugned show-cause notices are totally without jurisdiction and without the authority of law. While contending that Section 11a has absolutely no application to the case on hand which is not a case of now levy or short levy in the payment of excise duty, it is further contended that recourse to Section 11d of the Act by issuing notices on demand would constitute violation of Article 265 of the constitution of India. In the absence of any specific stipulation in this regard, enabling the respondents to take action of the nature under challenge, the respondents are said to have no authority to issue the show-cause notice. THE respondents also at length have explained and taken great pains to point out the reasons which necessitated them to charge same price rates for both conventional and UT Products when they were manufacturing side by side both products and we also consider it unnecessary to advert to them in great detail in view of our earlier observation that we do not propose to undertake an enquiry into the conflicting claims as to whether there was such collection of excise duty by the petitioners in respect of the UT Products representing a portion of the price to be towards excise duty though the petitioners have availed of the exemption notification and cleared such goods without paying the excise duty. Suffice it to notice that the excess cost of production incurred in manufacturing the UT products and principles governing prudence of business are said to be the basis for charging identical price rates for both products. THE petitioner-company's invoices and Depot vouchers are also sought to be explained with the statement of the petitioners in the whole sale price list and that particularly the remarks in Column No. 6 that the prices are "inclusive of excise duty as applicable".