Fashion Suitings Pvt. Ltd. vs Superintendent of C. Ex. and Service Tax

These four matters involving similar and akin issues have been considered together and are taken up for disposal by this common order. The writ petitions (CWP No. 13098/2013 and CWP No. 13775/2013) came to be filed by the respective assessees in the background of the fact that under the demand notices by the concerned Central Excise Officers, they were called upon to deposit the amount of duty, allegedly due under the Orders-in-Original passed in the respective cases on 26-10-2012 and 23-11-2012.

In essence, the submissions in both the writ petitions had been that the respective appeals alongwith stay applications filed by the petitioners-assessees before CESTAT remained pending and the matters were adjourned on several dates for one reason or another like those of non-availability of Bench or of not reaching but without any fault on the part of the petitioners. It was further submitted that the impugned demand notices had been issued with reference to Circular No. 967/01/2013-CX, dated 1-1-2013 although the said circular had already been declared non est by this Court and the coercive recovery proceedings pursuant to the impugned Circular had been prohibited while directing the respondents to ensure hearing of the appeals and interim applications at the earliest. The decision of a Co-ordinate Bench in DBCWP No. 1891/2013 - Manglam Cement Limited Vs. The Superintendent, Central Excise and Others, was also referred.

After considering the submissions made on behalf of the petitioners-assessees, this Court was forced to express rather its dismay that the respondents, with impunity, were issuing such demand notices with reference to the very same Circular, despite the same having been declared non est. In CWP No. 13775/2013, it was additionally noticed that even a representation made by the petitioner-assessee was rejected with reference to the very same Circular.

This Court took note of the order passed in Manglam Cement Ltd. (supra) wherein it had been held and directed as under:--

In the wake of the above, we hold that the impugned circular dated 1-1-2013 obligating the concerned authorities to initiate recovery-proceedings on the expiry of period as mentioned therein so far as it relates to the situations where appeals with stay applications have been filed, but no stay had been granted and the stay applications had been kept pending for reasons not attributable in any manner whatsoever to the petitioners/assessees and resultantly, no interim relief had been granted is non est. Consequently, no coercive steps for the recovery of the demand vis-�-vis such petitioners would be initiated. Instead, the respondents would ensure that such appeals and interim applications are heard as contemplated by the Act at the earliest and preferably within a period of three weeks herefrom. The petitioners would unfailingly cooperate with the forums to meet the time frame fixed. It is made clear that this Court has not offered its comment on the merits of the appeals and/or interim applications filed and that the concerned forums would take appropriate decisions thereon without in any manner influenced by this determination.

The petitions are thus allowed to the extent as indicated hereinabove. No costs. A copy of this order be placed in all the files.

This Court also took note of the fact that other similar nature writ petitions were disposed of following the said decision in Manglam Cement Ltd. (supra).

In the totality of circumstances, prima facie, the demand notices as issued in these cases were considered to be the show of total disrespect to and defiance of the order passed by this Court when the legal position had been concluded by this Court long back; and, in no uncertain terms, the impugned Circular had been declared non est. Hence, while admitting these petitions and while staying the operation, effect and execution of the impugned demand/notices, separate suo motu contempt petitions were ordered to be registered against the officers concerned. Pursuant to the order so passed in the respective writ petitions, Contempt Petition Nos. 631/2013 and 649/2013 have been registered.

Now, the contemnors arrayed in these contempt petitions have filed reply with the submissions that they had never flouted the order of the Court and while tendered their unconditional apology, it is submitted that the impugned notices came to be issued essentially for the reason that the decision of this Court in Manglam Cement Ltd.''s case (supra) was not in the specific knowledge of the concerned officer as the decision was rendered in respect of a unit situated in a different Commissionerate. It has further been pointed out that now the Commissioner of Central Excise Jaipur-II, in his Letter C. No. V (Law) HQ./Misc./1/2013, dated 9-12-2013, has issued specific directions to all the field formations not to initiate coercive steps for the recovery of the demands where appeals with stay application had been filed but no stay had been granted and the stay application had been kept pending, in terms of the order passed in Manglam Cement Ltd. case (supra).

During the course of the submissions, it has also been pointed out that so far the petitioner of CWP No. 13098/2013 Fashion Suitings Pvt. Ltd. is concerned, specific order has been issued on 3-12-2013 withdrawing the demand notices earlier issued. It has further been pointed out that so far the petitioner of CWP No. 1375/2013 M/s Khushi Enterprises is concerned, no coercive proceedings are sought to be attempted; and that the Office had already written to the Bank concerned to release the account by the letter dated 14-10-2013; and further that the amount of Rs. 1,98,256/- forwarded by SBBJ, Badgaon Branch, Udaipur had not been deposited in the Government Account and the cheque lying with the Department has also been returned.

Taking note of the submissions made on behalf of the respondents/contemnors, we find that albeit late, the respondents have seen reasons and have corrected the faults in their conduct, of having issued the impugned demand notices directly at conflict with the writ issued by this Court. Now the respondents do admit that coercive recovery against the writ-petitioners is not pursued and specific Circular has been issued by the Commissioner of Excise in this regard. In the totality of the circumstances, we are of the view that while accepting the explanation and unconditional apology tendered on behalf of the respondents, these matters deserve to be closed and need not be proceeded further.

To put the record straight, the impugned demand notices in these cases stand quashed. It is, however, made clear that none of the observations made in the orders passed in these matters shall have any bearing on the merit consideration of the respective appeals/stay applications by the Appellate Forum. Subject to the observations foregoing, these writ petitions stands disposed of. The proceedings in the Contempt Petitions are dropped. Notices are discharged.