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Judgment
D.Y. Chandrachud, J.—This judgment would govern two petitions, one instituted by Ispat Industries Limited (Ispat) and the second, by the Union of India, through the Commissioner of Central Excise, Raigad. Both the petitions have been heard together.
The petition instituted by Ispat questions the validity of an order passed on 30 November 2004 by the third respondent, the Deputy Commissioner of Central Excise to the extent that it holds that a refund of education cess of Rs. 5.52 lakhs is inadmissible to the company and a show cause notice dated 22 December 2009. A mandamus is sought directing the Deputy Commissioner of Central Excise to sanction the rebate claim of Ispat aggregating to Rs. 10.40 lakhs together with interest.
The Union of India has questioned in its petition the legality of an order passed on 11 September 2009 by the Joint Secretary to the Government of India holding that Ispat is entitled to a rebate of education cess paid on exported goods.
The facts in so far as they are relevant to the controversy in this case are thus : Ispat claims to have exported HR coils of steel on the payment of applicable excise duty including education cess between 9 July 2004 and 6 September 2004. On 8 September 2004, Ispat lodged a rebate claim for exports made between 10 August 2004 and 24 August 2004 in the amount of Rs. 2.81 crores including excise duty and education cess. On 30 November 2004, the Deputy Commissioner of Central Excise allowed the claim, to the extent of rebate of basic excise duty in the amount of Rs. 1.82 crores but declined to grant a rebate on the education cess paid in the amount of Rs. 5.52 lakhs. The Assessing Authority held that the duty paid by way of education cess was admissible for a rebate only with effect from 6 September 2004 under Notification No. 19/2004NT and since the goods were exported by Ispat prior to that date, rebate on education cess cannot be allowed. Apart from the claim for rebate filed on 8 September 2004, Ispat had filed four other claims between 8 September 2004 and 11 October 2004. The remaining four claims were similarly allowed by the Assessing Authority to the extent of a rebate of basic excise duty but the claim for rebate in respect of education cess was disallowed. In pursuance of the orders passed by the Assessing Authority, Ispat collected cheques representing the rebate granted on the basic excise duty.
The order passed by the Deputy Commissioner of Central Excise on 30 November 2004 attained finality and no appeal was filed by Ispat against that order. Similarly, no appeals were filed in respect of the other four claims. On 20 December 2005, an application was filed by Ispat before the Deputy Commissioner, Central Excise seeking refund of education cess in respect of the very same transactions. In the application, there was an averment to the effect that the rebate claims were sanctioned for an amount of basic excise duty only and that the amount of education cess involved was retained by the Assessing Authority for the reason that education cess is not a part of excise duty. Relying on an order passed by the Commissioner (Appeals) in the case of some other assessee, Ispat moved the aforesaid application on 20 December 2005. The application was rejected by the Assistant Commissioner on 28 December 2006 and the rejection was affirmed by the Commissioner (Appeals) on 24 July 2007. Ispat thereupon moved a revision before the Government of India which was allowed by the revisional authority on 11 September 2009.
The Union of India issued a notice to show cause on 22 December 2009 calling upon Ispat to explain as to why the claim for refund should not be disallowed inter alia on the ground that Ispat had not filed any appeal before the Commissioner (Appeals) against the orders sanctioning only the component of basic excise duty and though the orders, it was stated, had attained finality. The fresh claim filed by Ispat on 20 December 2005 was beyond the period of limitation specified u/s 11B of the Central Excise Act and was barred by limitation.
Ispat instituted the petition under Article 226, as noted earlier, in order to seek a writ of mandamus directing the respondents to sanction its claim of rebate in respect of education cess. Ispat''s case in the submissions before the Court is that it seeks enforcement of the order passed by the revisional authority on 11 September 2009. Ispat also challenges the order passed on 30 November 2004 by the Assessing Authority declining to grant a claim of rebate in respect of the education cess and the notice to show cause dated 20 December 2009.
In the petition filed by Ispat, an affidavit has been filed by the Deputy Commissioner of Central Excise, in which it has been stated that the rebate claims filed by Ispat were allowed on 30 November 2004 only to the extent of a refund of basic excise duty but the claim for refund of education cess was specifically rejected. It has been averred that Ispat did not challenge the order disallowing the claim of refund in respect of the payment of education cess but instead, chose to file a fresh application dated 20 December 2005. The affidavit records that as a matter of fact the other four applications which were made in the year 2004 by Ispat had also been rejected and the orders passed by the Assessing Authority had not been challenged. The affidavit inter alia adverts to the inaction / laches on the part of Ispat in not filing appeals before the Commissioner (Appeals) against the rejection of its claims and it has been submitted that in order to circumvent this, a petition has now been filed belatedly before this Court seeking to question the legality of the order passed on 30 November 2004.
Essentially, it has been conceded before the Court that the outcome of the petition which has been filed by Ispat would depend upon the view which is taken in the petition filed by the Union of India for challenging the order of the revisional authority directing grant of a rebate in respect of payment of education cess. Ispat in its oral submissions has urged two submissions through learned Counsel, these being : (i) The order in original passed on 30 November 2004 was without furnishing an opportunity of being heard and is, therefore, a nullity; and (ii) Even assuming that the order passed by the Government of India as a revisional authority on 11 September 2009 is erroneous, the jurisdiction of the Court while issuing a writ of mandamus for the enforcement of the order would have to be exercised independent of any consideration of the correctness of the order.
The facts as they have emerged before the Court would establish that Ispat had moved an application for a rebate in respect of the component both of the basic excise duty and the education cess initially on 8 September 2004. The claim for rebate to the extent of education cess was rejected on 30 November 2004. The claim for rebate was allowed only in respect of the basic excise duty. Ispat had moved four other applications in which the same view was taken by the Assessing Authority and, as a matter of fact, cheques were received by Ispat representing the quantum of rebate only in respect of the component of basic excise duty. Ispat chose not to challenge the order passed by the Deputy Commissioner of Central Excise on 30 November 2004 rejecting the claim of rebate in respect of education cess. No appeal was filed against that order. Ispat received and accepted the cheques in the other claims and did not challenge the denial of the rebate qua education cess. On 20 December 2005, over a year after passing of the first order an application was moved before the Assessing Authority seeking a rebate in respect of education cess. The application filed before the Deputy Commissioner of Central Excise suppressed the order dated 30 November 2004 and did not disclose the fact that the application for rebate in respect of education cess had been specifically rejected. All that the application discloses was that the rebate applications were allowed only for basic excise duty ''and the amount of education cess involved was retained by you for the reason that the education cess is not a part of the excise duty''. Instead reliance was placed on an order passed by the Commissioner (Appeals) in the case of some other assessee. The consequence of the failure of Ispat to make a disclosure of the order dated 30 November 2004, while preferring its application dated 20 December 2005 is that all authorities who dealt with that claim proceeded on the basis that the application was being filed for the first time. There is undoubtedly also a lapse on the part of the authorities in doing so. The orders of the Assessing Authority dated 28 December 2006, of the Commissioner (Appeals) dated 24 June 2007 and of the revisional authority dated 11 September 2009 are all silent on the admitted position that the application filed by Ispat had originally been rejected on 30 November 2004. As a matter of fact, if the applications were to be filed for the first time on 20 December 2005 they would have barred by the limitation of one year prescribed in Section 11B.
The jurisdiction of this Court has been invoked by the Union of India which seeks an order of the Court to correct what would be a manifest failure of justice originating in an abuse of process. A person who seeks a refund is duty bound to make a full and candid disclosure of all material facts which would have bearing on the maintainability of the application. The circumstance that the application for refund of education cess had been dismissed on 30 November 2004 and the subsequent orders governing the four other claims was a material circumstance which would have a bearing on the maintainability of the application filed on 20 December 2005. Ispat''s failure to make a candid disclosure in that regard constitutes a serious abuse of the process. As we have noted, all the authorities which acted on the application dated 20 December 2005 had proceeded on the basis that they were the first and only applications. The order passed by the revisional authority is evidently in error for the reason that the application by Ispat on 20 December 2005 was not maintainable in view of the rejection of its earlier application on 30 November 2004 and by the subsequent orders rejecting similar applications.
It has been urged on behalf of Ispat that the rejection of the application on 30 November 2004 was without hearing it and that the order being a nullity can be challenged at any stage. Reliance was sought to be placed on the judgment of a Constitution bench of the Supreme Court in State of U.P. v. Mohammad Nooh AIR 1958 SC 86, in which the Supreme Court held that the power of the Court to issue a writ of certiorari can be exercised despite the availability of an alternate remedy. Where a court or tribunal, which is called upon to exercise judicial or quasi judicial functions discards all rules of natural justice and arrives at a decision contrary to all accepted principles of justice, the Supreme Court held that the court can and must interfere. This principle has been applied in the judgments of a Division Bench of this Court in Wasp Pump Private Vs. Union of India (UOI) and Deputy Commissioner (Adj.) of Central Excise, Thane-II Division, and Hero Cycles Limited v. Union of India 2009 (24) E.L.T. 490 (Bom). Now, there can be no dispute about the principle that the requirement that a petitioner must exhaust alternate remedies is a self imposed restraint, which courts observe in the exercise of the jurisdiction under Article 226, but this bar is by no means absolute or inflexible. The powers of the Court under Article 226 to safeguard against a miscarriage of justice cannot be stratified by inflexible norms. Equally, as the Constitution bench of the Supreme Court held in A.V. Venkateswaran, Collector of Customs, Bombay Vs. Ramchand Sobhraj Wadhwani and Another, , if a petitioner has disabled himself from availing himself of a statutory remedy by his own fault in not doing so within the prescribed time, he cannot certainly be permitted to urge that as a ground for the Court dealing with his petition under Article 226 to exercise its discretion in his favour (at Para 11).
In the present present, the petitioner (i) did not contest the correctness of the determination made by the Deputy Commissioner of Central Excise on 30 November 2004 and thereafter rejecting the claim for rebate on the payment of education cess; (ii) Moved an application on 20 December 2005 despite the rejection made on the earlier occasion on the same issue; and (iii) Suppressed the material circumstance of the rejection of the earlier application. In these circumstances, this Court in the exercise of its jurisdiction under Article 226 would be duty bound to correct what would otherwise have been a manifest failure of justice originating in an abuse of the process of law by Ispat. The challenge by Ispat to the order dated 30 November 2004, addressed before the Court in a petition filed on 6 March 2010, suffers from unexplained delay. Apart from the reasons, which we have already indicated, we do not consider it appropriate to exercise the writ jurisdiction under Article 226 in favour of a petitioner, who is guilty of an abuse of process and of unexplained delay.
For the aforesaid reasons, writ petition No. 3674 of 2010 filed by the Union of India would have to be allowed and is accordingly allowed by setting aside the order dated 11 September 2009 passed by the Joint Secretary to the Government of India. Writ Petition No. 1953 of 2010 filed by Ispat shall stand dismissed. There shall be no order as to costs.