Case BriefsHigh Courts

Chhattisgarh High Court: Goutam Bhaduri, J., allowed the petition and directed the vehicle to be released on certain conditions. 

The brief facts of this case are that on receiving information, a vehicle was intercepted and from the vehicle illicit liquor to the extent of 34.54 bulk litres was seized. Thus, the case was registered under Section 34(2) of the Chhattisgarh Excise Act, and the liquor as also the vehicle were seized by the police allegedly for transporting illicit liquor, as such proceeding under Section 47-A(3) of the Act was drawn for confiscation of the vehicle. Further, the Collector, who is authorised under Section 47-A(3) started a confiscation proceeding for the vehicle. During such a confiscation proceeding, an application was filed by the petitioner who is the owner of the vehicle to release the vehicle and interim custody of the vehicle were sought for, which was dismissed. Therefore, the instant petition.

Counsel for the petitioner submitted that the confiscation proceeding though having been commenced does not put any bar to release the vehicles into interim custody. He further submitted that till the confiscation proceeding is concluded, the vehicle should have been handed over to the applicant. It is submitted that no necessary useful purpose would be served by keeping the vehicle in the custody except the loss caused to it.

The Court observed that the confiscation proceeding under the Act is governed by Section 47-A(3) of the Act and Section 47-A(2) of the Act regulates the power and procedure to be adopted for confiscation.

The Court further observed that perusal of Section 47-A(2) would show that power has been given to the District Magistrate (Collector) upon production of the article and on having satisfied that offence covered under clause (a) or clause (b) of sub-section (1) of Section 34 has been committed and if liquor is more than 5 bulk litres he may order for confiscation of articles, intoxicants, implements, utensils including the conveyance so seized. The Court records that during pendency of the proceeding he may pass an order of interim nature for custody, disposal etc. of the confiscated intoxicants, articles, implements, conveyance as may appear to be necessary in the facts of this case. Section 47-B of the Act provides for appeal against the order of confiscation. Therefore, it necessarily leads that order of confiscation can only be challenged when it reaches its finality and the statute do not give any space to challenge any other order except the final one. It is a settled proposition of jurisprudence that every wrong will have a remedy. So if the order is found to be wrong then certainly the High Court would have all the power to correct the same.

The Court relied on judgment Sunderbhai Ambalal Desai v. State of Gujarat, (2002) 10 SCC 283 and observed that no reasons have been assigned for rejection in the impugned order and only it is stated that since vehicle was found in transporting illicit liquor as such it is not feasible to hand over the vehicle to the petitioner. So for all practical purposes vehicle is lying at the disposal of authorities or at police station. Thus, if it is kept in the police station it must be occupying space or is prone to cause natural decay and may lose its road worthiness when kept in a stationary position.

The Court thus held “vehicle be released in favour of petitioner by way of interim measure, if the confiscation proceedings have not been concluded till date of production of this order”[Shyam Bihari Yadav v. State of Chhattisgarh, WPCR No. 372 of 2022, decided on 26-04-2022]


For Petitioner: Shri T.K. Jha

For Respondent/State: Shri Ajay Kubrani

Arunima Bose, Editorial Assistant has reported this brief.

Case BriefsTribunals/Commissions/Regulatory Bodies

Customs, Excise and Services Tax Appellate Tribunal (CESTAT): Ashok Jindal (Judicial Member) dismissed the application filed by the Revenue (CCE & ST, Panchkula) for ratification of mistake in a final order by the Tribunal which was noticed by the Applicant. The Tribunal dealt with two issues (a) whether to ratify previous order & (b) to deal with the jurisdiction.

The Department’s contention was that while deciding in the instant matters has wrongly relied upon the case of M/s. Sandvik Asia Ltd. v. CIT Pune as in this case the Apex Court was dealing with Section 214 and 244(1A) of the Income tax Act 1961 whereas nothing has been provided in the Central Excise Act, 1944/ Service Tax Act, 1994 at the relevant time. Authorized Representative while presenting this contention relied on a SC case where the Court had held that even there is mistake of law which however should be apparent on the face of record which does not need long drawn process of reasoning and can be subject matter of rectification of mistake.

For this the Tribunal held that it found no mistake apparent on the face of record after examining the definition of the phrase “error apparent on face of records”. Further, it held that “the applicant is seeking to challenge the merits of the order dated 07-01-2020 to recall the same which is not permissible in law as the same shall amounts to review of its own order.”

The Revenue also filed miscellaneous application for modification in order by this Tribunal to implead the Commissioner, CGST, Rohtak as the respondent in the final order dated 7-1-2020, the appellant had wrongly impleaded the Commissioner, CGST, CE & ST, Panchkula, as the correct respondent should have been the Commissioner of CGST & CE, Rohtak and asked that the order be recalled. The Respondents submitted that the Tribunal doesn’t have the power to hear at this stage- the issue of jurisdiction. It was further submitted that the jurisdiction of the appellant/respondent to the application lies with CGST, Panchkula Commissionerate.

The Tribunal held that “the jurisdiction for the purpose of every claim of refund, every proceeding of appeal, review or reference before this Tribunal shall be dealt under the provision Central Excise law and not by the provision of CGST law.” The jurisdiction of the appellant falls under the jurisdiction of DC Range Panipat and the DC Range, Panipat is under the jurisdiction of the Commissioner of CGST, Panchkula. The Tribunal found no merit in the application and it was subsequently dismissed.[Riba Textiles v. CCE & ST, Panchkula, 2021 SCC OnLine CESTAT 2635, decided on 30-12-2021]

Suchita Shukla, Editorial Assistant has reported this brief.

Present for the Appellant: Shri Dinesh Verma

Present for the Respondent: Shri H.S. Brar

Case BriefsTribunals/Commissions/Regulatory Bodies

Customs, Excise and Services Tax Appellate Tribunal (CESTAT): The Coram of Dilip Gupta (President) and P.V. Subba Rao (Technical Member) partly allowed an appeal which was filed assailing order-in-original passed by the Commissioner of Central Excise, Customs & Service Tax, Cochin.

The appellant manufactured electric cables/ACSR conductors and supplies to M/s Kerala State Electricity Board (KSEB) as per the contract which included a price variation clause. They paid duties at the time of the removal of goods subsequently prices were enhanced retrospectively in view of the increased in the cost of raw material. The differential duty in respect of such goods which were already cleared was paid by issuing supplementary invoices using Cenvat credit.

A show cause notice was issued to the appellant alleging that the supplementary invoices were raised and, therefore, they are relatable to the clearances already made during the previous months.

As per the proviso to Rule 3 (4) of Cenvat Credit Rules, 2004 and proviso to Rule 3 (3) of Cenvat Credit Rules, 2002, the appellant could not have used Cenvat credit, which was taken after the last day of month for payment of duty relating to that month. Therefore, the assessee/ appellant was called upon to pay the differential central excise duty on the supplementary invoices in cash and not using Cenvat credit. The Commission had confirmed the demand of Rs. 89,95,674/- plus interest along with penalty.

The appellant had contended that the supplementary invoices were relatable to the month in which the supplementary invoices were raised and not relatable to the month in which the goods were originally cleared because the duty became payable only when the price was enhanced and not before and that they had correctly availed and utilized Cenvat credit available at the time of raising supplementary invoices in its account and since the duty is relatable to the date of supplementary invoices, no interest was payable. Lastly, he concluded that no penalty was imposable under Rule 25 of Central Excise Rules, 2002 and Rule 15 of Cenvat Credit Rules, 2004 as there was no violation of any Act or Rules and they had paid the duty on such supplementary invoices when they raised.

The Tribunal opined that on the first question as to whether the supplementary invoices relate to the date of original clearance or the date on which the supplementary invoice was raised had been decided in Steel Authority of India Ltd. v. CCE, 2019 (366) E.L.T. 769 (S.C.) and thus interest under Section 11AB needs to be paid by the appellant on the differential amount of duty.

On the second question of whether Cenvat credit can be utilized for payment of duty in view of the proviso to Rule 3 (4) of the Cenvat Credit Rules, 2004, the tribunal found that High Court of Gujarat in Advance Surfactants India Ltd. v. Union of India, 2017 (358) E.L.T. 53 (Guj.) had held that this proviso is ultravires therefore the appellant was correct in utilizing the Cenvat credit for payment of the excise duty.

On the third question of imposition of penalty the Tribunal found that from the facts of the case its clear that assessee has not violated any provision of the Act or the Rules to attract penalty under Rule 25 of the Central Excise Rules, 2002.

The Tribunal partly allowed the appeal and modified the order accordingly.[Traco Cable Co. Ltd. v. Commr. Of CE & Customs, 2021 SCC OnLine CESTAT 2595, decided on 01-11-2021]

Suchita Shukla, Editorial Assistant has reported this brief.

Cabinet DecisionsLegislation Updates

Union Cabinet has approved amendments/extension/repeal in the following Acts and Regulations dealing with Goods and Services Tax (GST), Value Added Tax (VAT) and State Excise, and for designation of Daman as Headquarter:

  1. the Central Goods and Service Tax Act, 2017 (No.12 of 2017) to be amended as Central Goods and Service Tax (Amendments) Regulation, 2020;
  2. the Union Territory Goods and Service Tax Act, 2017 (No. 14 of 2017) to be amended as Union Territory Goods and Service Tax (Amendments) Regulation, 2020;
  3. the Dadra and Nagar Haveli Value Added Tax Regulation, 2005 (No.2 of 2005) to be amended as Dadra and Nagar Haveli and Daman and Diu Value Added Tax (Amendments) Regulation, 2020;
  4. the Daman and Diu Value Added Tax Regulation, 2005 (No.1 of 2005) to be repealed as Daman and Diu Value Added Tax (Repeal) Regulation, 2020;
  5. the Goa, Daman and Diu Excise Duty Act, 1964 (No.5 of 1964) to be amended as Dadra and Nagar Haveli and Daman and Diu Excise Duty (Amendment) Regulation, 2020;
  6. the Dadra and Nagar Haveli Excise Duty Regulation, 2012 (No.1 of 2012) to be repealed as Dadra and Nagar Haveli Excise Duty (Repeal) Regulation, 2020;
  7. Designation of Daman as Headquarter of Union Territory of Dadra and Nagar Haveli and Daman and Diu.

These amendments will lead to “Minimum Government, Maximum Governance” by way of having common taxation authorities: better delivery of services to the citizens by reducing duplication of work and improving administrative efficiency, will help in bringing more uniformity in Laws relating to GST, VAT and STATE EXCISE and it will also help to avoid any legal complications in the levy and collection of GST Tax, VAT, State Excise, including recovery of arrears Moreover, the said amendments not only bring uniformity in taxation laws but also strengthen the system of laws.

The U.T. Administration of Dadra & Nagar Haveli and Daman & Diu have taken a big step to realize the vision of “Minimum Government, Maximum Governance” for the people of the two UTs, besides saving to the government exchequer and ensuring uniformity, stability and consistency in day to day functioning of taxation authorities.

This is achieved by making Amendments/extension/repeal in Acts dealing with Goods and Services Tax (GST), Value Added Tax (VAT) and Excise, and by designation of Daman as Headquarters of UT of Dadra and Nagar Haveli and Daman and Diu in view of merger of Dadra and Nagar Haveli and Daman and Diu on appointed date of 26.01.2020.

Ministry of Home Affairs

[Source: PIB]

[Press Release dt. 22-01-2020]