HIGH COURT OF GUJARAT
Gujarat State Fertilizer Co. Ltd.
versus
Union of India
SPECIAL CIVIL APPLICATION NOS. 1124 OF 2013 & others
Date of Pronouncement – 11.03.2013
JUDGMENT
Akil Kureshi, J.
In this group of petitions, the petitioners have challenged various recovery notices issued by the Customs and Central Excise Department on the basis of the revised guidelines issued by the Central Board of Excise and Customs (CBEC for short) dated 1.1.2013. The petitioners have challenged such circular dated 1.1.13 as also the individual demand notices issued by the respondents. For the purpose of this judgment, basic facts may be noted from Special Civil Application No.1124 of 2013.
2. Petitioner is a company registered under the Companies Act. The petitioner is engaged in the business of manufacturing of fertilizers and other products. For manufacture of such products, the petitioner purchases inputs without payment of duty. Once the manufacturing process is over, the petitioner would be in a position to ascertain the quantity of input used for manufacture of products which are exempt from payment of duty and which are not. There is ongoing dispute between the petitioner and the Department with respect to Cenvat credit availed by the petitioner in the process. The Department contends that such credit was availed by the petitioner in breach of Cenvat Credit Rules. It is the case of the petitioner that such disputes started way back in the year 1998 and went up the Supreme Court and in the case of CCE v. Gujarat State Fertilizers & Chem. Ltd., 2008 (229) ELT 9 (SC) , the issue was settled in favour of the petitioner- assessee. Despite such decision, the Department raised fresh demands against the petitioner on the very same grounds relying on a later decision in the case of CCE v. Gujarat Narmada Fertilizers Co. Ltd. [2009] 22 STT 46 (SC). Ultimately, the Assessing Officer passed the order in original dated 26.11.2010 confirming the duty demand. The petitioner’s appeal came to be rejected by the Tribunal, against which the petitioner has preferred Tax Appeal No.793 of 2012 which is pending before this Court along with stay application, in which the High Court has issued notice to the respondents.
3. At that stage, the respondents issued the impugned notice dated 17.1.13 to the petitioner and conveyed as under :
“With reference to order No.A/1273/WZB/AHD/2012 dated 13.08.2012/29.08.2012 passed by CESTAT, Ahmedabad read with OIO No.2229/DEMAND/COMMR-1/2010 DATED 26.11.2010 for demand of duty amounting to Rs.34,36,60,312/- which includes
(i) duty Rs.343660312/-
(ii) interest on Rs.31362988/- under section 11AB
(iii) interest on Rs.312297324/- under section 11AA
The CESTAT has upheld the OIO passed by the Commissioner confirming the above mentioned demand.
Now a notice is, hereby given to you under section 11 of Central Excise Act, 1944 read with CBEC Circular No.967/01/2013-CX dated 01.01.2013 (Serial No.11) to pay the duty amount along with interest in Government exchequer within seven days from the receipt of this notice, failing which will initiate action against you under section-11 of Central Excise Act, 1944, such as attachment and sale of your excisable goods to recover the govt. dues.”
It is this notice which the petitioner has challenged in this petition along with the CBEC Circular dated 1.1.2013. From the perusal of the notice, it emerges that recovery of the Departmental dues is initiated on the strength of the CBEC circular dated 1.1.2013.
4. In all the petitions recoveries are founded on the CBEC circular dated 1.1.13. The impugned circular dated 1.1.13 reads as under:
“Subject – Recovery of confirmed demand during pendency of stay application regarding
I am directed to bring your attention to the following circulars issued from time to time on the above issue and to state that it has been decided to rescind these circulars with immediate effect.
