High Court · 2007

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED :04.06.2007 C O R A M :THE HONOURABLE MR.A.P.SHAH, THE CHIEF JUSTICEANDTHE HONOURABLE MR.JUSTICE P.JYOTHIMANIW.A.No. 482 of 2007and M.P.Nos.1 & 2 of 2007M/s. Godrej Sara Lee Ltd.,rep. By its General Manager-LegalMr. B.S. VirkarR.S.No.131/1-4 Cuddalore Main roadKattukuppam, Manapet RoadPondicherry 607 402.... Appellants/Petitioner-vs-1.The Commissioner of Central ExciseGoubert AvenueBeach RoadPondicherry 605 001.2.The Joint Commissioner of Central ExciseOffice of the Commissioner of Central ExciseGoubert Avenue, Beach RoadPondicherry 605 001.3.Deputy Commissioner of Central Excise(Drawbacks) Office of the Commissioner ofCentral Excise, Goubert AvenueBeach Road, Pondicherry 605 001.4.Assistant Commissioner of Customs (Drawback) Custom House 60 Rajaji Salai Chennai 600 001.... Respondents/RespondentsWrit Appeal filed under Clause 15 of Letters Patent against theorder of the learned single Judge dated made in W.P.No.3735 of 2007dated 12.02.2007 filed under Article 226 of the Constitution of India toissue a Writ of Certiorari call for the records pertaining to theimpugned order No.C.No.VIII/20/192/05 Hqrs.Dbk. Unit dated 29.12.2006and quash the same. https://hcservices.ecourts.gov.in/hcservices/ For appellant :: Mr. Arvind P. Datar,Senior Counsel for Mr. M. BalagopalFor respondents :: Mr. V.T. Gopalan Addl. Solicitor General assisted by Mr. P. Wilson, Asst. Solicitor General JUDGMENT( DELIVERED BY P.JYOTHIMANI,J.)The second respondent, Joint Commissioner of Central Excise,Pondicherry, has passed an order on 29.12.2006, that the Diffuser whichhas been fixed in the mosquito repellant machines manufactured by thepetitioner is not eligible for availing drawback claim as per Section 75of the Customs Act, 1962. It is seen that before passing the saidimpugned order, the 4th respondent, Assistant Commissioner of Customs(Drawback), has issued a notice dated 26.12.2006, captioned as "demandnotice", in which, even though the 4th respondent has called for anyrepresentation from the petitioner, giving opportunity for personalhearing, it is stated in the said demand notice as follows:"(2) It was further informed that on re-examinationof the fixation of the Brand rate with reference todefinition of Drawback which specifies thatimported/excisable material has to be used in themanufacture of exported goods whereas in this casethe Mosquito Repellent Machine which was importedwas exported as it is by the exporter. Thereforethe drawback amount sanctioned in terms of BrandRate letter becomes recoverable & the details ofdrawback sanctioned are as given below:......."2. The grievance of the petitioner is that they are themanufacturers of mosquito repellants and as far as the diffuser isconcerned, it forms part of the entire mosquito repellant, and the sameis imported and after fitting the same as machine it is marketed. As acomplete set it is exhibited and therefore there was no question ofseparating diffuser for the purpose of denying the drawback claim as perthe Customs and Central Excise Duties Drawback Rules, 1995. 3. The learned senior counsel Mr. Arvind P.Datar, would submitthat in any event by the notice captioned as demand notice dated26.12.2006, which preceded the impugned order, even though it is in thenature of show cause notice, the respondents have made up their mindbefore enquiry and without giving opportunity to the petitioner,especially in the circumstances that in the said notice the petitioneris permitted to make representation and also a personal hearing would beavailed. He would also submit that the impugned order denies theclaim of the petitioner under Section 75 of the Customs Act, even https://hcservices.ecourts.gov.in/hcservices/ before the petitioner could exercise its option to give representationand also appear for personal hearing, and it amounts to prejudging theissue. In these circumstances, he would contend that the order of thelearned single Judge stating that by virtue of the notice dated26.12.2006, the petitioner can always give explanation and the impugnedorder dated 29.12.2006 of the second respondent is only a piece ofinformation, is not proper. 4. On the other hand, Mr. V.T. Gopalan, learned AdditionalSolicitor General would contend that inasmuch as the learned singleJudge has held that notice dated 26.12.2006 is only a notice, it isalways open to the petitioner to give explanation. However, he wouldfairly submit that the said notice dated 26.12.2006, which is captionedas demand notice ought to have been issued as a show cause notice andthe expression given in the notice is only tentative in nature, and suchexpression will not be given effect to. As far as the impugned orderdated 29.12.2006 is concerned, the learned Additional Solicitor Generalwould submit that the learned single Judge himself while holding thatthe impugned order is only a piece of information, has held in paragraph7 of the order that the impugned order dated 29.12.2006, need not begiven effect to till order is passed in the proceedings initiated bymeans of the show cause notice dated 26.12.2006.5. We have heard the learned senior counsel for the appellant aswell as respondents and perused the records, including the order of thelearned single judge.6. Inasmuch as it is fairly conceded by the learned AdditionalSolicitor General that the notice dated 26.12.2006 should be treatedonly as a show cause notice, we make it clear that pursuant to the saidshow cause notice, the petitioner shall be entitled to submitexplanation and also participate in the personal enquiry and it is forthe 4th respondent to give adequate opportunity to the petitioner andpass appropriate orders in accordance with law.7. Even though it is true that the learned Judge has directedthat the impugned order dated 29.12.2006, is to be kept in abeyance tillthe proceedings initiated by the 4th respondent by notice dated26.12.2006 is completed, we are of the view that the said order cannotstand the test of law, since it would amount to prejudging the issue.In view of the same, the writ appeal is disposed of confirming theorder of the learned single Judge made in W.P.No.3735 of 2007 dated12.02.2007, with the modification that,"(i) the notice issued by the 4th respondent dated26.12.2006, under caption demand notice shall betreated as show cause notice to the petitioner and thepetitioner shall be entitled to submit its detailedexplanation within a period of two weeks from the dateof receipt of a copy of the order and it is also opento the petitioner to avail personal hearing, in whichevent, the 4th respondent shall fix the date for https://hcservices.ecourts.gov.in/hcservices/ personal hearing and proceed with enquiry and passorders in accordance with law;(ii) the impugned order of the second respondent dated29.12.2006, stands set aside.The writ appeal is disposed of in the above terms. No costs.Consequently, connected miscellaneous petitions are closed.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarkhTo1.The Commissioner of Central ExciseGoubert AvenueBeach RoadPondicherry 605 001.2.The Joint Commissioner of Central ExciseOffice of the Commissioner of Central ExciseGoubert AvenueBeach RoadPondicherry 605 001.3.Deputy Commissioner of Central Excise(Drawbacks) Office of the Commissioner ofCentral Excise,Goubert AvenueBeach RoadPondicherry 605 001.4.Assistant Commissioner of Customs (Drawback) Custom House 60 Rajaji Salai Chennai 600 001.1 cc To Mr.P.Wilson, Assistant Solicitor General of India, SR.31561. W.A.No.482 of 2007TEJ(CO)RVL 09.06.2007