1 W.P.4574......../1994 - ( J ) IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO. 4574 OF 1994 1. Shri Tuljabhawani Sahakari Sakhar Karkhana, through its Managing Director, Naldurg, Tq. Tuljapur, Dist. Osmanabad. .... PETITIONER VERSUS 1. The Union of India Through Ministry of Finance, Central Secretariat, New Delhi. 2. The Union of India Through Ministry of Food and Civil Supplies Central Secretariat, New Delhi. 3. Director of Sugar Central Government, New Delhi. 4. Collector Central Excise and Customs, Aurangabad. 5. West Regional Branch 2 W.P.4574......../1994 - ( J ) of the Appellate Tribunal Karimji House, 3rd Floor, Sir P.M. Road, Bombay -1. 6. The State of Maharashtra Through the Secretary to Co-operation and Textile Department, Mantralaya, Bombay – 32. ..... RESPONDENTS -------------------------------------------------------------------------------------------------------- Mr. D.D.Pokharkar, Advocate for the petitioners. Mrs.R.K.Ladda , Additional Govt. Pleader for State. Mrs. Kalpalata Patil Bharaswadkar, Advocate for Union of India. WITH WRIT PETITION NO. 4585 OF 1994 1. Manjare Shetkari Sahakari Sakhar Karkhana, Ltd., Vilas Nagar, Tahsil and District Latur through Shri. Sadashiv Bokhare Age : 38 Yrs., B. Tech. (Food), D.S.C.C. LL.B. Chief Chemist. .... PETITIONER VERSUS 3 W.P.4574......../1994 - ( J ) 1. The Union of India Through Ministry of Finance, Central Secretariat, New Delhi. 2. The Union of India Through Ministry of Food and Civil Supplies Central Secretariat, New Delhi. 3. Director of Sugar Central Government, New Delhi. 4. Collector Central Excise and Customs, Aurangabad. 5. West Regional Branch of the Appellate Tribunal Karimji House, 3rd Floor, Sir P.M. Road, Bombay -1. 6. The State of Maharashtra Through the Secretary to Co-operation and Textile Department, Mantralaya, Bombay – 32. ..... RESPONDENTS -------------------------------------------------------------------------------------------------------- Mr. S.M.Godsay, Advocate for the petitioners. Mrs.R.K.Ladda , Additional Govt. Pleader for State. Mrs. Kalpalata Patil Bharaswadkar, Advocate for Union of India. -------------------------------------------------------------------------------------------------------- 4 W.P.4574......../1994 - ( J ) WITH WRIT PETITION NO. 4576 OF 1994 Jai Jawan Jai Kisan Sahakari Sakhar Karkhana, Ltd., at Lal Bahadur Shastri Nagar, through Raju Kailash Madhave Age : 50 Yrs., B.Sc. A.N.S.I., Chief Chemist, resident of Lal Bahadur Shastri Nagar, Nalegaon, Tq. Chakur, Dist. Latur. .... PETITIONER VERSUS 1. The Union of India Through Ministry of Finance, Central Secretariat, New Delhi. 2. The Union of India Through Ministry of Food and Civil Supplies Central Secretariat, New Delhi. 3. Director of Sugar Central Government, New Delhi. 4. Collector Central Excise and Customs, 5 W.P.4574......../1994 - ( J ) Aurangabad. 5. West Regional Branch of the Appellate Tribunal Karimji House, 3rd Floor, Sir P.M. Road, Bombay -1. 6. The State of Maharashtra Through the Secretary to Co-operation and Textile Department, Mantralaya, Bombay – 32. ..... RESPONDENTS -------------------------------------------------------------------------------------------------------- Mr. S.M.Godsay, Advocate for the petitioners. Mrs.R.K.Ladda , Additional Govt. Pleader for State. Mrs. Kalpalata Patil Bharaswadkar, Advocate for Union of India. WITH WRIT PETITION NO. 4584 OF 1994 Shankar Sahakari Sakhar Karkhana Ltd. Kusum Nagar, Waghalwada, Tq. Bhokar District Nanded, through Dnyandeo T. Kharade Age : 42 Yrs., B.Com. Chief Accountant of the Karkhana resident of Waghalwada, Tq. Bhokar Dist. Nanded. .... PETITIONER 6 W.P.4574......../1994 - ( J ) VERSUS 1. The Union of India Through Ministry of Finance, Central Secretariat, New Delhi. 2. The Union of India Through Ministry of Food and Civil Supplies Central Secretariat, New Delhi. 3. Director of Sugar Central Government, New Delhi. 4. Collector Central Excise and Customs, Aurangabad. 5. West Regional Branch of the Appellate Tribunal Karimji House, 3rd Floor, Sir P.M. Road, Bombay -1. 6. The State of Maharashtra Through the Secretary to Co-operation and Textile Department, Mantralaya, Bombay – 32. ..... RESPONDENTS 7 W.P.4574......../1994 - ( J ) -------------------------------------------------------------------------------------------------------- Mr. S.M.Godsay, Advocate for the petitioners. Mrs.R.K.Ladda , Additional Govt. Pleader for State. Mrs. Kalpalata Patil Bharaswadkar, Advocate for Union of India. WITH WRIT PETITION NO. 4586 OF 1994 Gajanan Sahakari Sakhar Karkhana Ltd. Sonaji Nagar, Waghalwada, Tq. and District Beed, through B.B.Nawle Age : 42 Yrs., B.Sc. (Agril.) Managing Director, resident of Sonaji Nagar, Tq. & Dist. Nanded. .... PETITIONER VERSUS 1. The Union of India Through Ministry of Finance, Central Secretariat, New Delhi. 2. The Union of India Through Ministry of Food and Civil Supplies Central Secretariat, New Delhi. 3. Director of Sugar 8 W.P.4574......../1994 - ( J ) Central Government, New Delhi. 4. Collector Central Excise and Customs, Aurangabad. 5. West Regional Branch of the Appellate Tribunal Karimji House, 3rd Floor, Sir P.M. Road, Bombay -1. 6. The State of Maharashtra Through the Secretary to Co-operation and Textile Department, Mantralaya, Bombay – 32. ..... RESPONDENTS -------------------------------------------------------------------------------------------------------- Mr. S.M.Godsay, Advocate for the petitioners. Mrs.R.K.Ladda , Additional Govt. Pleader for State. Mrs. Kalpalata Patil Bharaswadkar, Advocate for Union of India. -------------------------------------------------------------------------------------------------------- WITH WRIT PETITION NO. 4587 OF 1994 Gangapur Sahakari Sakhar Karkhana Ltd. Tahsil Gangapur, District Aurangabad, through Baburao Eknath Gaikwad 9 W.P.4574......../1994 - ( J ) Age : 35 Yrs., LL.B. M.S.W. Labour Officer, resident of Raghunath Nagar, Tq. Gangapur, Dist. Nanded. .... PETITIONER VERSUS 1. The Union of India Through Ministry of Finance, Central Secretariat, New Delhi. 2. The Union of India Through Ministry of Food and Civil Supplies Central Secretariat, New Delhi. 3. Director of Sugar Central Government, New Delhi. 4. Collector Central Excise and Customs, Aurangabad. 5. West Regional Branch of the Appellate Tribunal Karimji House, 3rd Floor, Sir P.M. Road, Bombay -1. 6. The State of Maharashtra Through the Secretary to Co-operation and Textile 10 W.P.4574......../1994 - ( J ) Department, Mantralaya, Bombay – 32. ..... RESPONDENTS -------------------------------------------------------------------------------------------------------- Mr. S.M.Godsay, Advocate for the petitioners. Mrs.R.K.Ladda , Additional Govt. Pleader for State. Mrs. Kalpalata Patil Bharaswadkar, Advocate for Union of India. -------------------------------------------------------------------------------------------------------- CORAM : B.R. GAVAI AND S.V. GANGAPURWALA, JJ. DATE : 28/07/2010 ORAL JUDGMENT : [ PER - S.V. GANGAPURWALA, J. ] 1. All these petitions involve common question of law, as such are decided by the common Judgment. 2. The petitioners assail order of the Collector confirming the demand U/s 11 ( d ) of the Central Excise Act. 3. The petitioners are Sugar Factories. According to the petitioners, Govt. issued Notification dated 4/11/1987 regarding the incentive scheme, subsequently amended by Notification dated 20/2/1990. According to the petitioners, the said incentive scheme is in respect of additional quota of Sugar which laid down that , though petitioners were charging Rs. 85/- per 11 W.P.4574......../1994 - ( J ) Quintal as excise duty, they were required to pay only Rs. 52/- to the Excise department and retain Rs. 33/- towards payment of the loans. The same was an incentive for the Sugar Factories. 4. The respondents issued show cause notice on the ground that as the petitioners have recovered Rs. 85/- towards the excise duty in respect of the sale of the additional quota of sugar, they have only paid Rs. 52/- to the Excise Department towards the excise duty and have illegally retained Rs. 33/-. The said show cause notice was issued by the Superintendent of Central Excise Department. The petitioners have replied the same. The Collector, Central Excise Department confirmed the said demand. The said order is impugned by the petitioners. Mr. S.M.Godsay, the learned counsel for the petitioners canvassed before us - (i) That the person who had issued show cause notice, had no authority under law to issue the said show cause – cum – demand notice and as such the proceedings stand vitiated. (ii) The demand U/s 11 (a) Rule 9 was withdrawn and as such there can not be any independent proceedings U/s 11 (d) de-hors the provisions of Section 11 (a) of the Excise Act. 12 W.P.4574......../1994 - ( J ) (iii) At the relevant time no procedure was provided for proceedings U/s 11 (d) of the Excise Act and as such no action could have been initiated U/s 11 (d). For the said purpose, relied on the Judgment of the Madras High Court in the case of Eternit Everest Ltd. V/s Union of India reported in 1997 (89) E.L.T. 28 (Mad.). iv) In view of principle of estopple, the Department is not entitled to recover the said amount. 5. Mrs. Kalpalata Patil – Bharaswadkar, the learned counsel for respondent – Union of India has contended that the proceedings have been determined and adjudicated by the Collector, who has the power to adjudicate the same. As such, no prejudice is caused to the petitioners, even if the show cause notice is issued to them. The issue regarding applicability of Section 11 (d) to the dispute of present nature is no longer ‘ res integra ’ in view of the Judgment of the Apex Court in the case of Kisan Sahkari Chini Mills Ltd. V/s Collector of Central Excise, Allahabad reported in 2005 (03) LCX 0001. 6. Regarding the first contention of Mr. Godsay that the Superintendent did not have the jurisdiction to issue show cause notice pursuant to the Circular No. 3/92 dated 14/5/1992 is concerned, the same 13 W.P.4574......../1994 - ( J ) appears to be without any substance. The said Circular prescribes the monitory limits of the authorities to adjudicate. It does not lay down restriction on the powers of the authorities for issuance of show cause notice. More over, the proceedings have been decided by the Collector. It is the admitted position that the Collector had the necessary authority and jurisdiction to decide the said proceedings. It is not disputed that the entire proceedings including the hearing and the adjudication has been done by the Collector. So, no prejudice can be said to have been caused to the petitioners in issuance of show cause notice by the Superintendent. 7. The next contention of the petitioners that as no procedure is laid down U/s 11 (d) at the relevant time, the department could not have taken action U/s 11 (d) is not sustainable. The Judgment of the Madras High Court in case Eternit Everest Ltd. cited supra, may not be of any assistance to the petitioners in view of the Judgment of the Apex Court in the case of Kisan Sahakari Chini Mills Ltd. referred supra. The Apex Court considered the Notification dated 4/11/1987, which is also notification involved in the present petition. In the said case, show cause notice was of the year 1994 and adjudication was also prior to 2000 i.e. prior to the procedure being prescribed for proceedings U/s 11 (D) of Excise Act. Considering the said notification and the provisions of Section 11 (d) of the Central Excise Act, as it then stood the Apex Court in the case of Kisan 14 W.P.4574......../1994 - ( J ) Sahakari Chini Mills Ltd. cited supra has categorically held as under : “ 5. This Section reads as follows : Section 11 D. Duties of Excise collected from the buyer to be deposited with the Central Government - (1) Notwithstanding anything to the contrary contained in any order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder, every person who has collected any amount from the buyer of any goods in any manner as representing duty of excise shall forthwith pay the amount so collected to the credit of the Central Government. (2) The amount paid to the credit of the Central Government under sub-section (1) shall be adjusted against the duty of excise payable by the person on finalisation of assessment and where any surplus is left after such adjustment the amount of such surplus shall either be credited to the Fund or as the case may be refunded to the person who has borne the incidence of such amount in accordance with the provisions of Section 11 B and the relevant date for making and 15 W.P.4574......../1994 - ( J ) application under that Section in such cases shall be the date of the public notice to be issued by the ( Assistant Commissioner of Central Excise ). 6. It appears that after this Section was introduced the Appellants have been asked to deposit amounts collected by them from their customers and the adjudication Order to that effect has been upheld by the Tribunal by its order dated 30th March 1998. 7. On 1st August 1994 they were issued another show cause notice directing them to deposit the amounts collected by them during the period January 1994 to February 1994. The demand of Rs. 4,30,004/- has been confirmed. The Tribunal has dismissed the Appeal of the Appellants by the impugned Order. 8. In our view, the incentives granted to the Appellants did not permit them to collect, more than what they had themselves paid, from their customers. If they collected by way of excise, more than what they had paid, then by virtue of Section 11 D they were bound to deposit that amount with the Government. In our view, there is no infirmity in the impugned judgment. We, therefore, see no 16 W.P.4574......../1994 - ( J ) reason to interfere. The Civil Appeal is dismissed. There will however be no order as to costs ”. 8. In view of the fact that the Apex Court has held that Section 11 (d) was applicable in case wherein the excise amount is not paid though it is collected from the customers, in that case Section 11 (d) would be applicable. We are bound by the said Judgment of the Apex Court and as such we need not consider the Judgment of the Madras High Court. 9. Regarding the principle of promissory estopple, it is a trite law that in case of fiscal matter, the Court would be slow to invoke the principle of promissory estopple. There is nothing on record to suggest that the petitioner commenced the business on the basis of the incentive scheme. The said scheme may at the most be regarded as executive instructions which does not have force of law. The provision of Section 11 (D) of the Excise Act shall prevail over the incentive scheme. 10. In light of the above, as the said issue has been already set at rest in the Judgment of the Apex Court in the case of Kisan Sahakari Chini Mills referred supra, we do not find any merit in the petitions. The petitions are, therefore, dismissed. However, there shall be no order as to costs. 17 W.P.4574......../1994 - ( J ) 11. In view of disposal of Writ Petitions, Civil Applications does not survives and as such disposed off. [ S.V. GANGAPURWALA ] [ B.R. GAVAI ] JUDGE JUDGE knp/WP 4574............94