1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORGINAL CIVIL JURISDICTION WRIT PETITION NO. 1477 OF 2009 Hindustan Petroleum Corporation Ltd. ... Appellant. V/s. Union of India and another. ... Respondents. M.H.Patil for the appellant. R.Ashokan for the respondent. CORAM : V.C.DAGA AND J.P.DEVADHAR, JJ. DATED : 2nd September 2009. P.C. : Heard learned counsel for the petitioner and learned counsel for the respondents. Perused petition. 2. This petition is directed against the order dated 21st April, 2009 (Exh. A ) passed by the Customs Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai ( Tribunal for short) directing the petitioner to pre-deposit a sum of Rs.3,75,00,000/- (three crore seventy five lakh) towards duty within eight weeks from the date of the order with direction to report compliance. Subject to compliance of the said order within stipulated period, pre-deposit of balance amount of duty, interest and penalty was to stand dispensed with and stay was to operate pending disposal of the appeal. Failure to comply with the aforesaid direction, stay was to stand, automatically, vacated and the appeal was to stand dismissed without further notice of the petitioner. 2 The Facts : 3. The factual matrix reveals that on 22nd April, 2005 M/s.RCF published global tender notification in Times of India and Indian Express both dated 22nd April, 2005 and other local newspapers. M/s.RCF issued tender form to the petitioner mentioning therein `excise duty as applicable to be shown clearly and separately in the tender. Form Proforma-A attached to the tender at Sr.No.E5 showed excise duty at nil rate for the goods for the purpose of manufacture of fertilizer and goods supplied against International Competitive Bidding against Sr.No.301 of General Exemption No.52 (Notification No.6/2002-CE dated 1st March, 2002 as amended) provided condition No.64 is fulfilled. 4. The petitioner, on 10th June, 2005, vide its letter F.No.MR-DS/APP/I & C dated 10th June, 2005, submitted a revised bid for supply of LAN against letter dated 8th June, 2005, mentioning excise duty as nil for goods for manufacture of fertilizer and sup0ply against International competitive Bidding against Sr.No.301 of General Exemption No.52 (Notification No.6/2002-CE dated 1st March, 2002 as amended) provided condition No.64 is fulfilled. M/s.RCF vide F.No.Thal/PUR/LAN/2006 dated 20th August, 2005 placed purchase order on M/s.HPCL for the period 16th July, 2005 to 15th July, 2006 claiming excise and/or customs duty at `nil rate. 5. M/s.RCF vide letter No.Thal/PUR/NAPHTHA/06-07 dated 15th July, 2006 extended purchase order dated 20th August, 2005 given to the petitioner from 16th July, 2006 to 15th July, 2007. 3 6. The Jurisdictional Assistant Commissioner of M/s.RCF, on 1st April, 2005, informed that no procedure is required to be followed for procurement of duty free Naphtha from the petitioners. 7. A notice dated 1st December, 2006 was issued to M/s.RCF demanding duty along with interest and penalty of Rs.7.l51 crore of that much quantity of Naphtha not used for manufacture of fertilizers. Similar notice was also issued to the petitioner on 7th December, 2006 proposing to demand duty of Rs.7.51 crore with same allegations. In nutshell, two separate show-cause notices demanding very same duty were issued to recipient i.e. M/s.RCF and sender i.e. petitioner. 8. The petitioner resisted show cause notice vide its reply dated 10th October, 2007. The Commissioner, Mumbai-II, on 11th December, 2007, confirmed the demand upon the petitioner and on 12th December, 2007, through separate order, show cause notice issued to M/s.RCF was dropped. 9. The Committee on Disputes, on 23rd September, 2008, permitted the petitioners to pursue the appeal and expressed the view that the department may examine whether M/s.RCF should also be impleaded as a party in these cases for their alleged misuse of the product or take action against M/s.RCF separately as deemed fit under the circumstances of the case. The 10. The Tribunal by an interim order dated 21st April, 2009, directed petitioner to pre-deposit of Rs. 3.75 crore. The petitioner not satisfied with the order 4 has filed this petition under Article 226 of the Constitution of India to challenge the said order of the Tribunal dated 21st April, 2009. Submissions : 11. Learned counsel appearing for the petitioner urged that the Tribunal has erred in directing to pre- deposit a sum of Rs.3.75 crore without taking into consideration the various submission made before it and without going into the merits of the case in its proper perspective. He further submits that the petitioner had complied with all the stipulations contained in notification No.6/2002-CE (sr.No.301) and notification No.6/2006-CE (sr.No.91) inasmuch as supply of Naphtha was against International Competitive Bidding and also was exempt when imported into India under notification No. 21/2002-Cus (sr.No.76). According to him, once all the stipulations contained in the notifications referred to hereinabove have been satisfied at the time of clearance, the demand against the petitioner does not at all sustain, since there was no requirement on the part of the petitioners to submit evidence of utilization by M/s.RCF for the manufacture of fertilizers. In his submission, duty liability can only be upon M/s.RCF i.e. recipient of Naphtha for manufacture of fertilizers. He also raised certain more contentions in support of his submission and pressed into service a legal principle that law does not compel a man to do that which he cannot possibly do. He relied upon various documents and also placed reliance on the judgment of this Court in the case of Indian Seamless Steel and Alloys Ltd. v. Union of India, 2003 (156) ELT 945 (Bom), He also pressed into service the provision of Chapter 14 of the CBEC s 5 Excise Manual (part 6) containing supplementary instructions with latest clarifications, instructions and procedures and further pressed into service sub-clause (f) of clause 2.1 thereof to urge that as per the policy of the Central Government, if the undertaking is owned and managed directly through any Ministry, Directorate/Directorates by the Central Government or State Government, it is exempt from furnishing any security or surety or a bond. He further submits that the petitioner being a Central Government undertaking, it was not necessary for the Tribunal to direct pre-deposit of Rs.3.75 crore. 12. Per contra, learned counsel for the respondent Mr.Ashokan while reacting has virtually conceded the fact that the petitioner is Central Government undertaking and the directions issued by the Central Board of Excise and Customs are binding on the Revenue. Though he tried to justify the impugned order, however, he could not take his submission to the logical end and, virtually, conceded to the directions issued by the Board pressed into service by the learned counsel for the petitioner. Consideration : 13. Having heard both parties, having perused the petition and including impugned order, it is not necessary to go into the larger question sought to be raised in the petition with respect to the changeability of duty since it would amount to pre-judging the issue. Suffice it to say that the instructions issued by the Board contained in the Excise Manual pressed into service by the petitioner ought to to have been given due 6 consideration by the Tribunal when the same was brought to its notice. However, we do not find any reference to the said aspect of the matter in the impugned order. It is not in dispute that the petitioner is a Government of India undertaking. Solvency is beyond doubt. The question sought to be raised in appeal, no doubt, needs serious consideration by the Tribunal, however, one cannot say that no prima facie; case was made out by the petitioner for complete waiver of the pre-deposit. As a matter of fact, as per the instructions of the Board, petitioner is exempted from furnishing any security. 14. In the above facts and circumstances of the case, ends of justice would be met by directing the petitioner to execute a general bond with the jurisdictional Assistant Commissioner/ Deputy Commissioner. 15. In the result, impugned order stands modified and the direction to pre-deposit Rs.3.75 crore as security deposit stands substituted with that of general bond for the full amount of duty. Petitioner to execute the bond within a period of four weeks from the date of receipt of copy of this order by the Tribunal. Petition is partly allowed in terms of this order. Accordingly, rule is made absolute with no order as to costs. (J.P.DEVADHAR, J.) (V.C.DAGA, J.)