W.P. 20169 (W) of 2014. Case: RSI Private Limited Vs Union of India and Ors.. High Court of Calcutta (India)
| Case Number | W.P. 20169 (W) of 2014 |
| Counsel | For Appellant: Pranab Kumar Datta and Shovendu Banerjee, Adv.and For Respondents: S.B. Saraf and K.K. Maiti, Advs. |
| Judges | Harish Tandon, J. |
| Issue | Central Excise Act, 1944 - Section 35F, 35G; Constitution Of India - Articles 141, 226 227, 39; Representation Of The People Act, 1951 - Section 100(1)(d)(iii), 83(1); Sick Industrial Companies (special Provisions) Act, 1985 - Sections 16, 22, 22(1) |
| Citation | 2015 (319) ELT 650 (Cal) |
| Judgement Date | August 12, 2014 |
| Court | High Court of Calcutta (India) |
Judgment:
Harish Tandon, J.
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The petitioner has assailed the order dated 8th May, 2014 passed by the Customs, Excise & Service Tax Appellate Tribunal (in short "CESTAT"), Kolkata disposing of an application for stay filed in connection with the Customs Appeal No. C/A 187-193/2010 directing the petitioner to deposit a sum of Rs. 1.14 crores as condition precedent for maintaining the appeal.
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Challenging the order of the adjudicating officer the said appeal came to be filed at the instance of the petitioner raising various issues including the issue that the petitioner's company has been referred to Board for Industrial and Financial Reconstruction (in short "BIFR") and, therefore, the action for recovery of the amount is impermissible.
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By an earlier order dated 13th November, 2013 passed by the CESTAT the same amount was directed to be deposited by the petitioner, which was assailed before this Court in W.P. 939 (W) of 2014. The attention of this Court was drawn to a judgement of the Apex Court in case of Sagarika Acoustronics Private Limited v. Union of India reported in 2010 (256) ELT A61 (SC) for the proposition that once the company has been referred to BIFR, the Tribunal while considering an application for stay should record its findings on the net-worth of the company. After noticing the earlier judgement rendered by the Supreme Court in case of Metal Box India Limited v. Collector of Central Excise, Mumbai reported in 2003 (155) ELT 13 (SC), wherein it is held that Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (in short "SICA") does not put a fetter in taking an action for recovery of the customs duties or excise duties against the company, who has gone before the BIFR.
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Both the aforesaid judgements were noticed by this Court at the time of disposal of the writ petition, being W.P. 939 (W) of 2014, and the order was set aside with specific direction upon the CESTAT to consider the same afresh within three weeks from the date of the communication of the order. The impugned order in this writ petition is the result of the said direction, which according to the petitioner, is more or less replica of the earlier order. In the impugned order the Tribunal maintains the quantum determined in the earlier order to be just and proper in the attending facts and circumstances without adverting to any observations made on the net-worth of the company.
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As per the petitioner the BIFR entered into a reference and have declared the petitioner as a sick company and, therefore, directing the payment of an amount would result into an undue hardship and is contrary to the ratio laid down by the Supreme Court in case of Sagarika Acoustronics Pvt. Ltd. (supra).
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According to the respondents, the CESTAT have considered the net-worth of the company and the impugned order cannot be said to be a replica of the earlier order.
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The respective counsel have addressed more on the point of law than on the merit, as according to the petitioner the impugned order was passed in clear departure from the ratio laid down in Sagarika Acoustronics Pvt. Ltd. (supra), whereas the respondents did not agree with the aforesaid submissions, as according to them there was no ratio laid down in the said judgement and the Tribunal has proceeded on the proposition of law, which is operating in the field and does not require any interference in Writ jurisdiction. In addition to the same the respondents took a preliminary objection as to the maintainability of the writ petition because of the alternative efficacious remedy by way of an appeal provided under Section 35G of the Central Excise Act and in support thereof a reliance was placed upon a Division Bench judgement of Andhra Pradesh High Court delivered in case of Patel Engineering Ltd. v. Commr. of C. Ex., Cus. & S. T., Hyderabad-II reported in 2014 (305) ELT 234 (AP).
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Let me first address the issue whether the Tribunal has in true spirit and purport showed its adherence to the directions passed by this Court in an earlier writ petition or has proceeded whimsically, arbitrarily and in clear defiance of the order.
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If one perused and read the order dated 21st January, 2014 passed in W.P. 939 (W) of 2014, there is no ambiguity in arriving at the conclusion that the Court accepted the proposition of law laid down in Sagarika Acoustronics Pvt. Ltd. (supra), even after noticing the earlier judgement rendered in case of Metal Box India Limited (supra) directed the application to be heard afresh. The Tribunal relied upon the earlier order passed in case of Nicco Corporation Ltd. & Ors. v. CCE, Kolkata-(III) wherein the judgement rendered in case of Sagarika Acoustronics Pvt. Ltd. (supra) was quoted in full and observed that the said judgement was rendered in the facts and circumstances involved therein and has no binding efficacy. What is tried to state is that there is no ratio laid down by the Supreme Court in case of Sagarika Acoustronics Pvt. Ltd. (supra) and, therefore, does not bind either the Co-ordinate Bench, High Courts or the Tribunals. The Tribunal considered various judgements rendered on the issue of ratio decidendi, but misconstrued the same while arriving at its own conclusion. It would be appropriate to quote the excerpts from the judgement, which deals the said aspect for addressing the issue raised before this Court in this writ petition, which runs with these words:
**** What is 'ratio decidendi' has been explained by the Hon'ble Supreme Court in the case of Dalbir Singh v. State of Punjab AIR 1979 SC 1384 at pp 1390 as:
'...According to the well settled theory of precedents every decision contains three basic ingredients:
(i) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct or perceptible facts;
(ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and
(iii) judgment based on the combined effect of (i) and (ii) above.
For the purpose of the parties, themselves and their privies, Ingredient No. (iii) is the material element in the decision for it determines finally their rights and liabilities in relation to the subject matter of the action. It is the judgment that estops the parties from reopening the dispute. However, for the purposes of the doctrine of precedents, Ingredient No. (ii) is the vital element in the decision. This indeed is the ratio decidendi. (5) It is not everything said by a Judge when giving judgment that constitutes a precedent.'
14. Further a Five Member Bench of the Hon'ble Court Supreme Court in the case of Krishena Kumar v. Union of India AIR 1990 SC 1782 at pp 1793 observed as:
'18, The doctrine of precedent, that is being bound by a previous decision is limited to the decision itself and as to what is necessarily involved in it. It does not mean that this Court is bound by the various reasons given in support of it, especially when they contain ''propositions wider than the case itself required.' This was what Lord Selborne said in Caledonian Railway Co. v. Walker's Trustees - 1982 (7) A.C. 259 and Lord Halsbury in Qulnn. Leathem (1901) A.C. 495 (502). Sir Frederick Pollock has also said: 'Judicial authority belongs not to the exact words used in this or that judgment, not even to all the reasons given, but any to the principles accepted and applied as necessary ground of the decision.'
19. In other words, the enunciation of the reason or principle upon which a question before a Court has been decided is alone a precedent. The ratio decidendi is the underlying principle, namely, the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particular case which gives rise to the decision. The ratio decidendi has to be ascertained by an analysis of the facts of the case and the process of reasoning involving the major premise consisting of a pre-existing rule of law, either statutory or judge-made, and a minor premise consisting of the material facts of the case under immediate consideration. If it is not clear, it is not the duty of the Court to spell it out...
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