Supreme Court

Dinesh Textiles Vs. Commissioner of Central Excise, Customs and Service Tax, Calicut

MANU/SC/0294/2019

28.02.2019

Excise

If a legal fiction is introduced that legal fiction must be taken to the logical end

Present appeals filed under Section 35L of the Central Excise Act, 1944 (Excise Act) question the correctness of the Final Order passed by the Tribunal, in Central Excise Appeal and Miscellaneous Order passed by the Tribunal rejecting application seeking rectification of mistake. The Appellants are traders who get cotton fabrics and made-ups mentioned in Chapters 52 and 53 of the Central Excise Tariff Act, 1985 (Tariff Act) manufactured through job workers.

It was submitted by the Appellants that, in terms of the Circular dated 30th October, 2003, the duty could not be demanded, if the value of clearance of job workers was less than Rs. 25 lakhs individually and the Revenue could raise demand only in respect of the clearance value of that job worker, where the value was in excess of Rs. 25 lakhs.

In the present case, the Appellants had supplied raw material to more than 70 job workers and the total clearances were more than Rs. 1.45 crore. Only one out of said job workers had crossed the limit of Rs. 25 lakhs while the individual clearances of rest of the job workers were less than Rs. 25 lakhs. The question that arises is whether the Appellants' liability is only in respect of the clearance of that job worker whose clearance was greater than the limit of Rs. 25 lakhs or in respect of the entire aggregate value of clearances.

According to Rule 12B3 of Central Excise Rules, 2002 dealing with "job work in textiles and textiles articles", any person who gets yarn or fabrics; or readymade garments or made up textile articles falling under Chapters mentioned in said Rule 12B produced or manufactured on his account on job work shall obtain registration, maintain accounts and pay duty leviable on such goods as if he is an Assessee. If the conditions in Rule 12B are satisfied, the liability on such person gets fixed "as if he is an Assessee".

The Exemption Notification dated 30th April, 2003 exempts "first clearances for home consumption, upto an aggregate value not exceeding twenty lakh rupees". Moreover the emphasis is on the aggregate value and what is exempted is, "upto an aggregate value". The conditions stipulated in Para 2 of said Exemption Notification, specially Clauses (i) and (ii) again emphasize the applicability in respect of "aggregate value of clearances for home consumption and not separately regarding individual clearances". The extent of limits was raised by subsequent Notification dated 17th May, 2003. The language of the exemption Notification dated 30th April, 2003 as amended, is clear. However, certain doubts arose which were clarified by Circular dated 30th October, 2003.

Rule 12B introduces a legal fiction that, in case the conditions stipulated therein are satisfied, the person concerned is to be treated as an Assessee. If he is an Assessee, all the clearances by him so long as they come within the parameters of Rule 12B, would make him liable. The Exemption Notification again does not put the matter at individual clearances of job workers and what is to be considered is an aggregate value of the clearances. It is well settled that, if a legal fiction is introduced that legal fiction must be taken to the logical end.

For the present purposes second illustration in the Circular dated 30th October, 2003 is more appropriate. According to said illustration, the moment the clearances go beyond the limit, the liability gets fastened in respect of the aggregate value of clearances. The assessment made by the Appellate Authority and the Tribunal was, therefore, correct. Consequently, it was not the individual clearance of one single job worker alone exceeding the limit of Rs. 25 lakhs but the aggregate of all clearances made by the Appellant, was liable to duty. Present appeals dismissed.

Tags : Assessment Duty Levy

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High Court of Himachal Pradesh

Vinay Kumar Vs. State of H.P.

MANU/HP/0139/2019

28.02.2019

Criminal

Minor contradictions, inconsistencies or improvements on trivial matters without effecting core of prosecution case cannot be made a ground to reject evidence in its entirety

In facts of present case, after completion of the investigation, final report, under Section 173 of Code of Criminal Procedure, 1973 (CrPC) was prepared and presented in the Court with a prayer to take cognizance of the case to try the Appellant for commission of the offence. Consequently, the Appellant was charged under Section 307 of Indian Penal Code, 1860 (IPC). The prosecution examined as many as 14 witnesses and upon closer of its evidence, statement of the Appellant under Section 313 CrPC was recorded, wherein he pleaded not guilty and claimed trial. The Appellant also examined one witness in his defence.

The Appellant/Accused was tried and convicted to undergo rigorous imprisonment for a period of five years and to pay a fine of Rs. 10,000 for commission of an offence punishable under Section 307 of IPC and in default of payment of fine, to further undergo simple imprisonment for a period of six months.

There is no difference between an appeal against conviction and an appeal against acquittal except that when dealing with an appeal against acquittal, the Court keeps in view the position that the presumption of innocence in favour of the Accused has been fortified by his acquittal and if the view adopted by the court below is reasonable one and the conclusion reached by it had its grounds well set on the materials on record. However, in case the findings of the Court below are perverse, then irrespective of the findings, be it that of the acquittal or conviction, the same are liable to be set aside.

The version put forth by the victim was duly corroborated by his wife, Kanchan, who appeared as PW 3 and deposed on similar lines as those of the victim. As regards the injuries sustained by the victim, the same have been duly proved on record by PW 4 Doctor, who after detailing out the injuries had opined that the injuries were sufficient to attract the applicability of Section 307 IPC.

The version put forth by all witnesses is duly corroborated by the Investigating Officer, who appeared as PW 14. Not only the mode and manner in which the cross-examination of the prosecution witnesses has been conducted establishes the presence of the Appellant beyond any shadow of doubt at the spot, but more importantly, in the complaint lodged by the Appellant himself vide Ext. PW 9/A, his presence as also some kind of altercation having been taken between him and the victim is duly established on record.

It is more than settled that, while appreciating evidence, the Court has to take into consideration whether the contradictions/omissions are of such magnitude that they materially affect the trial. Minor contradictions, inconsistencies, embellishments or improvements on trivial matters without effecting the core of the prosecution case cannot be made a ground to reject the evidence in its entirety.

Mere marginal variations in the statements cannot be dubbed as improvements as the same may be elaborations of the statement made by the witness earlier. The omissions which amount to contradictions in material particulars i.e. go to the root of the case/materially affect the trial or core of the prosecution's case, render the testimony of the witness liable to be discredited.

There is hardly any contradiction with regard to place of occurrence as is sought to be established by the learned counsel for the Appellant. Secondly, even if so called contradiction is taken into consideration, the same is so trivial that it does not affect the core of the prosecution case because what was primarily required to be established by the prosecution was not the place of occurrence, but the offence under Section 307 of IPC.

The findings recorded by the learned trial court are based on correct appreciation of material on record and in absence of perversity, these findings cannot be interfered with. Appeal is accordingly dismissed.

Tags : Conviction Evidence Credibility

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Supreme Court

Shri Ram Mandir, Indore Vs. State of Madhya Pradesh and Ors.

MANU/SC/0287/2019

27.02.2019

Civil

In absence of any pleadings and evidence that, pujari built the temple, same cannot be claimed as private temple

Present appeal arises out of the judgment passed by the High Court in and by which the High Court dismissed the Second Appeal thereby affirming the findings of the First Appellate Court that, Shri Ram Mandir, Indoukh is a public temple and that the suit property is vested in the Deity; and Ram Das and then Bajrang Das are only pujaris and not Mahant-Manager of the temple.

The question falling for consideration is whether Shri Ram Mandir is a public temple or a private temple as claimed by the Appellant. Further, question falling for consideration is whether the Appellant is the Mahant of Shri Ram Mandir and whether he is in control and administration of the temple and the suit properties as claimed by him.

The onus of proving that the Appellant-Shri Ram Mandir falls within the description of private temple is on the Appellant who is asserting that the temple is a private temple and that he is the Mahant of the temple. In State of Uttarakhand and Anr. v. Mandir Sri Laxman Sidh Maharaj, it was held that "the necessary material pleadings ought to have been made to show as to how and on what basis, the Plaintiff claimed his ownership over such a famous heritage temple and the land surrounding the temple. Thus, in the absence of any pleadings in the plaint that, the pujari built the temple, they cannot claim the temple to be a private temple."

In the case in hand, plaint lacks pleadings regarding who constructed the temple and how he raised the funds. In the absence of pleadings and evidence that the temple was constructed by Gulab Das, the First Appellate Court rightly held that, based on the evidence of PW-1, it cannot be held that Shri Ram Mandir is a private temple.

In Goswami Shri Mahalaxmi Vahuji v. Ranchhoddas Kalidas and Ors., the Supreme Court held that, "the origin of the temple, the manner in which its affairs are managed, the nature and extent of gifts received by it, rights exercised by the devotees in regard to worship therein, are relevant factors to establish whether a temple is a public temple or a private temple." Likewise, as held in Tilkayat Shri Govindlalji Maharaj Etc. v. State of Rajasthan and Ors., the participation of the members of the public in the Darshan in the temple and in the daily acts of worship or in the celebrations may be a very important factor to consider in determining the character of the temple. In the present case, the Appellant has not adduced any evidence to show that, there is restricted participation of the public for darshan.

Plaintiff Ram Das himself got the land in the year 1985-86 on lease for Rs. 860 from Government and in this respect, he has signed on the order sheet. An amount of Rs. 600 was deposited on 31st July, 1986. Thereafter, in the year 1986-87, pujari Ram Das got the lease renewed for one year at Rs. 860 out of which he has deposited Rs. 460 on 11th November, 1987 for which a receipt has been issued to pujari Ram Das. The fact that the Appellant having taken the Mandir lands on lease from the Government clearly show that, the properties were never owned by the pujaris in their individual capacity.

Having taken the Mandir property on lease from the Government, the Appellant is estopped from denying that the temple properties are under the management and control of the Government. The suit lands have been given in the name of Shri Ram Mandir and few other lands in the name of Ganesh Mandir for the arrangement of pooja, archana, naivedya, etc. for the public temple and the pujari has no right to interfere in the management of these lands as his status is only that of pujari.

The finding of the first appellate Court and the High Court that Shri Ram Mandir is a public temple and not a private one is based upon the appreciation of oral and documentary evidence. Bajrang Das (PW-1) himself has been appointed as pujari by the Government and the Appellant/Plaintiff has not adduced any evidence showing that the temple belonged to one particular family. By oral and documentary evidence, it is clearly established that, the suit lands are recorded in the name of Shri Ram Mandir.

The High Court rightly held that, no substantial question of law arose in the Second Appeal. Based upon oral and documentary evidence, the First Appellate Court and the High Court have recorded the concurrent findings of fact that, Shri Ram Mandir is a public temple and not a private temple and that, the agricultural lands were given to the Deity and not to the pujaris. The impugned judgment does not suffer from any infirmity warranting interference. The appeal is dismissed.

Relevant

State of Uttarakhand and Anr. v. Mandir Sri Laxman Sidh Maharaj MANU/SC/1180/2017
, Goswami Shri Mahalaxmi Vahuji v. Ranchhoddas Kalidas and Ors. MANU/SC/0466/1969
, Tilkayat Shri Govindlalji Maharaj Etc. v. State of Rajasthan and Ors. MANU/SC/0028/1963

Tags : Temple Ownership Proof

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL

Reprographic India, New Delhi Vs. Competition Commission of India and Ors.

MANU/NL/0087/2019

26.02.2019

MRTP/ Competition Laws

Unless a prima facie case exists, Informant has no vested right to seek investigation into alleged contravention of provisions

The Appellant is aggrieved of order dated 9th November, 2018 passed by the Competition Commission of India (CCI) under Section 26(2) of the Competition Act, 2002 in Case No. 41 of 2018 whereby and whereunder CCI closed the information filed by the Appellant alleging that during the entire bidding process, Respondents acted in collusion and thereby rigged the process causing huge loss to public exchequer. CCI observed that, a prima facie case under the Competition Act, 2002 was not made out against the Respondents as the case of Appellant Informant lacked reasonable allegations based on any concrete evidence.

The issue arising for determination is whether the CCI erred in undertaking an exercise itself to determine whether or not the allegation of inter-alia collusive bid rigging levelled against Respondent Nos. 2 & 3 has been established without ordering an investigation in terms of Section 26 (1) of the Competition Act, 2002.

Agreement postulates meeting of minds. The Informant shall have to lay evidence, direct or circumstantial, before the CCI that an agreement was entered into between such enterprises, persons or their associations engaged in identical or similar trade in respect of the prohibited activity which resulted in bid rigging or collusive bidding. It is only then that such agreement can be presumed to have an appreciable adverse effect on competition.

CCI is empowered to inquire into any alleged contravention of provisions contained in Section 3(1) or Section 4(1) of the Competition Act, 2002 on its own motion or on receipt of an information from any person, consumers or their associations or trade associations or upon a reference made to it by the Central Government, State Government or Statutory Authority. Section 26 of the Act provides that upon receipt of a reference or upon its own knowledge or upon information received from any person, the Commission, if of opinion that there exists a prima facie case, shall direct the Director General (DG) to cause an investigation to be made into the matter. On a bare reading of this provision, it is abundantly clear that causing of investigation to be conducted by Director General is entirely dependent on existence of a prima facie case warranting such investigation.

Unless the Commission is satisfied that a prima facie case exists, the Informant (where information has been received from any person) has no vested right to seek investigation into alleged contravention of provisions Section 3(1) or Section 4(1) of the Act. The Informant has to demonstrate that there is substance in the allegations levelled in the information and he will fairly succeed in establishing that the Respondents are engaged in anti-competitive agreements. Raising of competition concerns on the strength of bald allegations without any shred of evidence would not absolve the Informant of his obligation to make out a prima facie case warranting causing of investigation by DG. It is indisputable that, direct evidence would seldom be available in cases of bid rigging or collusive bidding. However, inference of complicity in anti-competitive activities would be available only on the basis of proved facts.

Merely because the bidders while exercising their choice of quoting products, opt for a particular manufacturer, which may be attributable to a variety of factors, would not necessarily justify meeting of minds. This observation equally applies in the facts and circumstances of instant case where Respondent No. 2 emerged as L-1 in the bidding process while he was found to have quoted quite a few products of HP for Group-A Items. The successful bidder had not only the choice to quote product of a particular OEM but also was required to attend to the service and maintenance besides providing spare parts etc. during the entire lease period. The choice for a particular product may have emanated out of this consideration as well.

The Respondent No. 2 was entitled to exercise his choice of quoting products of a particular manufacturer so long he did not come in conflict with the terms and conditions of the tender. There may have been business linkages inter-se Respondents 2 and 3 but in absence of any material to suggest that these Respondents were engaged in the practice of bid rotation, no adverse inference suggestive of collusive bidding could be drawn against them.

The Appellant - Informant who was neither an OEM nor an SI and was not in the fray for bidding qua the tender in question raised competition concerns on the basis of wild allegations without any substance. The circumstances projected by him, in absence of any incriminating evidence, would not justify drawing inference of complicity of Respondents 2 and 3 in bid rigging/collusive bidding. The Appellant-Informant has miserably failed to make out a prima facie case warranting causing of an investigation by DG. The impugned order passed by the Commission is based on application of mind and does not suffer from any legal infirmity. The appeal is dismissed.

Tags : Bid rigging Investigation Closing of

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Customs, Excise and Service Tax Appellate Tribunal

Commissioner of GST and Central Excise, Chennai Vs. SSI Media India Pvt. Ltd.

MANU/CC/0060/2019

26.02.2019

Service Tax

Simultaneous penalties under Section 76 as well as 78 of Finance Act cannot be imposed

The Respondents are engaged in providing advertising services by displaying the advertisement of their clients on bus back panels, bus shelters etc., after obtaining permission from MTC, TNSTC and Southern Railway. They obtained service tax registration under the category of Advertising Agency Service. During the course of audit of the accounts of the Respondents, for the period from October and November 2009, it was noticed that, the Respondents had short-paid service tax during the period from October 2008 to February 2009 and not paid service tax for the period July 2009 to October 2009. It was also noticed that, Respondent had declared lesser taxable value for the half-year ending return of 31st March, 2009.

Show cause notice was issued proposing to demand the short-paid service tax along with interest and for imposing penalties. After due process of law, the Adjudicating Authority confirmed the demand raised in the show cause notice and appropriated the said amount already paid by the Appellant along with interest and imposed penalty under Section 76 of the Finance Act, 1994 along with penalty of Rs. 5,000 under Section 77 of the Act. The Department has filed the present appeal against such order aggrieved for the failure to impose penalty under Section 78, even though the same was proposed in the show cause notice.

The Respondent has discharged the entire service tax liability along with interest before issuance of the show cause notice. Part of the amount was paid up by adjusting CENVAT credit. In para 8 of the impugned order, the Respondent has taken a plea that they defaulted in payment of service tax due to certain legal dispute between their clients. As per sub-section (3) of Section 73, when the Assessee has paid up the service tax along with interest on its own ascertainment or being point out by the officers, no penalties are required to be imposed.

In the present case, show cause notice was issued even though the Appellant had paid up the entire service tax along with interest immediately on being point out by audit. The Adjudicating Authority has imposed penalty under Section 76. After the amendment with effect from 10th May, 2008, last proviso to Section 78 states that if penalty is payable under such section, the provisions of Section 76 shall not apply. Therefore, the penalties under Sections 76 and 78 are mutually exclusive. When the Adjudicating Authority has considered and imposed penalty under Section 76, the same cannot be set aside by the Tribunal in an appeal filed by Department requesting to impose penalty under Section 78. There is no ground stated in this appeal contending that penalty imposed under Section 76 is erroneous.

The Hon'ble High Court of Gujarat in Commissioner of CGST & Central Excise Vs. Sai Consulting Engineering Ltd., has held that, simultaneous penalties under Section 76 as well as 78 of the Finance Act cannot be imposed. Simultaneous penalty under Section 76 and 78 cannot be imposed under law. When there is a penalty under Section 76, simultaneous penalty under Section 78 cannot be imposed under law. The Respondent has paid up the entire demand along with interest before issuance of show cause notice, hence further penalty under Section 78 is unwarranted. The impugned order does not call for any interference. The appeal filed by Revenue is dismissed.

Relevant

Commissioner of CGST And C. Ex. vs. Sai Consulting Engineering Pvt. Ltd. MANU/GJ/0351/2018

Tags : Demand Penalty Levy

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Supreme Court

Varun Pahwa Vs. Renu Chaudhary

MANU/SC/0307/2019

01.03.2019

Civil

Amendment in pleadings cannot be refused merely because of some mistake, negligence, inadvertence or even infraction of Rules of Procedure

The Order passed by the High Court of Delhi is subject matter of challenge in the present appeal. By the aforesaid order, a petition against an order passed by the learned trial Court seeking permission to amend the plaint was dismissed. The trial Court declined the amendment on the ground that, the application is an attempt to convert the suit filed by a private individual into a suit filed by a Private Limited Company which is not permissible as it completely changes the nature of the suit.

The plaint is not properly drafted as in the memo of parties, the Plaintiff is described as Varun Pahwa through Director of Siddharth Garments Pvt. Ltd. though it should have been Siddharth Garments Pvt. Ltd. through its Director Varun Pahwa. Thus, it is a case of mistake of the counsel, may be on account of lack of understanding as to how a Private Limited Company is to sue in a suit for recovery of the amount advanced.

The memo of parties is thus clearly inadvertent mistake on the part of the counsel who drafted the plaint. Such inadvertent mistake cannot be refused to be corrected, when the mistake is apparent from the reading of the plaint. The Rules of Procedure are handmaid of justice and cannot defeat the substantive rights of the parties. It is well settled that, amendment in the pleadings cannot be refused merely because of some mistake, negligence, inadvertence or even infraction of the Rules of Procedure. The Court always gives leave to amend the pleadings even if a party is negligent or careless as the power to grant amendment of the pleadings is intended to serve the ends of justice and is not governed by any such narrow or technical limitations.

In Uday Shankar Triyar v. Ram Kalewar Prasad Singh and Anr. this Court held that, procedural defects and irregularities which are curable should not be allowed to defeat substantive rights or to cause injustice. Procedure should never be made a tool to deny justice or perpetuate injustice by any oppressive or punitive use.

Thus, it was an inadvertent mistake in the plaint which trial Court should have allowed to be corrected so as to permit the Private Limited Company to sue as Plaintiff as the Original Plaintiff has filed suit as Director of the said Private Limited Company. Therefore, the order declining to correct the memo of parties cannot be said to be justified in law. Consequently, the orders passed by the High Court and by the trial Court are set-aside and the application filed by the Plaintiff to amend the plaint is allowed.

Relevant

Uday Shankar Triyar v. Ram Kalewar Prasad Singh and Anr. MANU/SC/2173/2005

Tags : Plaint Amendment Entitlement

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