ORDER
Harish Chander, Member (J)
1. The present application filed by the respondents M/s. Kama Industries Ltd. emerges from Revenue’s viz. CCE, New Delhi’s application under Section 35(E) of the Central Excises and Salt Act, 1944 on form E.A. 5 which was received in the Registry on 20th December, 1988 to be treated as an appeal. Shri Ravindra Narayan, learned advocate has appeared and pleaded that the present application is under Section 35-F of the Central Excises & Salt Act, 1944, as well as under the inherent jurisdiction of the Hon’ble Tribunal. He pleaded that the respondents carry on the activity of repair of compressors in northern India for the compressors manufactured by M/s. Shriram Refrigeration Industries Ltd., and the repair activity is being done by the respondents in Northern India and Southern India. Similar activity is done by M/s. Shriram Refrigeration Industries in South India and the matter is covered by an earlier judgment of the Tribunal in favour of the respondents in the case of Shriram Refrigeration Industries Ltd. v. Collector of Central Excise, Hyderabad reported in 1986 (26) ELT 353. The learned advocate fairly stated that the Revenue being not satisfied by the order of the Tribunal filed an appeal before the Supreme Court and the appeal was hit by limitation. The delay has not been condoned by the Supreme Court and the appeal has not been admitted and the same has not come up for admission till date. He also pleaded that the Revenue has not accepted the decision of the Collector of Central Excise, New Delhi in respondents’ own case and there is recurring effect. On the subsequent clearances, the Revenue has issued seven show cause notices which are pending before the Collector of Central Excise (Judicial) as well as the Assistant Collector. He pleaded that in case the Revenue authorities complete the adjudication proceedings of these matters, it will unnecessary put the respondents in litigation which will result to inconvenience and huge expenditure and the same can be avoided. He pleaded that the review application filed by the Revenue which has to be treated as an appeal, an early hearing be ordered so that whatever decision is given by the Tribunal, the lower authorities may follow the same. He also pleaded that the Tribunal should exercise its inherent powers and grant stay for staying the proceedings which are pending before the Collector of Central Excise (Judicial), New Delhi as well as the Assistant Collector having jurisdiction. He stated that the two show cause notices No. V (29A) 15/ 14/CE/88/274 dated 20-1-1988 and V(8414)15/27 -CE/89/102 dated 20-12-1989/9-1-1990 are listed for hearing before the Collector of Central Excise (Judicial), New Delhi tomorrow ie. 28th day of December, 1990. If the adjudication proceedings are completed, the respondents shall suffer unnecessary inconvenience and may also suffer irreparable loss. He also stated that the respondents were harassed during the relevant period and if the respondents are desired to pay the excise duty i.e. about Rs. 4000/- and the respondents will have to close down its unit. In support of his argument, Shri Raviader Narayan, learned advocate has relied on the following judgments:-
(1) 1988 (34) ELT 681 – CCE v. J.K. Cotton Spg. & Wvg. Mills.
(2) 1983(12)ELT P-1- ITC v. UOI
(3) 1991 (51) ELT 625 (Tri.) – Orient Paper Mills v. CCE
(4) 1991 (52) ELT 18 (Raj.) – DCM Ltd. v. UOI
Shri Ravinder Narayan, learned advocate stated that in view of the earlier decisions of the Tribunal and the circumstances explained by him it is a fit case where the Tribunal should exercise its inherent powers in view of the judgment of the Supreme Court in the case of ITO v. Mohd. Kunhi [AIR 1969 SC 430]. He also stated that early hearing be ordered in the appeal filed by the Revenue.
2. Shri M.S. Arora, learned JDR who has appeared on behalf of the appellant stated that he does not oppose the request for early hearing. Shri Arora, however, pleaded that he opposes the grant of stay in respect of the proceedings which are pending before the lower authorities viz. Collector of Central Excise (Judicial) and the Assistant Collector having the jurisdiction. Shri Arora, learned JDR stated that the judgments cited by the learned advocate are not relevant and do not help him as these proceedings will not cause hardship.
3. We have heard both the sides and have gone through the facts and circumstances of the case. Since the matter before us is sub judice, it will not be proper for us to give our further observations on merits at this stage and Shri Ravinder Narayan, learned advocate, stated that the matter is covered by the earlier judgment of the Tribunal in the case of Shriram Refrigeration Industries Ltd. v. CCE [1986 (26) ELT 353]. Shri M.S. Arora, learned JDR has drawn the attention of the Bench to Board’s Order No. 46R/88 dated 3-11-1988-internal page 6-para 5 where the Member has observed that the facts of this case are not identical with the case of Shriram Refrigeration Industries Ltd. In reply, Shri Ravinder Narayan, learned advocate stated that the observatioins of the Member are in the nature of a direction to the Collector for the purpose of the filing of the review application in the Tribunal. However, it is an established practice that as far as possible and practicable, multiplicity of proceedings should be avoided in the matter before us if the adjudication proceedings are completed and the earlier order of the Collector (adjudicating authority) is in favour of the respondents which is a subject-matter of appeal before the Tribunal. Keeping in view the earlier judgments of the Tribunal in the case of CCE v J.K. Cotton Spg. & Wvg. Mills reported in 1988 (34) ELT 681, we are of the view that it is a fit case where the Tribunal should grant stay for the pending proceedings before the lower authorities. Relevant para 3 of the said judgment is reproduced below :-
“3. We have heard both the sides and have gone through the facts of the case. We are satisfied that the facts and circumstances require that stay should be granted in respect of the further proceedings on the show cause notice dated 27-12-1987 issued by the Asstt. Collector, Central Excise, Division 1, Kanpur, Para No. 9 of the Hon’ble Delhi High Court judgment in the case of ITC Ltd. and Anr. v. UOI reported in 1983 ELT 1 is reproduced below :-
‘9. It was then admitted that at times excise duty is a recurring liability and there will be no power with the Collector (Appeals) or the Tribunal to grant stay for future liability. In our opinion the power of the Collector (Appeals) and the Tribunal, contained in the proviso to Section 35-F, is of a wide amplitude. In appropriate cases the said appellate authorities will have the power to issue directions with regard to future levy which may be imposed or threatened. Apart from the proviso to Section 35-F, the appellate authority has inherent power of granting interim relief in the exercise of its appellate jurisdiction. This has been so recognised and explained by the Supreme Court in the case of Income Tax Officer v. Mohd. Kunhi, 92 ITR 341. We must make it clear that it does not mean that in every case where appeal is filed the Collector (Appeals) or the Tribunal must, as a matter of course, grant interim relief. The guidelines for the grant of interim relief are contained in the proviso to Section 35F, namely, relief will be granted only if there would be undue hardship to the person if he is asked to pay excise duty or penalty. Unless, therefore, it can be shown by the appellant that undue hardship would be caused if he is required to pay the duty or penalty the appellate authorities would be entitled to refrain from granting any interim relief. What is undue hardship would depend upon the facts of each case. Where a manufacturer has collected excise duty from his customers, or continues to collect the same, it will be extremely difficult for that person to plead hardship entitling him to the grant of interim orders”.
Accordingly, we stay the proceedings prayed for”.
Similar were the observations of the Delhi High Court in the case of ITC and Anr. v. UOI [1983 (12) ELT 1] which was followed by the Tribunal in 1988 (34) ELT 681 – J.K. Cotton Spg. & Wvg. Mills and para 9 from the said judgment was reproduced by the Tribunal in its order. The Tribunal in the case of Orient Paper Mills v. UOI [1991 (51) ELT 625 (Tri.)] has also made similar observations. Para 2 from the said judgment is reproduced below :-
“We have considered the submissions of both sides. In view of the Tribunal judgment in TELCO and our stay order in this very case, the Department will not be correct in collecting cess on the higher value. However, considering that the Department has filed an appeal before the Supreme Court, we direct that show cause notices may be issued to the applicants but no final orders should be passed against them and demand enforced till such time as the Supreme Court decides the Department’s appeal in TELCO”.
The Central Board of Excise and Customs had issued a circular No. 1/90-AU dated 19-3-1990. The said circular is also reproduced below :-
“SHOW CAUSE NOTICE TO BE KEPT PENDING IF APPEAL FOR EARLIER PERIOD ON SIMILAR ISSUE PENDING BEFORE APPELLATE AUTHORITY.
Please find enclosed herewith a copy of Tribunal Misc. Order No. 121/89-A dated 1-12-1989 in 1991 (51) ELT 625 (Tri.) – Para 2 –Orient Paper Mills v. Collector of Central Excise, Indore. The Tribunal has held that in view of their judgment in TELCO case (Order No. 432-433/87-A dated 4-6-1987) and their stay order in this very case, the Department will not be correct in collecting cess on higher value. However, considering that the Department has filed an appeal before the Supreme Court, they have directed that show cause notices may be issued to the appellants but no final orders should be passed against them arid demands enforced till such time as the Supreme Court decides the Department’s appeal in TELCO’s case.
2. On this issue, Board has issued following circulars :
(i) Circular No. 7/84 dated 23-2-1984 Issued from F.N. 398/3/84-AU wherein, it was directed that the show cause-cum-demand notices subsequent to the period covered by orders of Collector (Appeals) as well as Tribunal which had been agitated in appropriate forum should be raised in order to protect the Government revenue.
(ii) Circular No. 82/84 dated 28-6-1984 issued from F.No. 383/11/84 AU, the above directions were reiterated.
(iii) Circular No. 2/85-AU dated 8-1-1985 issued from F.No. 384/265/85-AU (BMB) wherein it was clarified that order of the Tribunal are “judgments in personem” and not “judgment in rem”.
3. In view of the Tribunal order referred to above the Board desires that in similar cases, show cause-cum-demand notices may be raised, but not enforced till final decision by the Supreme Court wherever the issue has been agitated before Collector (Appeals), Tribunal and lastly, the Hon’ble Supreme Court. [Based on CBE & C Circular 1/90-AU dated 19-3-1990]
Hon’ble Rajasthan High Court has also made similar observations in 1991 (52) ELT 18 (Raj.)-Paras 14 & 15 [DCM Ltd. v. UOI]. Paras 14 and 15 of the said judgment are reproduced below :-
“14. It has not been disputed by the Department that the Collector (Appeals) has decided the very point under issue in the present case, in favour of the petitioner on more than one occasions and the matter is still sub judice before the Tribunal. Unless that order of the Collector (Appeals) is set aside or quashed, both the petitioner as well as the Department, are bound by the said decision of the Collector (Appeals), and therefore, it was in the fitness of things to have waited for decision of the Tribunal and not to proceed with the proceedings in pursuance of the show cause notice. Giving of a notice under Section 11A can be validly justified on the ground that the Department wants to keep alive the issue because the matter cannot be re-opened under Section 11A after a period of six months from the relevant date, and therefore, the proper course for the Department would have been to issue notice but to stay their hands and not to proceed further in pursuance of the notice, specially when the petitioner had made a representation to the Department to wait for the decision of the Tribunal before proceeding further in pursuance of the show cause notice, and therefore, the relief that has been sought by the petitioner in the present writ petition is for getting the notices, quashed and for restraining the Assistant Collector from adjudicating upon the notices, which cannot be granted by any authority of the Department under any provision of the Act, hence it cannot be said that the petitioner has got an alternative efficacious remedy, more so when in other matters in pursuance of the later notices in which the writ petitions had already been filed but the petitioner could not obtain the stay order of further proceedings as has been done in the present writ petitions, the Department did not wait and proceeded with and has passed the order raising the demand.
15. Ordinarily, we would not have discussed the merits of the case since the point under issue in the present matter which has been decided in favour of the petitioner by the Collector (Appeals), is still sub judice before the Tribunal and we would have waited for the decision of the Tribunal but looking to the fact that the Department is not satisfied by the order of the Collector (Appeals) and instead of pursuing the matter before the Tribunal, has been issuing notices and the Assistant Collector has even passed assessment orders involving the same question and taking a contrary view than that of the Collector (Appeals) and the Department did not even wait but proceeded to pass the assessment order without waiting for the decision of the Tribunal in spite of repeated requests made by the petitioner, particularly when the High Court had stayed the assessment order in these writ petitions but in the later year, the petitioner could not obtain a stay order, though writ petition had been filed, because of the strike of the lawyers. The petitioner has to file writ petition every now and then. The Tribunal is not a party before us and the matter may not be decided finally by the Tribunal for a number of years. The Department will go on issuing notices and passing the assessment orders which will necessitate filing of appeals or coming to this Court which will be nothing but multiplicity of proceedings and undue harassment to the petitioner. Therefore, in these particular facts and circumstances, we are inclined to consider the merits of the case as well.”
In view of the observations in the aforesaid judgment of Rajasthan High Court, we are of the view that it is a fit case where the Tribunal should exercise its inherent powers.
Accordingly, we order that during the pendency of the appeal the Collector of Central Excise (Judicial) and jurisdictional Assistant Collector shall not proceed with the adjudication proceedings in respect of the following show cause notices :-
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Number Date Period
___________________________________________________________________________________
V(29A)15/14/CE/88/274 20/1/88 Sept. 86 to Mar. 87,
Apl. 87 to Oct. 87
V(8414) 15/27-CE/89/102 20/12/89 Nov. 87 to May 88
9/1/90
C. No. CE-13/Karna/R-17/88/Demand/1481 15/12/88 June 88 to Nov. 88
C. No. CE-13/Karna/R-17/Demand/89/769 19/25-5-89 Dec. 88 to Apl. 89
C. No. CE-13/Karna/R-17/Demand/89/1404 27/10/89 May 89 to Sept. 89
C. No. CE-13/Karna/R-13/Demand/90/1970 30/3/90 Oct. 89 to Feb. 90
C. No. CE-13/Karna/R-13/Demand/90/667 21/8/90 March 90 to July 90
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However, we make it clear that the Revenue authorities are well within their rights to issue show cause notices for any period in accordance with law, if they so choose. Since there is recurring effect we accept the prayer of the learned advocate for the grant of early date of hearing which is not opposed by the learned JDR, Shri M.S. Arora. We also order that the appeal will be heard on merits on 6-3-1991.