{"id":16988,"date":"2010-01-13T00:00:00","date_gmt":"2010-01-12T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/marg-vs-the-union-of-india-on-13-january-2010"},"modified":"2019-03-20T16:39:30","modified_gmt":"2019-03-20T11:09:30","slug":"marg-vs-the-union-of-india-on-13-january-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/marg-vs-the-union-of-india-on-13-january-2010","title":{"rendered":"Marg vs The Union Of India on 13 January, 2010"},"content":{"rendered":"<div class=\"docsource_main\">Bombay High Court<\/div>\n<div class=\"doc_title\">Marg vs The Union Of India on 13 January, 2010<\/div>\n<div class=\"doc_bench\">Bench: Dr. D.Y. Chandrachud, J.P. Devadhar<\/div>\n<pre>                                              1\n\n                    IN THE HIGH COURT OF JUDICATURE AT BOMBAY\n\n\n\n\n                                                                                \n                         ORDINARY ORIGINAL CIVIL JURISDICTION\n\n\n\n\n                                                        \n                             WRIT PETITION NO.2308 OF 2009\n\n\n\n\n                                                       \n    M\/s.Hindustan Petroleum Corporation Limited\n\n    (A Government of India Enterprise] a company\n\n\n\n\n                                             \n    incorporated under the Companies Act, 1956 &amp;\n                              \n    having its Registered Office at 17, Jamshedji\n\n    Tata Road, Mumbai - 400 020\n                             \n    and its Refinery at P.O. Box No.18820, B.D. Patil\n\n    Marg, Mahul, Chembur, Mumbai - 400 074                                ..Petitioner.\n           \n\n\n           Versus\n        \n\n\n\n    1.     The Union of India,\n\n           Ministry of Law &amp; Justice, Aayakar \n\n\n\n\n\n           Bhavan, New Marine Lines,\n\n           Mumbai - 400 020.\n\n\n\n\n\n    2.     The Commissioner of Central Excise, \n\n           Mumbai - II Commissionerate, having\n\n           Office at Piramal Chambers, Jijibhoi Lane,\n\n           Parel, Mumbai - 400 012                                        ..Respondents.\n\n\n\n    Mr.M.H. Patil for the petitioner.\n\n    Mr.Jitendra Mishra for the respondent.\n\n                                                        ::: Downloaded on - 09\/06\/2013 15:30:42 :::\n                                                     2\n\n\n\n\n                                                                                          \n                                                           CORAM : Dr.D.Y. Chandrachud &amp;\n                                                                    J.P. Devadhar, JJ.   \n<\/pre>\n<p>                                                           DATE     : 13th January, 2010.\n<\/p>\n<p>    ORAL JUDGMENT (Per Dr.D.Y. Chandrachud, J.) :\n<\/p>\n<p>    1.             Rule.  With the consent of the learned counsel appearing on behalf of <\/p>\n<p>    the respondents, rule is made returnable.  The learned counsel appearing on behalf <\/p>\n<p>    of the respondents waives service.  With the consent of the learned counsel, taken <\/p>\n<p>    up for hearing and final disposal.\n<\/p>\n<p>    2.             The petitioner is in appeal before the Customs, Excise and Service Tax <\/p>\n<p>    Appellate   Tribunal,   aggrieved   by   an   order   of   adjudication   passed   by   the <\/p>\n<p>    Commissioner on 6th February 2008 confirming a demand of duty of Rs.3.85 crores.\n<\/p>\n<p>    An application for waiver of pre-deposit was filed before the Tribunal.  By its order <\/p>\n<p>    dated   11th  September   2009,   the   Tribunal   directed   the   petitioner   to   deposit   an <\/p>\n<p>    amount of Rs.1 crore within a period of four weeks and to report compliance.\n<\/p>\n<p>    3.             The issue which arises before the Tribunal in the appeal pertains to an <\/p>\n<p>    Exemption Notification (No.64\/95-CE) dated 16th March 1995.  Under Serial No.3 <\/p>\n<p>    of the  Notification,  an  exemption is  provided  in respect of all  goods other than <\/p>\n<p>    cigarettes `if supplied as stores for consumption on board a vessel of the Indian <\/p>\n<p>    Navy or Coast Guard&#8217;.  The petitioner claims to have supplied High Speed Diesel Oil <\/p>\n<p>    as stores for consumption on board naval vessels.  According to the petitioner, the <\/p>\n<p><span class=\"hidden_text\">                                                                  ::: Downloaded on &#8211; 09\/06\/2013 15:30:42 :::<\/span><br \/>\n<span class=\"hidden_text\">                                                       3<\/span><\/p>\n<p>    product   has   been   supplied   through   the   installations   of   Indian   Oil   Corporation <\/p>\n<p>    Limited, which are directly connected to the naval docks through dedicated pipe <\/p>\n<p>    lines.   The case of the petitioner is that prior to 6th  September 2004 a facility of <\/p>\n<p>    removing  petroleum  products  without  payment  of  duty  from  the   refinery  to  the <\/p>\n<p>    warehouse was available.  The prevailing practice of Indian Oil Corporation Limited <\/p>\n<p>    was   to   place   orders   upon   the   petitioner,   confirming   the   quantities   intended   for <\/p>\n<p>    supplies to  Naval  Vessels.    The  petitioner  made  supplies against  specific  indents <\/p>\n<p>    placed   by Indian  Oil  Corporation  Limited  and  claimed  the  benefit of  Exemption <\/p>\n<p>    Notification No.64\/95-CE.   With effect from 6th  September 2004, the warehousing <\/p>\n<p>    facility was withdrawn.   The petitioner continued the same practice, as before, of <\/p>\n<p>    supplying or clearing specified quantities of HSD oil through pipe lines to IOCL&#8217;s <\/p>\n<p>    warehouse at Wadala, which in turn was cleared by IOCL to Naval Vessels.\n<\/p>\n<p>    4.              A show cause notice was issued to the petitioner on 25th  September <\/p>\n<p>    2007   by   the   Commissioner   of   Central   Excise   seeking   to   deny   the   benefit   of <\/p>\n<p>    Exemption Notification No.64\/95 on the ground that the supply of HSD was not <\/p>\n<p>    effected directly to the Indian Navy.  The demand, as noted earlier, was confirmed <\/p>\n<p>    on 6th  February 2008.   The petitioner has filed an appeal before the Tribunal, in <\/p>\n<p>    which   an   application   for   stay   was   moved.     Stay   has   been   granted   subject   to   a <\/p>\n<p>    deposit of an amount of Rs.1 crore, by the impugned order.\n<\/p>\n<p>    5.              The   grievance   of   the   petitioner   before   the   Court   is   that   the   same <\/p>\n<p>    member   of   the   Tribunal,  who   passed   the   impugned   order   dated   11th  September <\/p>\n<p>    2009   subsequently  passed   an  order  on  20th  November   2009   in a   batch   of   cases <\/p>\n<p>    involving   the   same   question,   by   which   a   complete   waiver   of   pre-deposit   was <\/p>\n<p><span class=\"hidden_text\">                                                                     ::: Downloaded on &#8211; 09\/06\/2013 15:30:42 :::<\/span><br \/>\n<span class=\"hidden_text\">                                                        4<\/span><\/p>\n<p>    granted, subject to the filing of a bond.   As a matter of fact, it may also be noted <\/p>\n<p>    that among the stay applications, which were disposed of by the Tribunal on 20 th <\/p>\n<p>    November   2009   were   those   arising   from   appeals   filed   by   Bharat   Petroleum <\/p>\n<p>    Corporation   Limited   as   well   as   the   petitioner,   Hindustan   Petroleum   Corporation <\/p>\n<p>    Limited.  The grievance, therefore, is that an inconsistent stand has been taken by <\/p>\n<p>    the Tribunal not merely in respect of different oil companies but in the case of the <\/p>\n<p>    petitioner itself.\n<\/p>\n<p>    6.<\/p>\n<p>                    During the course of hearing, learned counsel appearing on behalf of <\/p>\n<p>    the respondent has placed on the record a subsequent order passed by the same <\/p>\n<p>    member of the Tribunal on 14th December 2009 in a stay application arising out of <\/p>\n<p>    an   appeal   filed   by   the   petitioner,   by   which   the   petitioner   has   been   directed   to <\/p>\n<p>    deposit an amount of Rs.1 crore towards a demand of duty of approximately Rs.4 <\/p>\n<p>    crores.\n<\/p>\n<p>    7.              The position that has been brought to the notice of the Court is far <\/p>\n<p>    from satisfactory.  In the order of the Tribunal dated 11th September 2009 which is <\/p>\n<p>    impugned in these proceedings, the Tribunal has, on a construction primafacie of <\/p>\n<p>    Exemption Notification No.64\/95, rejected the case of the petitioner for a complete <\/p>\n<p>    waiver of pre-deposit.   The Tribunal observed that primafacie the requirement for <\/p>\n<p>    the grant of an exemption under Notification No.64\/95 is that the supply of stores <\/p>\n<p>    should be effected directly to the Indian Navy for consumption on board a Naval <\/p>\n<p>    vessel.   The Tribunal has observed that the Notification cannot apply to `indirect <\/p>\n<p>    supplies&#8217; like those involved in the present case.  The Tribunal also took note of the <\/p>\n<p>    fact   that   with   effect   from   1st  November   2007   Notification   No.37\/2007-CE   was <\/p>\n<p><span class=\"hidden_text\">                                                                      ::: Downloaded on &#8211; 09\/06\/2013 15:30:42 :::<\/span><br \/>\n<span class=\"hidden_text\">                                                    5<\/span><\/p>\n<p>    brought into force, which  inserted  Entry 3A  in the  Table  annexed  to the  earlier <\/p>\n<p>    Notification No.64\/95-CE.   By the new entry, fuels falling under Chapter heading <\/p>\n<p>    27.10 of the Tariff Schedule have been exempted from the payment of the duty of <\/p>\n<p>    excise if procured by IOCL from any other manufacturer and supplied as stores for <\/p>\n<p>    consumption on board a vessel of the Indian Navy or Coast Guard, subject to the <\/p>\n<p>    fulfillment of certain conditions.   The Tribunal however was of the view that the <\/p>\n<p>    Notification would apply with effect from 1st November 2007 whereas the dispute in <\/p>\n<p>    the present case relates to a period prior to 1 st November 2007.  The Tribunal has <\/p>\n<p>    also took note of the judgment of the Supreme Court in Leader Engineering Works  <\/p>\n<p>    Vs. CCE 2007 (212) E.L.T. 168 (S.C.).  The case before the Supreme Court related <\/p>\n<p>    to supplies of stores made not directly to the Indian Navy but to Ship Builders.  The <\/p>\n<p>    Supreme Court upheld the view of the Tribunal that the benefit of Notification No.<\/p>\n<p>    64\/95-CE was admissible only if the  goods  were  supplied  directly  to the  Indian <\/p>\n<p>    Navy as stores for consumption on board a naval vessel and not through a Ship <\/p>\n<p>    Builder on a certificate issued by the Navy that the goods would be used for the <\/p>\n<p>    manufacture of ships for the Navy.  The Supreme Court observed as follows :-\n<\/p>\n<blockquote><p>           &#8220;9.     &#8230;&#8230;.. The words of the exemption notification are clear and<br \/>\n           unambiguous.  Goods other than cigarettes are exempted from duty<br \/>\n           if the same are supplied as stores for consumption on board a vessel <\/p>\n<p>           of Indian Navy or Coastguard.  The purchase order has been issued<br \/>\n           by ship builders on behalf of the Indian Navy, Government of India<br \/>\n           under the Ministry of Defense for manufacture or warship in yard.<br \/>\n           As per notification the goods supplied to the ship builders will not<br \/>\n           qualify for exemption and only the goods supplied to the Indian Navy<br \/>\n           directly will qualify for exemption.&#8221;\n<\/p><\/blockquote>\n<p>    8.           The   Tribunal   disposed   of   another   set   of   stay   applications   on   20 th <\/p>\n<p>    November 2009 in which, as noted earlier, Bharat Petroleum Corporation Limited <\/p>\n<p><span class=\"hidden_text\">                                                                  ::: Downloaded on &#8211; 09\/06\/2013 15:30:42 :::<\/span><br \/>\n<span class=\"hidden_text\">                                                       6<\/span><\/p>\n<p>    and the petitioner were applicants.   The member of the Tribunal, who wrote the <\/p>\n<p>    impugned order dated 11th September 2009, has also written the subsequent order <\/p>\n<p>    dated 20th  November 2009.   However in the subsequent order, same judgment of <\/p>\n<p>    the Supreme Court in Leader Engineering Works (supra) has been distinguished on <\/p>\n<p>    the ground that whereas in the case of the petitioner, HSD is being supplied to the <\/p>\n<p>    Navy through a continuous pipe line, in Leader Engineering Works, the stores were <\/p>\n<p>    supplied by the assessee to the Indian Navy through Ship Builders.   We find that <\/p>\n<p>    there is a palpable inconsistency on the part of the Tribunal in dealing with stay <\/p>\n<p>    applications   arising   out   of   diverse   appeals.     The   inconsistency   is   even   more <\/p>\n<p>    pronounced having regard to the fact that the same judgment of the Supreme Court <\/p>\n<p>    in Leader Engineering Works   has been construed differently by the same member <\/p>\n<p>    of the Tribunal in the orders dated 11th September 2009 and 20th November 2009.\n<\/p>\n<p>    9.              The Tribunal, first and foremost, is duty bound by Article 141 of the <\/p>\n<p>    Constitution of India to ensure that it follows binding precedent of the Supreme <\/p>\n<p>    Court.  The Tribunal as a judicial body must follow principles of consistency when it <\/p>\n<p>    decides cases.   The lack of consistency is clear on the face of record.   In fact, as <\/p>\n<p>    noted earlier the Tribunal has now passed a third order on 14th December 2009 on a <\/p>\n<p>    stay application arising out of an appeal filed by the petitioner, by which the view <\/p>\n<p>    taken in the first order dated 11th September 2009 is reiterated and a direction has <\/p>\n<p>    been issued for the deposit of an amount of Rs.1 crore towards a demand of duty.\n<\/p>\n<p>    Faced with this situation, we are of the considered view that it would be appropriate <\/p>\n<p>    to   remit   the   proceedings   back  to   the   Tribunal   for   reconsideration   of   the   matter <\/p>\n<p>    having regard to the observations made by this Court earlier.  Judicial orders must <\/p>\n<p>    be passed by the Tribunal with a greater degree of circumspection and application <\/p>\n<p><span class=\"hidden_text\">                                                                     ::: Downloaded on &#8211; 09\/06\/2013 15:30:42 :::<\/span><br \/>\n<span class=\"hidden_text\">                                                    7<\/span><\/p>\n<p>    of mind.  Whim and caprice are alien to the judicial process.  Consistency,  based on <\/p>\n<p>    judicial precedents should be the norm.\n<\/p>\n<p>    10.           In order to facilitate a fresh decision on remand, the impugned order <\/p>\n<p>    of the Tribunal dated 11th  September 2009 is set aside and the stay application is <\/p>\n<p>    restored to the file of the Tribunal for a fresh decision.\n<\/p>\n<p>    11.           Rule   is   accordingly   made   absolute   in   the   above  said   terms.     There <\/p>\n<p>    shall be no order as to costs.\n<\/p>\n<pre>                  (J.P. Devadhar, J.)                             (Dr.D.Y. Chandrachud, J.)\n        \n     \n\n\n\n\n\n\n<span class=\"hidden_text\">                                                                  ::: Downloaded on - 09\/06\/2013 15:30:42 :::<\/span>\n <\/pre>\n","protected":false},"excerpt":{"rendered":"<p>Bombay High Court Marg vs The Union Of India on 13 January, 2010 Bench: Dr. D.Y. Chandrachud, J.P. Devadhar 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2308 OF 2009 M\/s.Hindustan Petroleum Corporation Limited (A Government of India Enterprise] a company incorporated under the Companies Act, 1956 &amp; [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-16988","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Marg vs The Union Of India on 13 January, 2010 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/marg-vs-the-union-of-india-on-13-january-2010\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Marg vs The Union Of India on 13 January, 2010 - Free Judgements of Supreme Court &amp; 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