Central Excise and Salt act

Resitration Certificate Every registered person whos ceases to carry on the operation for which he is registered has to deregister himself by making a declaration in the specified form and by depositing his registration certificate with supritendant.
ACT : Central excise and salt act.

Bombay High Court

M/S.Borochemie (India) Pvt. Ltd vs Union Of India & Ors on 7 September, 2011

Bench: Dr. D.Y. Chandrachud, A.A. Sayed

vbc 1 wp6418.11 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
APPELLATE CIVIL JURISDICTION
WRIT PETITION NO.6418 OF 2011
M/s.Borochemie (India) Pvt. Ltd. ...Petitioners. Versus
Union of India & Ors. ...Respondents. .......
Mr.V.Shridharan, Senior Advocate with Mr.Prakash Shah and Ms.Charanya Lakshmikumaran i/b. PDS Legal for the Petitioner. Mr.Pradeep S.Jetly for the Respondent.
......
CORAM : DR. D.Y. CHANDRACHUD &
A.A. SAYED, JJ.
September 7, 2011.
ORAL JUDGMENT (PER DR.D.Y.CHANDRACHUD, J.):
Rule; by consent returnable forthwith. With the consent of Counsel and at their request the Petition is taken up for hearing and final disposal.

2. The Petitioners engage inter alia in the importation and sale of goods such as Borax Pentahydrate. The goods imported are sold to customers across the country. The Petitioners submitted an vbc 2 wp6418.11 application on 21 January 2002 for obtaining Central Excise registration of their premises. The Third Respondent - the Superintendent of Central Excise, Range-II, Division-H, Mumbai IV - issued a registration certificate on 25 January 2002. At the time of registration, the Petitioners were carrying on business from the following address:

"Plot No.25-A, Besant Street, Santacruz (West),
Mumbai-400 954."
The Petitioners filed Central Excise returns before the Third Respondent. With effect from 7 June 2004, the Petitioners shifted their office to new premises, namely, 40-44A, Dheeraj Heritage, 4th Floor, S.V.Road, Santacruz (West), Mumbai-400 054. By a letter dated 8 July 2004, the Petitioners intimated the Third Respondent of having shifted their premises to a new location. The Petitioners have stated that they discontinued carrying on business from the earlier premises and that they were of the view bona fide that once a new address is communicated to the Respondents, the existing registration is continued to be operated and that no new registration would be required to be obtained. As a matter of fact, both, the earlier vbc 3 wp6418.11 premises and the new premises fell within the jurisdiction of the same Central Excise office. The Petitioners filed Nil Central Excise returns between June 2004 and March 2010. The Central Excise returns continued to mention the existing Central Excise registration number. These returns were accepted by the Second and Third Respondents. In all the communications addressed by the Department to the Petitioners, the address of the new premises was mentioned. The Petitioners have relied upon letters dated 20 April 2006 and 18 November 2008 addressed by the jurisdictional Superintendent of Central Excise. The letter dated 20 April 2006 stated that the Petitioners were registered under Rule 9(1) of the Central Excise Rules, 2002, but it appears that they have not filed Central Excise returns for the quarter ending December 2005 and March 2006.
3. The Petitioners imported 400 metric tons of Borax Pentathydrate under a Bill of Entry for home consumption dated 26 May 2010. The goods were cleared and in June 2010, they were sold to various customers across the country under 27 Invoices. vbc 4 wp6418.11 According to the Respondents, the Department objected to this action as the Registration Certificate that was issued to the Petitioners did not reflect the correct address. The Department issued a letter to the jurisdictional Central Excise authority of the purchasers of the goods from the Petitioners asking them to initiate action against the purchasers for the recovery of Cenvat credit availed of on the basis of the Cenvatable dealer's invoices. Accordingly, it was stated that the jurisdictional Central Excise authorities have issued notices to the purchasers which are pending adjudication.

4. Subsequently on 28 September 2010, the Petitioners made an application for registration of the new premises. A certificate of registration has been granted in January 2011.

5. These proceedings have been instituted under Article 226 of the Constitution seeking: (i) A declaration that the registration which has been granted to the Petitioners in respect of the new premises is valid with effect from 8 July 2004; (ii) For an appropriate writ vbc 5 wp6418.11 setting aside a communication issued in May 2011 by the Second Respondent to the Assistant Commissioner of Central Excise, calling for the reversal of the Cenvat credit availed of on the ground that the invoices were issued from premises which were not registered under Rule 9 of the Central Excise Rules; (iii) A writ declaring that the 27 invoices, more specifically stated in Exhibit 'F', are valid invoices for the purposes of availment of credit by the buyers of the goods; and (iv) For an appropriate writ directing the First and Second Respondents to either amend the existing Registration Certificate or to issue a fresh Registration Certificate effective from 8 July 2004 in respect of the new premises.

6. An affidavit in reply has been filed in these proceedings by the Assistant Commissioner of Central Excise. The sum and substance of the reply is that the Registration Certificate that was granted to the Petitioners mandated several conditions of compliance including that the certificate was valid only for the premises and for the purpose specified in the application; that the Registration Certificate was not vbc 6 wp6418.11 transferable and that no correction or change would be valid unless a request for correction or change was applied for and attested by the Superintendent of Central Excise. According to the Respondents, it was only after the Department initiated action that the Petitioners surrendered the old Registration Certificate on 16 September 2010 and applied online for issuance of a fresh Registration Certificate on 28 September 2010 in respect of the present address. The Department allowed the application for new registration, but kept the issue of the surrender of the old Registration Certificate in abeyance. The Department has submitted in the reply that it is entitled to take action under Section 14 of the Cenvat Credit Rules, 2004 for the recovery of Cenvat credit wrongly taken by the erroneous refund. Reliance has been placed on the provisions of Rule 9 of the Central Excise Rules, 2002 and upon Notification 35/2001-CE(NT) dated 26 June 2001 and it is submitted that it was necessary for the Petitioners to obtain a fresh registration in respect of the new premises before shifting from the earlier premises and the Petitioners were required to surrender the registration earlier granted to their office to carry on vbc 7 wp6418.11 business from the old premises. In the present case, it was submitted that the Cenvat credit was passed on by the Petitioners by issuing Cenvatable dealer invoices from unregistered premises and hence, the Central Excise authorities would be entitled to take action to recover credit taken on the basis of the invoices issued by the Petitioners from the unregistered premises. It has been stated that the issuance of a show cause notice to the Petitioners for penal action for contravention of Rule 9 is under process. Similarly, it has been stated that the customers of the Petitioners have been issued with show cause notices.

7. Rule 9 of the Central Excise Rules, 2002, provides that every person, who produces, manufactures, carries on trade, holds a private store-room or warehouse or otherwise uses excisable goods, shall get registered. Under sub-rule (2) of Rule 9, the Central Board of Excise and Customs may, by notification and subject to such conditions or limitations as may be specified in the notification, specify the persons or class of persons who may not require such vbc 8 wp6418.11 registration. Sub-rule (3) stipulates that the registration under sub- rule (1) shall be subject to such conditions, safeguards and procedure as may be notified by the Board. In exercise of the powers conferred by Rule 9, the Central Board of Excise and Customs has issued a notification, Notification No.35/2001-CE(NT) on 26 June 2001 (as subsequently amended) to specify the conditions, safeguards and procedures for registration of a person under the Rules. The notification provides that every person specified under sub-rule (1) of Rule 9, unless exempted from doing so by the Board under sub-rule (2), shall get himself registered with the jurisdictional Deputy or Assistant Commissioner of Central Excise by making an application in the form specified in Annexure-I, IA or IB, as the case may be. If the person has more than one premises requiring registration, separate registration has to be obtained for each such premises. However, in certain situations a person who has more than one premises requiring registration may obtain a single registration for all such premises which fall within the jurisdiction of one Commissioner of Central Excise subject to the condition of declaring the details of all such vbc 9 wp6418.11 premises while making an application. Provisions have been made for a transfer of business in which case, the transferee has to get himself registered afresh. Every registered person who ceases to carry on the operation for which he is registered has to deregister himself by making a declaration in the specified form in Annexure-III and by depositing his registration certificate with the Superintendent of Central Excise. On breach of the provisions of the Act or the Rules, a registration certificate may be revoked or suspended.

8. The Rules emphasize the importance of the act of registration. Under Rule 9, it is mandatory for every person who inter alia produces or manufactures excisable goods to get registered. The application for registration inter alia contains a specification of the name and address of the person applying for registration and the details of the premises where the activity proposed is to be carried on. Every person who produces, manufactures, carries on trade in or otherwise uses excisable goods is duty bound to comply with the mandatory requirement of Rule 9.
vbc 10 wp6418.11
9. In the present case, the Petitioners were originally registered in 2002 in respect of the earlier premises. The registration certificate specifically provided that it was valid only for the premises and purposes specified in the application. The registration certificate was not transferable and any application for correction or change therein had to be attested by the Superintendent of Central Excise. Now, under Rule 9 read with the notification, the Petitioners on ceasing to carry on business from the premises for which they were registered were required to make a declaration to that effect and to surrender the registration certificate. Since the Petitioners intended to carry on business from the new premises, they were required to make an application for registration under Rule 9 read with the notification. This has not been disputed by the Petitioners.
10. However, it has been submitted on behalf of the Petitioners that on 8 July 2004, they addressed a letter to the jurisdictional Superintendent of Central Excise recording that they had shifted their office to new premises. The address of the new premises was vbc 11 wp6418.11 mentioned in the aforesaid communication and the Superintendent was requested to make a note of the new address. The Petitioners continued to file their returns on the basis of the erstwhile registration number which was assigned to them in respect of the earlier business premises. As a matter of fact, it has emerged from the record that even the Excise Department continued to treat the Petitioners as being registered under Rule 9(1) and communications were addressed to them at the new premises. Sometime in 2010, when the Petitioners imported a consignment of Borax Pentahydrate an objection was raised by the Excise authorities on the ground that the Petitioners had issued Cenvatable dealer invoices on an erroneous basis that their erstwhile registration would continue to govern the business in the new premises. The Petitioners thereupon applied for a fresh registration on 28 September 2010 and a registration certificate has been issued to them in January 2011.

11. In assessing the facts of this case, it must be noted that in the affidavit in reply that has been filed by the Department, there is vbc 12 wp6418.11 no allegation of any fraud or improper conduct on the part of the Petitioners diverted at excise evasion. Even before the Court, Learned Counsel for the Revenue has not disputed the bona fides of the Petitioners. The Department has, in fact, stated in the affidavit in reply that between 2004 and 2010, the Petitioners have filed nil returns and since there was no revenue impact, there was no occasion for the Revenue to take any action. Counsel appearing on behalf of the Petitioners has submitted that having due regard to the fact that the Petitioners as far back as on 8 July 2004 applied to the jurisdictional Superintendent to make a note of the change in the address of the business premises, the breach, if any, on their part was of a technical or venial nature. We would like to clarify that this Court would not, while interpreting the provisions of Rule 9, place any interpretation thereon which would dilute from the nature or character of the provision. However, the facts of this case show that as a matter of record, there was substantial compliance with the provisions of Rule 9 by the Petitioners having addressed a communication to the jurisdictional Superintendent on 8 July 2004 vbc 13 wp6418.11 furnishing an intimation of the change in the address of the business premises. The most significant aspect is that both the earlier premises as well as the new premises fall with the jurisdiction of the same Superintendent of Central Excise. As we have noted earlier, the notification contemplates that in certain situations, where a person manufactures excisable goods or carries on trade in excisable goods from more than one premises, it would be open to him to obtain a single registration for all premises which falls within the jurisdiction of one Commissioner of Central Excise provided that the details of all the premises are duly declared. Hence, having regard to the fact that there is no allegation in the present case, of any wrong doing or fraudulent conduct on the part of the Petitioners, there appears to have been, if at all, a technical or venial breach. As we have noted earlier, the Petitioners furnished an intimation to the Superintendent of Central Excise on 8 July 2004 and their bona fides have not been doubted in the affidavit in reply.

12. In the circumstances, we are of the view that the ends of vbc 14 wp6418.11 justice would require that a direction be issued to the Second and Third Respondents to consider the case of the Petitioners for the grant of a registration certificate under Rule 9 with reference to the new premises on the basis of the communication addressed by the Petitioners on 8 July 2004. There shall be an order accordingly. As we have noted earlier, the online application which was submitted by the Petitioners on 28 September 2010 has, as a matter of fact, been granted and a fresh registration certificate has been issued in January 2011. This certificate of registration shall, upon orders being passed, relate back to the application which was submitted by the Petitioners on 8 July 2004. The Second and Third Respondents shall take necessary action in accordance with the aforesaid directions.
13. Rule is made absolute in the aforesaid terms. There shall be no order as to costs.
( Dr.D.Y.Chandrachud, J. )
( A.A. Sayed, J. )