ASSISTANT COLLECTOR OF CENTRAL EXCISE, CHANDAN NAGAR, WEST BENGAL versus DUNLOP INDIA LTD. AND ORS.

Citation: [1985] 2 S.C.R. 190 · Decided: 30-11-1984 · Supreme Court of India · Bench: O. CHINNAPPA REDDY · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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B 
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190 
ASSISTANT COLLECTOR OF CENTRAL EXCISE, 
CHAND~N NAGAR, WEST BENGAL 
v. 
DUNLOP INDIA LTD. AND ORS. 
No1ember 30, 1984 
[0. CHINNAPPA REDDY, A. P. SEN AND E. S. VENKATARAMIAH, JJ.] 
Constitution of India 1950, Articles 226 and 141 
Interim orders in writ petition-Grant of-Situations and circuffistances-
What are-Matters involving public revenue-Not sufficient showing a prima facie 
case-Furnishing of bank guarantee not a clrcum1tance-Balance of convenience ta 
be in favour of grant of interim order-Likelihood of prejudice to public interest 
to be shown. 
Supreme Co11rt decisions binding on all Courts-Judgment per incuriam-
D 
Prlnclple of-High Court not entitled ro disregard Judgment of' Supreme Court 
labelling it per incur/am. 
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The Government of India by a notification dated April 6, 1984, exempted 
tyres from a certain percentage of Excise Duty to the extent that the manu· 
facturers had not availed themselves of the exemption grant~d under certain 
other earlier notifications. 
The Customs and Excise Department was of the view that the Respon· 
dent.company who was a manufacturer of Tyres, Tubes and various other 
rubber products was not entitled to the aforesaid exemption as it had cleared 
the goods earlier without paying Central Excise Duty but on furnishing Bank 
Guarantees under various interim-orders of cou.rts. 
The Company claimed the benefit of exe~ption to the tune of about Rs. 
6 crores and filed a Writ Petition in the High Court and sought an interim order 
restraining the Central Excise authorities from the levy and coUection of excise 
duty. The High Court held that a prima facie case had been made out in favour 
of the company and by an interim order allowed the benefit of the exemption 
to the tune of about Rs. 2 crores and directed that the goods be released on 
furnishing a Bank Guarantee. 
In the Department's appeal, the Division Bench confirmed the above 
order with a slight modification to the effect that the Collector of Central Excise 
could encash 30 per cent of the Bank Guarantee. 
Allowing the appeals by the Department, this Court, 
HELD ; I. The orders of the Single Judge as well as the Division Bench 
ff 
are wholly unsustainable an4 sqoqlq never have l>Qen 111•4e. Eveq assuminf the 
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A.C. CENTRAL EXCISE V. DUNLOP LTD. 
191 
company had established a prima facie case, it was not a sufficient justification 
for granting the said interim orders. There was no question of any balance of 
convenience being in favour of the respondent-Company, it was certainly in 
favour of the Government of India. [20IB-CJ 
2. Governments are not r .. n on mere Bank Guarantees. Very often some 
courts act as if furnishing a Bank Guarantee would meet the ends of justice. 
No Governmental business, for that matter no business of any kind can be run 
on mere Bank Guarantees. Liquid cash is necessary for the running of a 
Government as indeed any enterprise. [201C[ 
3, Where matters of public revenue are concerned, it is of utmost impor-
tance that interim orders are not to be granted merely because a prima facie 
case has been shown. More is required. The balance of convenience must be 
clearly in favour of the making of an interim order and there should not be the 
slightest indication of a likelihood of prejudice to the public interest. [20JDJ 
4. Article 226 is not meant tg short circuit or circumvent statutory pro-
cedures. It is only where statutory remedies are entirely ill-suited to meet tbt 
demands of extraordinary situations, as for iastance where the very vires of the 
statute is in question or where private or public wrongs are so inextricably 
mixed up and the prevontion of public injury and the vindication of public 
justice require it, that recourse may be had to Art. 226. 
The Court must also 
have good and sufficient reason to by.pass the alternative remedy provided by 
statute. Matters involving the revenue where statutory remedies are available 
are not such matters. The vast majority of the petitions under Art. 226 are 
filed solely for the purpose of obtaining interim orders and thereafter to prolone 
the proceedings by one device or the other. This practice needs to be strongly 
discouraged. [194F-H ; J95A] 
5. There are, cases which demand that interim orders should be made in 
the interests of ju~tice. Where gross violations of the law and injustices are 
about to be, or are perpetrated, it is the bounden duty of the court to intervene 
and give appropria

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