LexELECTRONICS CORPORATION OF INDIA LTD. versus UNION OF INDIA & ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2011] 2 S.C.R. 971
ELECTRONICS CORPORATION OF INDIA LTD.
v.
UNION OF INDIA & ORS.
(Civil Appeal No. 1883 of 2011}
FEBRUARY 17, 2011,
[S.H. KAPADIA, CJI, MUKUNDAKAM SHARMA, K.S.
RADHAKRISHNAN, SWATANTER KUMAR AND ANIL R.
DAVE, JJ.]
A
9,
Committees: Inter se litigation between entities of the C
State - Resolution by Committees - Dispute between Public
Sector Undertaking of Central Government and Union of India
- Committees set up by Supreme Court by orders dated
11.10. 1-S.9._1, 7.1.1994, 20.7.2007 - Prayer for recalling these
orders on the ground that the mechanism set up by Supreme
D
Court in its orders had outlived their utility and in view of
changed scenario - Held: The idea behind setting up of the
Committees, initially called "High Power~d Committee~ then
"Committee of Secretaries" and finally "Committee on
Disputes" (CoD) was to ensure that resources of the State are
E
not frittered away in inter se litigations between entities of the
State, which could be best resolved, by an empowered CoD
- The mechanism contemplated was only to ensure that no
litigation comes to court without the parties having had an
opportunity of conciliation before an in-house Committee -
F
; However, despite best efforts of the CoD, the mechanism
could not achieve the results, for which it was constituted, and
had in fact led to delay in litigation causing loss of revenue -
!: Since the mechanism has outlived its utility, the directions
contained in order dated 11.10.1991, 7.1.1994, 20.7.2007 are
recalled.
G
ONGC v. CCE 1995 Suppl.(4) sec 541; ONGC v. CCE
2004 (6) SCC 437; ONGC v. City & Industrial Development
971
972
SUPREME COURT REPORTS
[2011) 2 S.C.R.
A Corpn. 2007 (7) SCC 39; ONGC and Anr. v. CCE 1992 Supp
(2) sec 432; 1995 Supp (4) sec 541 dated 11.10.1991;
(2004) 6 sec 437; (2007) 7 sec 39 - referred to.
Case Law Reference:
B
1995 suppl.(4) sec 541 Referred to
Paras 5, 9
•
c
2004 (6) sec 437
Referred to
Paras 5, 9
2001 (7) sec 39
Referred to
Paras 5, 9
1992 Supp (2) sec 432 Referred to
Para 6
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1883 of 2011.
From the Judgment & Order dated 13.12.2008 of the High
D Court of Andhra Pradesh at Hyderabad in Writ Petition No .
26573 of 2008.
E
WITH
C.A. No. 1903 of 2008.
Goolam E. Vahanvati, AG, P.P. Tripathy, ASG, Arijit
Prasad, Kumal Bahri, D.D. Karnath, Rohit Sharma, Amey
Nargolkar, B.V. Balaram Das, Anil Katiyar, Rupesh Kumar,
Parijat Sinha, Reshmi Rea Sinha, Anil Kumar Mishra, Vikram,
F Ganguly, S.C. Ghosh, B. Krishna Prasad, E.C. Agrawala for the
appearing parties.
G
H
The Order of the Court was delivered by
ORDER
S.H. KAPADIA, CJI. 1. Leave granted.
2. Electronics Corporation of India Ltd. ("assessee" for
short) is a Central Government Public Sector Undertaking
("PSU"). It is registered as a Government Company under the
ELECTRONICS CORPORATION OF INDIA LTD. v.
973
l,JNION OF INDIA & ORS. [S.H. KAPADIA, CJI.]
Companies Act, 1956. It is under the control of Department of
A
Atomic Energy, Government of India. A dispute had been
raised by the Central Government (Ministry of Finance) by
issuing show cause notices to the assessee alleging that the
Corporation was not entitled to avail/utilize Modvat/Cenvat
Credit in respect of inputs whose values stood written off.
B
Accordingly it was proposed in the show cause notices that the
credit taken on inputs was liable to be reversed. Thus, the short
point which arose for determination in the present case was
whether the Central Government was right in insisting on
reversal of credit taken by the assessee on inputs whose values c
stood written off.
3. The adjudicating authority held that the.re was no
. substance in the contention of the assessee that the write off
was made in terms of AS-2. The case of the assessee before
the Commissioner of Central Excise (adjudicating authority)
D
was that it was a financial requirement as prescribed in AS-2;
that an inventory more than three years old had to be written
off/derated in value; that such derating in value did not mean
that the inputs were unfunctionable; that the inputs were stilUying
in the factory and they were useful for production and therefore
E
they were entitled to Modvat/Cenvat credit. As stated above,
this argument was rejected by the adjudicating authority and the
demand against the assessee stood confirmed. Against the
order of the adjudicating authority, the assessee decideExcerpt shown. Read the full judgment & AI analysis in Lexace.