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M/S Bombay Dyeing & Mfg. Co. Ltd. v. Commissioner of Central Excise

Civil Appeal · 2019 INSC 1338Decided 9 Dec 2019
Civil Appeal No. 5297 of 2008
Justice A.M. Khanwilkar · Justice Dinesh Maheshwari

Background

The appellant, a composite textile mill, argued that yarn produced at an intermediate stage for its own further processing into fabric (captive consumption) should not attract excise duty, since it was not removed for sale. Relying on a Delhi High Court precedent, the appellant filed writ petitions before the Delhi High Court challenging excise circulars and notices, and during the pendency of those petitions obtained interim protection by voluntarily executing bonds (Form B-13) and continuing to file monthly RT-12 returns, which were endorsed as being on a "provisional assessment" basis. After the legal position on captive-consumption duty was later settled against the appellant's position, the question arose whether the earlier assessments could still be treated as "provisional," since no single formal order had explicitly declared them so.

Decision Breakdown

The Supreme Court held that although no specific order formally designated the assessments as "provisional," the appellant had voluntarily submitted to the provisional assessment procedure under Rule 9B of the Central Excise Rules by executing bonds and filing endorsed returns in order to secure interim relief from the High Court, and could not now disown that very process to claim a limitation or procedural benefit. Invoking the principle that a party cannot "approbate and reprobate" (accept the benefit of a course of action while later denying its legal character), the Court held the appellant was bound by the consequences of the provisional assessment regime it had itself invited. Distinguishing the precedents cited by the appellant requiring a specific provisional-assessment order, the Court dismissed the appeal with no order as to costs.

Lesson Learnt

A party cannot take advantage of a legal process (such as executing bonds to get interim relief under a "provisional assessment" procedure) and later argue, when it becomes inconvenient, that the process never formally applied to them: the law does not allow a litigant to approbate and reprobate.

Official source (sci.gov.in)View Judgment (PDF)

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