2012 (1) TMI 160 - HC - Central Excise

Summary

Issues Involved:
1. Maintainability of the writ petitions challenging the show cause notices.
2. Jurisdiction of the authority issuing the impugned show cause notices.
3. Alleged discrimination against the petitioner.
4. Compliance with the principles of natural justice.
5. Examination of disputed facts and merits of the case.

Summary:

1. Maintainability of the Writ Petitions:
The respondents raised a preliminary objection on the maintainability of the writ petitions at the stage of show cause notices. The court emphasized that the proceedings under Article 226 of the Constitution are not a substitute for responding to the show cause notices. The court referred to the Supreme Court's decision in *Special Director v. Mohd. Ghulam Ghouse*, which discouraged entertaining writ petitions against show cause notices unless they are totally non est in the eye of law for absolute want of jurisdiction. The court upheld the respondents' preliminary objection and dismissed the writ petitions as not maintainable at this stage.

2. Jurisdiction of the Authority:
The petitioner contended that the impugned notices issued u/s 3A of the Central Excise Act, 1944, and the relevant rules were beyond the jurisdiction of the authority. The court noted that the impugned show cause notices were issued based on prima facie material and relevant facts. The court held that it is not its business to sit on appeal on such decisions and that the petitioner should respond to the notices, raising all grounds including jurisdictional issues.

3. Alleged Discrimination:
The petitioner argued that they were being discriminated against as other similarly placed manufacturers were being charged based on the actual number of packing machines, whereas the petitioner was being charged on the basis of deemed number of machines. The court did not find merit in this argument at this stage and suggested that the petitioner raise this issue before the adjudicating authority.

4. Compliance with the Principles of Natural Justice:
The court observed that the impugned show cause notices were issued in compliance with the principles of natural justice, providing the petitioner with an opportunity to respond to the allegations. The petitioner was asked to meet the queries raised in the notices and produce relevant documents in their defense.

5. Examination of Disputed Facts and Merits of the Case:
The court noted that disputed facts were involved in the writ petitions, which could not be resolved by making a roving enquiry in the writ jurisdiction. The court held that such disputed questions of fact should be resolved by the adjudicating authority. The court emphasized that the allegations in the show cause notices required adjudication on investigation of the disputed facts and that the initiation of the proceeding could not be said to be unauthorized or without jurisdiction.

Conclusion:
The court dismissed both writ petitions, directing the petitioner to respond to the impugned show cause notices and allowing the adjudicating authority to decide the matter appropriately and strictly in accordance with law and facts involved. The court clarified that it had not touched the merits of the case of either party.