2013 (8) TMI 951 - HC - Central Excise

Summary

Issues Involved:
1. Validity of impugned show cause notices and orders.
2. Exemption under Notification No. 121/94-CE.
3. Maintainability of the writ petition under Article 226.
4. Procedural errors and violation of natural justice.

Summary:

1. Validity of Impugned Show Cause Notices and Orders:
The petitioner challenged the impugned show cause notices dated September 5, 1994, January 30, 1995, April 3, 1995, June 26, 1995, September 18, 1995, April 3, 1997, and March 28, 1996, as well as the order passed by the Joint Commissioner, Central Excise, Haldia on November 30, 2005, and the Appellate Authority's order dated May 25, 2008. The petitioner argued that the mill was managed on a conversion basis and that duty exemptions were claimed under Notification No. 121/94-CE dated August 11, 1994, for captive consumption of jute inputs in the manufacture of finished goods.

2. Exemption under Notification No. 121/94-CE:
The petitioner claimed duty exemption on intermediate jute products during February 1995 to February 1997 under Notification No. 121/94-CE. The Joint Commissioner, however, confirmed the demand for duty and imposed penalties, stating that the stitching unit was outside the factory premises and thus not eligible for the exemption. The petitioner argued that the decision was contrary to the law laid down by the Hon'ble Apex Court, which allows for subsequent compliance with Rule 56(a) to avail of the benefits.

3. Maintainability of the Writ Petition under Article 226:
The petitioner contended that the writ petition is maintainable as the respondent did not follow the accepted rules of procedure. The petitioners were advised that their only remedy was to file an application under Article 226 of the Constitution of India, challenging the legality and validity of the show cause notices and orders. The Hon'ble Apex Court in State of UP vs. Mohammed Nooh held that a litigant who has lost his right of appeal by no fault of his own may obtain a review by certiorari.

4. Procedural Errors and Violation of Natural Justice:
The petitioner argued that the Joint Commissioner did not consider the relevant provisions under Rule 174(9) and relevant notifications, making an assessment in violation of rules and procedures. The Court found that the present management had no knowledge of previous proceedings and that the Joint Commissioner failed to consider the petitioner's application for inclusion of the stitching unit. The Court held that this was a fit case to issue a writ in exercise of certiorari jurisdiction.

Conclusion:
The Court set aside the impugned order and directed the petitioner to deposit Rs. 10 lakhs before the appropriate authority within three weeks. The Joint Commissioner, Central Excise, was instructed to reconsider the case on merit, affording an opportunity of hearing to the petitioner within six weeks from the date of deposit. If the petitioner fails to deposit the amount, the order under challenge would revive, and the respondents would be entitled to recover the demand.