2005 (3) TMI 491 - HC - Central Excise

Writ petition appellate authority has no power to remand / remit the matter - The assessee filed a writ petition in the high court submitting that going in appeal would be a empty formality as the tribunal had no power to remit the case and that it was denied Photostat copies of certain documents, which were seized by the Department. Held that - Absence of the power to remit the matter alone cannot precisely be the sole consideration to support the contention that filing of appeal becomes an empty formality when the appellate authority deal with the matter effectively by affording every opportunity. petition dismissed

Issues:
1. Challenge to adjudication order and detention order.
2. Allegations of affecting clearances without payment of excise duty.
3. Violation of principles of natural justice regarding document submission.
4. Legitimacy of maintaining a writ petition despite alternative appeal remedy.
5. Power of appellate authority to remit matter for fresh consideration.

Issue 1: Challenge to adjudication order and detention order
The petitioner, a public limited company engaged in manufacturing cotton yarn, sought to challenge an adjudication order dated 24-12-2004 and a consequential detention order dated 7-2-2005 passed by the authorities. The company faced allegations of affecting clearances without paying excise duty on cotton yarn and cotton waste cleared to the domestic tariff area. The petitioner contended that the authorities failed to provide relevant documents seized during inspection, leading to a violation of natural justice principles.

Issue 2: Allegations of affecting clearances without payment of excise duty
The Department accused the petitioner of exceeding the permitted limit for clearing goods under the domestic tariff area scheme, resulting in revenue loss due to non-payment of excise duty. The petitioner claimed to have sought permission for excess clearances, which was pending consideration. The show cause notices issued demanded payment of excise duty and penalties for the excess clearances made by the petitioner.

Issue 3: Violation of principles of natural justice regarding document submission
The petitioner argued that the authorities denied the request for relevant documents necessary for its defense, leading to a violation of natural justice. The adjudication authority rejected the request for documents, stating they were not relevant and sought at the last minute to delay proceedings. The petitioner contended that the refusal to provide documents affected its ability to present a robust defense, thereby questioning the validity of the impugned order.

Issue 4: Legitimacy of maintaining a writ petition despite alternative appeal remedy
Despite having an alternative remedy of filing an appeal, the petitioner maintained a writ petition challenging the adjudication and detention orders. The petitioner argued that the appeal process would be futile as the appellate authority lacked the power to remit the matter for fresh consideration, hindering the submission of crucial documents necessary for a fair adjudication.

Issue 5: Power of appellate authority to remit matter for fresh consideration
The petitioner contended that the appellate authority's inability to remit the matter for fresh consideration rendered the appeal process ineffective. However, the court held that the appellate authority could provide post-decisional opportunities for document submission and draw adverse inferences if necessary. The court emphasized that the absence of power to remit the matter did not invalidate the appeal process, and the petitioner was expected to exhaust the appeal remedy before seeking extraordinary relief under Article 226 of the Constitution of India.

In conclusion, the court dismissed the writ petition, stating that the petitioner failed to establish a clear violation of natural justice or illegality in the adjudication process. The court emphasized the importance of exhausting the appeal remedy and allowing the appellate authority to consider the case on its merits.

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