2010 (2) TMI 699 - SC - Central Excise

Compounded Levy Scheme - Notification No. 16/2001-C.E. (N.T.), dated 30-4-2001 - It is true that power of the High Court to issue prerogative writs under Article 226 of the Constitution is plenary in nature and cannot be curtailed by other provision of the Constitution or a Statute but the High Courts have imposed upon themselves certain restrictions on the exercise of such power - in the instant case centred around valuation of plant and machinery as also inclusion or non-inclusion of certain machines, in use or not or in working condition or not, which are primarily questions of fact - Appeal is allowed

Summary

Issues involved:
Appeal against denial of benefit under Compounded Levy Scheme due to valuation of plant and machinery exceeding specified limit; High Court's jurisdiction under Article 226 challenged; Availability of alternative remedy before CESTAT questioned.

Analysis:

1. Benefit under Compounded Levy Scheme:
The case involved appeals against the denial of benefits under the Compounded Levy Scheme due to the valuation of plant and machinery exceeding the specified limit. The High Court set aside the orders denying the benefit to the assessee, holding that the Revenue failed to displace the opinion of the assessee's Chartered Accountant. The Commissioner concluded that certain machines were excluded from the special procedure and that the investment value exceeded the prescribed limit. The assessee challenged this decision through a writ petition.

2. High Court's Jurisdiction under Article 226:
The appellants contended that the High Court erred in exercising jurisdiction under Article 226, as the issues involved factual determinations regarding valuation and inclusion of machines. They argued that since an alternative remedy before the CESTAT was available, the writ petition should have been dismissed. The Supreme Court acknowledged the plenary nature of Article 226 but emphasized the restriction on its exercise when an effective alternative remedy exists. The Court referred to precedents highlighting the discretionary nature of excluding writ jurisdiction based on the availability of alternative remedies.

3. Availability of Alternative Remedy before CESTAT:
The Supreme Court agreed with the appellants that the High Court's exercise of writ jurisdiction was unwarranted in this case. The controversy primarily revolved around factual questions related to the valuation of plant and machinery and the inclusion of certain machines. Considering this, the Court allowed the assessees to file appeals before the CESTAT against the Commissioner's orders. The Court directed the CESTAT to entertain the appeals, condone any filing delays, and dispose of the appeals promptly according to the law.

In conclusion, the Supreme Court allowed the appeals, set aside the impugned orders, and granted permission for the assessees to appeal before the CESTAT. The Court emphasized the discretionary nature of writ jurisdiction and the importance of factual considerations in determining the appropriate legal recourse.