2011 (8) TMI 600 - HC - Central Excise

Waiver of pre deposit - Jurisdiction of the high court - Held that - question determining rate & value of duty are to be heard before supreme court cannot be a ground to hold that the appeal against the order of pre-deposit would also be maintainable before the Apex Court. In view of Navin Chemicals Mfg & Trading Co (1993 (9) TMI 107 - SUPREME COURT OF INDIA), pre-deposit order passed by CESTAT cannot be said to have direct and proximate relationship to the rate of duty/to the value of goods. Levy of duty of excise on jute carpets - In Commissioner of C. Ex., Bhubaneswar-1 v. Champdany Industries Ltd., (2009 (9) TMI 7 - SUPREME COURT OF INDIA) relying upon Rule 3 of Central Excise Rules, the Supreme Court held that dominant intention in the rule specifically, clause (a) thereof is that the heading which provides the most specific description shall be preferred to the heading providing a more general description. Following this interpretation in paragraph-46 of the judgment it was held that the goods manufactured by the respondent-company are to be classified as jute carpet floor coverings. We are surprised to find that the Customs, Excise & Service Tax Appellate Tribunal has, in the present case having considered the foresaid judgments, which in our view cover the question, went on to distinguish the judgment both on question of facts as well as interpretation of Rule 3, and held that the appellant does not have a strong prima facie case for consideration of the application for waiver. After going through the judgment of the Supreme Court and facts obtained in the case we are unable to find any distinction, whatsoever. - Stay granted.

Summary

Issues:
1. Maintainability of Central Excise Appeal in High Court under Section 35-G of the Central Excise Act, 1944.
2. Interpretation of the expression "determination of any question having a relation to the rate of duty or to the value of goods for the purposes of assessment" as per Supreme Court judgments.
3. Prima facie assessment of appeal based on relevant case laws.
4. Judicial discipline and application of Supreme Court judgments by the Customs, Excise & Service Tax Appellate Tribunal.

Issue 1: Maintainability of Central Excise Appeal in High Court under Section 35-G:
The appellant argued that the appeal related to the waiver of pre-deposit for hearing the appeal by the Customs, Excise & Service Tax Appellate Tribunal and was maintainable in the High Court under the proviso to Section 35-F as it did not raise any question relating to the rate of duty or the value of goods for assessment. Citing the Supreme Court judgment in Navin Chemicals Mfg. & Trading Co. Ltd v. Collector of Customs, it was contended that appeals not directly related to the rate of duty or value of goods could be heard by the High Court under Section 35-C.

Issue 2: Interpretation of the expression "determination of any question having a relation to the rate of duty or to the value of goods for the purposes of assessment":
The Supreme Court judgments provided a detailed interpretation of the expression, emphasizing a direct and proximate relationship to the rate of duty or value of goods for assessment. The judgments clarified that questions regarding the rate of duty, valuation of goods, classification of goods, or exemption notifications fell within the ambit of this expression. The judgments highlighted the importance of Special Benches for cases directly impacting importers and the wide application of decisions in such matters.

Issue 3: Prima facie assessment of appeal based on relevant case laws:
The High Court, based on the cited judgments, concluded that appeals not involving the rate of duty or value of goods for assessment could be heard under Section 35-C. The Court analyzed the facts of the case, including the issue of excise duty levied on jute carpets, and found that the Tribunal's decision to distinguish relevant Supreme Court judgments was unfounded. The Court expressed surprise at the Tribunal's failure to recognize the applicability of the judgments and stayed the effect of the Tribunal's order, directing the appeal to be heard without insisting on pre-deposit.

Issue 4: Judicial discipline and application of Supreme Court judgments by the Tribunal:
The High Court criticized the Tribunal for failing to apply relevant Supreme Court judgments to the case at hand. The Court found that the Tribunal's distinctions on both factual and legal grounds were unjustified and amounted to a breach of judicial discipline. The Court emphasized the importance of consistency in applying legal precedents and directed the Tribunal to reconsider the appeal in light of the Supreme Court judgments.

In conclusion, the High Court's detailed analysis of the maintainability of the appeal, interpretation of legal expressions, assessment of relevant case laws, and criticism of the Tribunal's application of Supreme Court judgments highlighted the importance of legal consistency and adherence to established precedents in judicial decisions.