2012 (4) TMI 64 - HC - Central Excise

Writ petition - alternative remedy to file an appeal - demand of duty of excise on an amount written off representing advances towards dies and tools - held that - the petitioner company ought to have availed the appellate remedy, by filing an appeal before the Commissioner (Appeals), Chennai. However, the petitioner has chosen to prefer the present writ petition before this Court, under Article 226 of the Constitution of India, without showing proper cause or reason to do so. - it would be open to the petitioner company to file an appeal before the Commissioner (Appeals) Chennai, by raising all the grounds available to it, as per law, within a period of thirty days from the date of receipt of a copy of this order.

Summary

Issues:
1. Excise duty demand on tooling advance written off by the petitioner company.
2. Consideration of principles of natural justice and relevant legal provisions in passing the order.
3. Discrepancy in decisions by different authorities on similar issues.
4. Availability of alternative remedy and jurisdiction of the High Court under Article 226 of the Constitution of India.

Issue 1: Excise Duty Demand
The petitioner company, engaged in manufacturing automobile parts, had developed tools involving high costs. Due to the cancellation of orders by the client, the client compensated the tooling cost, leading to a write-off by the petitioner company. The Central Excise issued a show cause notice demanding excise duty on the tooling advance written off. The petitioner contested the demand, arguing no intention to evade duty and limitation on the notice.

Issue 2: Compliance with Legal Principles
The Commissioner of Central Excise (Appeals) remanded the matter for fresh consideration, emphasizing adherence to natural justice principles and a specific tribunal judgment. However, the subsequent order by the first respondent was challenged for not considering the tribunal judgment and principles laid down by higher authorities, alleging arbitrariness and violation of legal principles.

Issue 3: Discrepancy in Decisions
The petitioner highlighted the disparity in decisions by different Central Excise authorities on similar issues, questioning the inconsistency and differing stands taken by authorities from different regions. The respondent defended the order, arguing it was in line with legal provisions and aimed at preventing revenue loss, justifying the excise duty recovery.

Issue 4: Alternative Remedy and Jurisdiction
The High Court emphasized the importance of availing the statutory appellate remedy before filing a writ petition under Article 226 of the Constitution. Despite various grounds raised by the petitioner, the court dismissed the writ petition due to the availability of an alternative remedy. The petitioner was directed to appeal before the Commissioner (Appeals) within a specified timeframe, ensuring all grounds are raised and considered in due process.

This judgment delves into the complexities of excise duty demands, compliance with legal principles, discrepancies in decisions by different authorities, and the importance of availing alternative remedies before seeking extraordinary jurisdiction from the High Court. The case underscores the significance of following due process and exhausting statutory remedies before resorting to writ petitions, ensuring a fair and comprehensive adjudication of disputes in the realm of excise law.