2013 (1) TMI 225 - HC - Central Excise

Rebate claim - excise duty paid on goods procured from manufacturers initially for home consumption but subsequently exported - Commissioner (Appeals)allowed the rebate claim - Commissioner Central Excise, Delhi-II being dissatisfied directed the Asst. Commissioner (Tech.) to file a revision application before the Central Government in terms of Section 35EE(1A) - Held that - It is open to an assessee who feels aggrieved by an order passed by the Central Government under section 35EE to strain every nerve to challenge the same in appropriate proceedings, that is only a constitutional means of seeking redress. But that is not true in the case of an order of the Central Government passed under section 35EE which is sought to be challenged by the Central Government itself i.e., the authorities executing the Act, which is a central Act. There is an inherent impossibility or contradiction in countenancing such a view, in addition to fostering indiscipline and chaos in the administration of the Act.The respondent is right in relying on sub-sections (5) and (6) of section 35EE to point out that in case the Central Government suo motu decides to issue notice to the assessee to enhance the penalty or fine or duty and after hearing the assessee decides to drop the proceedings, no grant of any opportunity to the Commissioner of Central Excise or any other officer executing the Act is envisaged. This shows that if the Central Government is of the view that the order of the Commissioner (Appeals) is legal and proper and requires no interference (by way of enhancement of duty, fine or penalty), there is no right conferred upon the Commissioner of Central Excise to challenge the decision to drop the proceedings. If the Commissioner of Central Excise chooses to take the appeal route against the order of the Commissioner (Appeals) to the CESTAT, he may lawfully pursue his challenge right up to the Supreme Court. But if he chooses to take the revisionary route and question the legality and propriety of the order of the Commissioner (Appeals) before the Central Government under section 35EE, he must, if the decision of the Central Government goes against him, accept it as final. The section does not recognise any grievance that the Commissioner may nurse against the decision of the Central Government. In short, the Commissioner of Central Excise cannot claim to be more loyal than the King

Summary

Issues:
1. Maintainability of the writ petition challenging the order passed by the Central Government under section 35EE of the Central Excise Act, 1944.

Analysis:
The case involved a dispute regarding rebate claims under Rule 18 of the Central Excise Rules, 2002 by a merchant-exporter. The Assistant Commissioner initially allowed the rebate claims, but the Commissioner, Central Excise, Delhi-II reviewed the decision and directed appeals to the Commissioner (Appeals), who upheld the benefit given to the exporter. Dissatisfied, the Commissioner, Central Excise, Delhi-II filed a revision application before the Central Government, which dismissed the application after detailed examination. The writ petition was filed challenging the Central Government's revision order under section 35EE of the Act.

The respondent raised a preliminary objection that neither the Assistant Commissioner nor the Union of India could challenge the Central Government's revision order. The Court analyzed the provisions of section 35EE, emphasizing that the Central Government acts as the revisionary authority, and its decision is final. The Court held that a functionary of the Central Government cannot question the Central Government's order passed under section 35EE, as it would lead to an inherent contradiction and chaos in the administration of the Act.

The Court referred to a decision by the Nagpur Bench of the Bombay High Court, which recognized the quasi-judicial nature of the order under section 35EE but did not address the issue of the Central Government challenging its own order. The Court concluded that the Central Government cannot be both the author of the decision and the aggrieved party, thus upholding the respondent's preliminary objection. The Court clarified that it did not delve into the merits of the case but dismissed the writ petition, emphasizing the finality of the Central Government's revision order under section 35EE.

In essence, the Court's analysis focused on the interpretation of the statutory provisions, the nature of the Central Government's role as a revisionary authority, and the principle that a government functionary cannot challenge the Central Government's own order, ultimately leading to the dismissal of the writ petition challenging the Central Government's revision order under section 35EE of the Central Excise Act, 1944.