2014 (5) TMI 170 - HC - Central Excise

Maintainability of appeal - the question as to whether any goods are excisable or not - Held that - Section 35G(1) provides, among other things, that an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal. The precedents noted above are rendered dilating on the concept of the term rate . The question whether any particular transaction or goods is excisable is an issue directly linked to the question as to what would be the rate of duty of excise. If it is not liable for levy of excise duty, then it would be a case of 0% or nil . The question of coverage is, thus, a matter intrinsically linked with the determination of questions having a relation to the rate of duty of excise. Not only that, the phrase any question having a relation to the rate of duty of excise is part of the exclusionary clause in Section 35G(1). Reverting to Section 35L, we notice that clause (b) thereof provides for an appeal to the Supreme Court from any order passed by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of excise. This means that anything attendant to the determination of any question having a relation to the rate of duty of excise would also fall within the trappings of the exclusion, thus, taking the jurisdiction away from the High Court; to be agitated before the Supreme Court in terms of Section 35L - there will be no situation of conflict of opinions between the different High Courts on any issue referable to the question of coverage - Appeals are not maintainable - Decided against Revenue.

Issues:
Maintainability of appeals against the order of the Appellate Tribunal under the Central Excise Act, 1944.

Detailed Analysis:

Issue 1: Maintainability of Appeals
The Respondent raised a preliminary objection regarding the maintainability of the appeals filed against the order of the Appellate Tribunal under the Central Excise Act, 1944. The argument presented was that the questions of law sought to be raised in the appeals fell within the exclusion carved out in sub-section (1) of Section 35G of the Act. The Respondent referred to various legal precedents to support the argument that orders of the Tribunal related to the determination of questions concerning the rate of duty of excise, which would be excluded from the purview of an appeal to the High Court under Section 35G.

Issue 2: Interpretation of Section 35G
The Appellant argued that the order of the Tribunal was perceived as perverse and amounted to overreaching the findings of a judgment rendered by the Division Bench of the Court. The Appellant contended that Section 35G provided for a comprehensive appeal, except in matters related to the rate of duty of excise or the value of goods for assessment purposes. The Appellant emphasized that the question of whether a particular transaction or bundle of facts could be brought as excisable under the Act should not be excluded under Section 35G.

Issue 3: Exclusion of Jurisdiction
The Court analyzed the precedents cited in support of the objection to maintainability and found that the exclusion of jurisdiction under Section 35G was intended to prevent conflicts of opinions between different High Courts on matters of national impact in the fiscal scenario. The Court emphasized that the determination of whether goods are excisable or not falls within the exclusion in Section 35G(1), as it is directly linked to the rate of duty of excise. The Court highlighted that the phrase "any question having a relation to the rate of duty of excise" formed part of the exclusionary clause in Section 35G(1).

Issue 4: Jurisdiction of High Courts and Supreme Court
The Court delved deeper into the classification of jurisdiction, noting that the rate of tax is prescribed by Parliament and is not subject to judicial interference. The Court reasoned that if High Courts were allowed to decide on the levy of excise duty, it would limit the Supreme Court's role to determining only the rate of tax and the value of goods for assessment, which the Court deemed inferior in content compared to questions of coverage. The Court concluded that the Act did not envision High Courts having the power to decide on coverage, leaving the Supreme Court with issues related to rates.

Issue 5: Conflict of Opinions
The Appellant argued that since the rate of duty is uniform across India, there would be no conflict of opinions between different High Courts on issues related to coverage. However, the Court disagreed with this submission based on the conclusion it reached regarding the maintainability of the appeals.

Conclusion
The Court rejected the appeals as not maintainable, granting the Appellant the liberty to approach the Supreme Court of India under Section 35L of the Act for further recourse.

This detailed analysis of the judgment from the Kerala High Court provides a comprehensive overview of the issues involved, the arguments presented by the parties, and the Court's reasoning leading to the final decision on the maintainability of the appeals under the Central Excise Act, 1944.

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