2015 (11) TMI 321 - HC - Central Excise

Exemption under the levy of central excise as per Notification Nos.63/95 dated 16.03.1995 - whether the petitioner is ex facie entitled to exemption under Notification Nos.63/95 dated 16.03.1995 and 4/2006 dated 01.03.2006, have been overlooked - Held that - Petitioner was issued with a show cause notice dated 26.12.2014 by the Commissioner of Central Excise, Tirunelveli, to show cause as to why the products viz., Ilemenite, Zircon, Rutile, Sillimanite, leucoxene manufactured out of sea sand (ore) and cleared the same during the period from 01.03.2011 to 31.03.2014 should not be classified as concentrates of Ilemenite, Zircon, Rutile, Sillimanite, leucoxene under chapter sub heading 26140020, 26151000, 26060090 and 26140090 of CETA respectively, within 30 days from the date of receipt of the same. - petitioner has given a representation dated 01.04.2015 to the respondents giving the details of the documents to be furnished as per the order passed on 10.03.2015 and sent a reminder on 05.05.2015, however all of a sudden, to their surprise, the impugned letter dated 12.05.2015 was issued informing the petitioner that it is not reasonable to call for the documents which are not cited as relied upon documents in the show cause notice, on that basis, the petitioner was asked to submit his explanation, hence, the petitioner came to this court challenging the impugned communication dated 12.05.2015 raising two issues that in spite of a specific direction given by this court in other decision to furnish all the relevant documents which are relied on in the show cause notice, the respondent failed to furnish the same, as a result, the petitioner is neither able to give reply nor able to raise the basic and preliminary issue whether the Central Excise Department has jurisdiction to assess and levy central excise from the petitioner in view of notification No.63/95 granting full exemption to the petitioner s mine from the application of the Act. In the judgment of the ESI Court at Tirunelveli in ESIOP.No.8/2012 that the petitioner comes under the purview of the Mines Act and their activities are mining activity, hence, it is necessary for the respondents to decide the preliminary issue whether the petitioner is entitled to exemption under Notification Nos.63/95 dated 16.03.1995 and 4/2006 dated 01.03.2006 for the reason that para 17(11) of the notification states that mine has meaning given in Section 2(i)(j) of the Mines Act, 1952 and as per Section 2(i)(j) the word mine includes not only the mine area, but also the place where sand is processed, the place where the workshops are located and any adjacent premises. 27. Similarly, another notification No.4/06 dated 01.03.20006 also exempts all ores from the levy of central excise. In this context, it is pertinent to refer to various orders and judgments of both civil and criminal courts, holding that all the units of the petitioner firm are coming within the definition of mine Impugned order dated 12.05.2015 informing the petitioner that it is not reasonable to call for the documents which are not cited as relied upon documents in the show cause notice dated 26.12.2014, is partly set aside - Decided partly in favour of assessee.

Issues Involved:
1. Furnishing of documents relied upon in the show cause notice.
2. Jurisdictional issue regarding the applicability of exemption notifications.
3. Allegations of bias and mala fide actions by the respondents.
4. Compliance with court directions.

Detailed Analysis:

1. Furnishing of Documents Relied Upon in the Show Cause Notice:
The petitioner challenged the impugned letter dated 12.05.2015 issued by the Assistant Commissioner of Central Excise, which refused to provide documents not cited in the show cause notice dated 26.12.2014. The petitioner argued that the refusal to furnish these documents hindered their ability to provide an effective reply. The court had previously directed the respondent to furnish all relevant documents relied upon in the show cause notice. Despite this, the petitioner claimed that not all documents were provided, leading to the current writ petition. The court reiterated that no enquiry could be fair without providing all requisite documents and directed the respondents to furnish the documents sought by the petitioner in their letter dated 05.05.2015.

2. Jurisdictional Issue Regarding the Applicability of Exemption Notifications:
The petitioner contended that their mining activities were exempt from central excise under Notification Nos. 63/95 and 4/2006. The court emphasized that jurisdictional issues must be decided first, as they go to the root of the matter. The court referred to previous judgments and decrees that had recognized the petitioner's activities as mining, thus falling under the exemption. The court directed the respondents to determine the preliminary issue of whether the petitioner's activities were exempt from central excise, following a personal hearing within four weeks.

3. Allegations of Bias and Mala Fide Actions by the Respondents:
The petitioner alleged that the proceedings were initiated due to a complaint against a Central Excise officer, Raja Climax, and that the actions were influenced by bias and malice. The respondents denied these allegations, stating that the relationship between the officer and the respondent was purely professional. The court did not delve deeply into these allegations but focused on ensuring compliance with procedural fairness and previous court orders.

4. Compliance with Court Directions:
The court noted that despite its previous orders, the respondents had not fully complied with the directions to furnish all relevant documents and decide the preliminary jurisdictional issue. The court emphasized the need for strict compliance with its orders and directed the respondents to provide the documents and decide the jurisdictional issue expeditiously.

Conclusion:
The writ petition was partly allowed. The respondents were directed to provide the documents requested by the petitioner and to determine the preliminary issue of jurisdiction regarding the exemption from central excise. The court's interim order dated 08.07.2015 was made absolute, reinforcing the need for compliance with judicial directions to ensure a fair and just adjudication process. No costs were awarded, and the connected miscellaneous petition was closed.

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