2008 (1) TMI 22 - HC - Central Excise

Levy of Excise Duty on casting castings manufacturing by the petitioner for manufacturing of exempted pumps - delay in making appeal - exercising extra ordinary jurisdiction - failure of nature justice - petition is allowed and case is remanded back for decide matter afresh

Summary

Issues:
Challenge to duty assessment and consequential orders due to dismissal of appeals beyond the limitation period, violation of natural justice and fair play, exercise of extra ordinary jurisdiction by the court, interpretation of relevant notifications for duty exemption, failure to consider relevant documents, error of law by the assessing authority.

Analysis:

1. The petitioner, a manufacturer of Centrifugal Pumps, faced an order by the Respondent Authorities classifying castings manufactured by the petitioner under specific headings and demanding duty on them. Appeals filed by the petitioner were dismissed due to being beyond the limitation period, leading to a series of legal actions culminating in the present petition challenging the duty assessment and consequential orders.

2. The petitioner argued that despite the dismissal of appeals, there was a clear failure of natural justice as they were not given a hearing before the duty quantification. Citing a Supreme Court judgment, the petitioner sought the court's extraordinary jurisdiction to address the issue of natural justice and fair play.

3. The Respondents contended that the petitioner had not paid central excise duty on certain goods used in pump manufacturing, which were classified separately and attracted duty. They argued against the court's intervention due to the dismissal of appeals beyond the limitation period and highlighted the duty exemption notifications relevant to the case.

4. The court addressed the preliminary objection raised by the Revenue regarding the court's jurisdiction in cases with alternative remedies. It cited legal precedents emphasizing that if an order is a nullity due to a violation of natural justice, the court can intervene, as was the case here where the petitioner was not granted a fair hearing before duty quantification.

5. The court analyzed the duty exemption notifications and found that the assessing authority had failed to consider them, leading to an error of law. Consequently, the court allowed the petition, quashed the order, and remitted the matter back to the assessing authority for a fresh assessment considering the relevant notifications.

6. In conclusion, the court made the rule absolute in favor of the petitioner, highlighting the necessity of fair assessment procedures and adherence to legal provisions. No costs were awarded in the circumstances of the case.