2016 (5) TMI 675 - HC - Central Excise

Maintainability - Crushing of iron ore into smaller sizes and separation of different sizes - Revenue contended that there is clear provision under Section 35-B of the Act to file appeal before the CESTAT against the impugned order passed by the Commissioner of Central Excise and this is not a case where the writ petition should lie when there is efficacious remedy available under the statute. Held that - it is available from the petition that the Commissioner of Central Excise had fixed for spot visit but without going to the said Mines has passed the impugned order, thus, requiring further materials to be gone through by the fact finding authority. If the facts required to be decided will prove the way to decide the issues arising between the parties, same can only be decided either by the Commissioner of Central Excise or by the appellate authority but not the same can be entertained in the writ petition. Also it appears that against any decision passed by the Commissioner of Central Excise as an adjudicating authority, the appeal lies to Appellate Tribunal. It is already discussed that there are certain facts raised before us are required to be adjudicated in appeal and the same cannot be adjudicated in the writ petition. We have already observed in this writ petition that further facts are to be adjudicated and same can only be addressed before the appellate court. Moreover, there is clear-cut provision under Section 35-B to file appeal. It is available from the contention of the petitioner that in an earlier occasion when the petitioner manufactured the same product, the petitioner was served notice by the Department in the year 1996 asking to pay duty as same was iron ore concentrate chargeable to duty. Petitioner had also challenged the same before this Court and this Court dismissed the writ petition directing the parties to file appeal as the alternative remedy is available. Now the same party with same contention has come up to this Court of course due to demand made basing on amendment to Ch.26 w.e.f. 1.3.2011. Therefore, we refrain from deciding any issue raised before us and are of the considered view that since efficacious remedy by way of filing appeal before the CESTAT is available, the petitioner is directed to challenge the impugned order before the appellate authority under Section 35-B of the Act and raise all such contentions raised before us within a period of two weeks from today and in the event of filing appeal, the appellate authority will dispose of the same early by hearing both the parties and both parties are free to raise respective contentions as raised before us and also any other materials to which they think it proper to address. - Petition disposed of

Summary

Issues Involved:
1. Maintainability of the writ petition.
2. Legality of the impugned order confirming the duty demand.
3. Applicability of CBEC Circular No.332/1/2012-TRU dated 17.2.2012.
4. Definition and classification of Iron Ore and Iron Ore Concentrates.
5. Applicability of the exemption Notification No.4/2006-CE dated 1.3.2006.
6. Requirement of pre-deposit under Section 35-F of the Central Excise Act, 1944.
7. Allegations of violation of principles of natural justice.

Detailed Analysis:

1. Maintainability of the Writ Petition:
The primary issue was whether the writ petition was maintainable given the statutory remedy available under Section 35-B of the Central Excise Act, 1944. The court noted that several contentions raised required adjudication of facts, which could only be addressed by the appellate authority. The court referenced Section 35-B (1) of the Central Excise Act, which allows appeals to the Appellate Tribunal against decisions by the Commissioner of Central Excise. The court emphasized that when statutory remedies are available, writ petitions are generally not entertained, as supported by the precedent in *Larsen & Toubro Limited v. State of Orissa*. Thus, the writ petition was deemed not maintainable, and the petitioner was directed to file an appeal with the CESTAT.

2. Legality of the Impugned Order:
The petitioner challenged the order confirming a duty demand of ?63,73,51,977/- under Section 11A of the Central Excise Act, along with penalties and interest. The petitioner argued that the order was passed without considering relevant CBEC Circulars and without a proper understanding of the processes undertaken. The court, however, did not adjudicate on the merits of this issue, directing the petitioner to raise these contentions before the appellate authority.

3. Applicability of CBEC Circular No.332/1/2012-TRU dated 17.2.2012:
The petitioner contended that the Commissioner failed to consider this Circular, which clarified that the process of "crushing and screening" does not amount to "special treatment" and thus does not result in Iron Ore Concentrate. The court noted that this argument required factual adjudication and should be addressed by the appellate authority.

4. Definition and Classification of Iron Ore and Iron Ore Concentrates:
The dispute centered around whether the processes undertaken by the petitioner resulted in Iron Ore or Iron Ore Concentrates. The petitioner argued that their activities did not amount to concentration, while the Department maintained that the processes rendered the ore fit for economical transportation and subsequent metallurgical use, thus classifying it as Iron Ore Concentrate. The court refrained from deciding on this issue, directing it to be resolved by the appellate authority.

5. Applicability of the Exemption Notification No.4/2006-CE dated 1.3.2006:
The petitioner claimed exemption from excise duty under this notification, which exempts ores under certain Chapter Headings from duty. The Department argued that this exemption does not apply to concentrates. The court did not adjudicate on this matter, directing the petitioner to raise it in the appeal.

6. Requirement of Pre-deposit under Section 35-F of the Central Excise Act, 1944:
The petitioner argued that the requirement of pre-deposit under Section 35-F was a hardship. The court directed that the petitioner make a pre-deposit of 5% of the duty demand while filing the appeal, and the rest of the demand, interest, and penalty would remain in abeyance until the appeal's disposal.

7. Allegations of Violation of Principles of Natural Justice:
The petitioner alleged that the impugned order was passed without application of judicial mind and in violation of principles of natural justice. The court noted that these contentions required factual adjudication and should be addressed in the appeal.

Conclusion:
The writ petition was disposed of, directing the petitioner to file an appeal before the CESTAT within two weeks and make a pre-deposit of 5% of the duty demand. The interim order was vacated, and the appellate authority was instructed to dispose of the appeal expeditiously, considering all contentions raised by both parties.