2016 (6) TMI 772 - HC - Central Excise

Levy of excise duty - manufacture - whether food cooked and served in Hotels and Restaurants are excisable - SSI exemption - whether the value of the food sold in Restaurants should be taken into account to compute the aggregate value of clearances so as to decide the eligibility of availing the exemption provided under the Notification 8/2003-CE, dated 01.03.2003 - Maintainability of writ petition - alternative appellate remedy. Held that - it is seen that the case of the petitioner itself largely rests upon the decision in the case of Indian Hotels Co., Ltd., & Ors., 2000 (8) TMI 5 - SUPREME Court . The said decision arose under the provision of the Income Tax Act and the matter pertains only to the flight kitchen operated by the appellant Hotel. Therefore, the Hon ble Supreme Court did not deal with the other contentions. - the petitioner cannot rest his case solely based on the interpretation given by the Hon ble Supreme Court in the case of Indian Hotels Co., Ltd., & Ors., case, which arose under the Income Tax Act. As rightly pointed out by the learned Senior Standing counsel appearing for the respondent what the petitioner seeks to agitate is a disputed question of fact and such disputed questions would not be normally adjudicated in a Writ Petition, more particularly, when it involves a taxation statue. Therefore, the petitioner has not made out any grounds to entertain a Writ Petition as against the impugned order. Writ petition dismissed - Decided against the assessee.

Summary

Issues:
Challenge to order under Central Excise Act - Duty payable, interest, penalty - Availment of alternate remedy - Nature of activity - Definition of 'manufacture' - Entitlement to exemption - Applicability of Supreme Court decision - Disputed questions of fact in taxation matter.

Analysis:
The case involves a company in the hospitality industry challenging an order confirming duty payable, interest, and penalty under the Central Excise Act. The petitioner claimed exemption based on the value of clearances not exceeding the threshold limit. The Department found discrepancies in duty payment for items like cakes, pastries, and ice creams. The petitioner argued that cooking food does not constitute 'manufacture' as defined under the Act, citing a Supreme Court decision. The Commissioner considered the definition of 'manufacture' and held that a new product emerges after cooking, constituting manufacture.

The petitioner contended that the Supreme Court decision on a similar matter under the Income Tax Act supported their case. However, the Court noted that the said decision did not address all aspects relevant to the present case. The Supreme Court's interpretation of 'manufacture' under the Income Tax Act differs from the inclusive definition under the Central Excise Act. The Court emphasized that disputed factual questions, especially in tax matters, are not typically adjudicated in a Writ Petition.

The Court dismissed the Writ Petition, stating that the petitioner failed to establish grounds for challenging the order. The petitioner was granted liberty to appeal before the CESTAT. The filing of the Writ Petition within the statutory period was acknowledged, and the Tribunal was directed to exclude the period of the Writ Petition from the limitation calculation for the appeal. No costs were awarded, and the Miscellaneous Petition was closed.