2017 (5) TMI 515 - HC - Central Excise

Maintainability of appeal - Pre-deposit - Section 35F of the CEA, 1944 - Held that - until the admission of this petition, there would be no coercive action so as to recover any sums under the SCN which stands confirmed by the order impugned in the writ petition.

Summary

Issues Involved:
Challenge to maintainability of writ petition against Order-in-Original of Commissioner of Central Excise, Customs & Service Tax, Nashik II.

Detailed Analysis:

1. Maintainability of Writ Petition:
- The Respondent raised a preliminary objection regarding the maintainability of the writ petition, arguing that the challenge against the Order-in-Original should be addressed through an appeal to the Customs, Excise & Service Tax Appellate Tribunal, Mumbai.
- The Petitioner's counsel argued that the show cause notice alleged the petitioner's failure to include the value of materials received free of cost in determining excise duty, citing relevant legal provisions and previous judgments to support their position.
- The counsel emphasized that the issue raised in the show cause notice was covered by Supreme Court judgments and Tribunal orders, which the Commissioner allegedly ignored in passing the order confirming the demand.
- The Court granted time to both parties to file affidavits and postponed further proceedings to allow the Respondent to present distinguishing features in their reply.

2. Legal Interpretation and Precedents:
- The Petitioner's argument relied on the interpretation of Explanation 1 to Rule 6 of the Central Excise Valuation Rules, 2000, concerning the inclusion of costs of materials received under Job Work Challans in determining excise duty.
- The counsel highlighted judgments such as International Auto Ltd. v. Commissioner of Central Excise and Motherson Sumi Systems Ltd. v. Commissioner of Central Excise, which addressed similar issues and were affirmed by higher courts.
- The Tribunal's decision in Ghatge Patil Inds. Ltd. v. Commissioner of Central Excise was also cited, emphasizing that the addition of costs of supplied parts under Challans was not permissible under Section 4 of the Central Excise Act, 1944.
- The dismissal of the Revenue's appeal by the Supreme Court further supported the Petitioner's argument regarding the legal standing of the issue in question.

3. Court's Decision and Future Proceedings:
- The Court granted time to the Respondent to file a reply, acknowledging the peculiar facts of the case and ensuring no coercive action for recovery would be taken until the petition's admission.
- The matter was postponed for further consideration, allowing both parties to present their arguments and evidence before the Court for a comprehensive evaluation of the legal and factual aspects involved in the dispute.

This detailed analysis of the judgment highlights the legal complexities, interpretations of relevant provisions, and the application of precedents in determining the maintainability of the writ petition challenging the Order-in-Original issued by the Commissioner of Central Excise, Customs & Service Tax, Nashik II.