2019 (12) TMI 229 - HC - Central Excise

Maintainability of appeal - Appropriate forum - Jurisdiction of High Court - Refund or adjustment of the excise duty paid - Benefit of exemption in terms of notification No.56/2002-CE dated 14.11.2002 with reference to subsequent notification Nos.19/2008-CE dated 27.03.2008 and 34/2008? HELD THAT - A perusal of Section 35-G of the Act shows that an appeal lies to this Court from every order passed in appeal by the Tribunal except in a case where the order relates, among other things, to determination of any question having relation to the rate of duty of excise or to the value of goods for purpose of assessment. While excluding the jurisdiction of the High Court to deal with the aforesaid issues, appeal has been provided directly from the order of the Tribunal, on the aforesaid issues, to Hon ble the Supreme Court, as provided for in Section 35-L of the Act. Delhi High Court in Bharti Airtel Limited s case 2013 (4) TMI 376 - DELHI HIGH COURT had opined that for the purposes of consideration of the issue regarding maintainability of appeal before the High Court, nature of the order has to be considered and not the issue sought to be raised by the appellant. In fact this is evident from the plain language of Section 35-G of the Act, which provide that an appeal shall lie to the High Court from every order passed by the Tribunal not being an order relating to determination of any question having relation to the rate of duty of excise or to the value of goods for purpose of assessment. Thus, the consistent opinion of the courts is that the dispute, as to whether or not the assessee is covered by the exemption notification, relates directly or proximately to the rate of duty applicable thereto for the purpose of assessment, hence, High Courts will not have jurisdiction to entertain appeal pertaining to that, it being in exclusive jurisdiction of Hon ble the Supreme Court - there are no substance in the argument raised by the learned counsel for the revenue that judgment of this Court deciding the validity of a notification will be a judgment in personam and not in rem and will apply only to the petitioners before the Court. As the opinion expressed by this Court was declaration of law, it will apply uniformly to all the assesses concerned without any exception, irrespective of the fact whether any party had approached the Court or not. The issue involved is regarding interpretation of exemption notifications dated 14.11.2002, 27.03.2008 and 10.06.2008, which will have effect or valuation of goods for the purpose of levy of duty, hence appeals before this Court will not be maintainable - appeal before this Court against the order passed by the Tribunal will not be maintainable as the jurisdiction to entertain the same would lie before Hon ble the Supreme Court.

Summary

Issues Involved:
1. Maintainability of appeals before the High Court.
2. Interpretation of exemption notifications.
3. Jurisdiction of High Courts versus the Supreme Court in excise duty matters.
4. Monetary limits for filing appeals.
5. Substantial questions of law.

Detailed Analysis:

1. Maintainability of Appeals Before the High Court:
The core issue was whether the appeals against the Tribunal's order were maintainable before the High Court. The respondents argued that under Sections 35-G and 35-L of the Central Excise Act, 1944, appeals involving questions related to the rate of duty or the value of goods for assessment purposes should be directly filed with the Supreme Court. The rationale is to maintain uniformity in the application of central statutes across the country. The court agreed, citing precedents from various High Courts and the Supreme Court, which consistently held that issues regarding exemption notifications relate directly to the rate of duty and thus fall outside the High Court's jurisdiction.

2. Interpretation of Exemption Notifications:
The appeals involved the interpretation of exemption notifications No. 56/2002-CE dated 14.11.2002, No. 19/2008-CE dated 27.03.2008, and No. 34/2008-CE dated 10.06.2008. The Tribunal had relied on a prior judgment by the Single Judge of the High Court in Reckitt Benckiser vs. Union of India, which was under challenge before a Division Bench and the Supreme Court. The High Court noted that the interpretation of such notifications directly affects the rate of duty, thus falling under the Supreme Court's jurisdiction.

3. Jurisdiction of High Courts versus the Supreme Court in Excise Duty Matters:
The court emphasized that under Section 35-G, appeals involving the determination of the rate of duty or the value of goods should be heard by the Supreme Court. This is to ensure uniformity across the country. The court cited multiple judgments, including Navin Chemicals MFG and Trading Co. Ltd. vs. Collector of Customs and other High Court rulings, which supported this interpretation.

4. Monetary Limits for Filing Appeals:
The respondents also argued that the appeals should not be entertained based on the monetary limits prescribed by the Central Board of Excise and Customs. The High Court dismissed this argument, stating that the substantial legal issue involved justified the appeals, regardless of the monetary amount.

5. Substantial Questions of Law:
The court concluded that the questions framed by the revenue needed reframing to address the core issue of the right to exemption under the notifications. The High Court found that these questions were substantial and pertained to the interpretation of exemption notifications, which are directly related to the rate of duty.

Conclusion:
The High Court ruled that it did not have jurisdiction to entertain the appeals, as the issues involved were directly related to the rate of duty and the value of goods for assessment purposes, which fall under the Supreme Court's jurisdiction. The Registry was directed to return the original paper books to the appellants to present the same before the Supreme Court.