2021 (5) TMI 331 - HC - Central Excise

Maintainability of appeal - availability of efficacious alternative remedy of appeal - Classification of goods - Herbal Sherbat Granules - whether classified under subheading No. 2101 2090? - HELD THAT - Undoubtedly, the High Court may pass an order of remand in the event of non-consideration of certain vital issues raised by the parties concerned. However, if an efficacious Appellate Remedy is available before the Appellate Tribunal, then the High Court need not go into those facts unnecessarily and the institutional respects are to be maintained and the statutory appeals are to be exhausted in all circumstances. The Tribunal has got powers to adjudicate all the factual as well as the legal grounds raised by the respective parties. More so, the Tribunal is empowered to consider the merits with reference to the documents as well as the evidences. Such an exercise cannot be done by the High Court under Article 226 of the Constitution of India. The order impugned is passed by the 1st respondent, who is the original authority in the present case. Thus, the petitioner has to avail the further opportunity of appeal for effective adjudication of the issues with reference to the original documents and evidences, which all are relied on by the parties concerned. Thus, this Court is of the opinion that exhausting of an appeal remedy under the Customs Act is of paramount importance for effective adjudication of the issues with reference to the original documents and evidences produced by the respective parties to the lis. This Court has no hesitation in arriving a conclusion that the petitioners are bound to exhaust the Appellate Remedy as contemplated under Section 35-B of the Central Excise Act, 1944. The petitioners are at liberty to approach the Appellate Authority by filing an appeal in a prescribed form and by complying with the provisions of the Act - Petition dismissed.

Summary

Issues Involved:
1. Classification of the product "Herbal Sherbat Granules."
2. Non-consideration of petitioner's objections and judgments.
3. Absence of sample analysis by the Central Food Technological Research Institute (CFTRI).
4. Jurisdiction of the High Court under Article 226 of the Constitution of India.
5. Requirement to exhaust the appellate remedy under the Customs Act.

Detailed Analysis:

1. Classification of the product "Herbal Sherbat Granules":
The petitioner, a proprietorship concern, procures tea, herbs, spices, and food colors to produce "Herbal Sherbat Granules," which they claim is a flavored tea containing around 90% tea. The dispute arose when the first respondent classified the product under subheading No. 2101 2090, which the petitioner challenged, arguing it should be classified as tea.

2. Non-consideration of petitioner's objections and judgments:
The petitioner contended that the first respondent did not consider the objections raised or the judgments relied upon by the petitioner. The petitioner argued that the matter should be remanded back for fresh adjudication as the first respondent failed to address these critical aspects.

3. Absence of sample analysis by the Central Food Technological Research Institute (CFTRI):
The petitioner emphasized that no samples were collected or analyzed by CFTRI. Despite the first respondent's claim that samples were sent to CFTRI, the petitioner obtained information under the Right to Information Act indicating that no samples were received by CFTRI. The petitioner argued that the first respondent's decision, made without a proper analysis, was based on presumptions and assumptions, making the impugned order liable to be set aside.

4. Jurisdiction of the High Court under Article 226 of the Constitution of India:
The court noted that while the High Court could pass an order of remand if vital issues were not considered, it emphasized the importance of maintaining institutional respect and exhausting statutory appeals. The court highlighted that the Tribunal has the power to adjudicate all factual and legal grounds, which the High Court cannot do under Article 226. The court stressed that bypassing the appellate remedy could cause prejudice to either party and that the High Court should not venture into the adjudication of technical aspects related to the nature of products.

5. Requirement to exhaust the appellate remedy under the Customs Act:
The court reiterated that the petitioner must exhaust the appellate remedy provided under the Customs Act. The court referenced several judgments emphasizing that the High Court should not interfere if an efficacious alternative remedy is available. The court noted that the appellate remedy is of paramount importance for effective adjudication with reference to original documents and evidences. The court concluded that the petitioner should approach the Appellate Tribunal within 30 days and that the Tribunal should adjudicate the matter on merits and in accordance with law.

Conclusion:
The writ petition was dismissed, and the petitioner was directed to exhaust the appellate remedy under Section 35-B of the Central Excise Act, 1944, by filing an appeal before the Appellate Tribunal within 30 days. The Tribunal was instructed to adjudicate the matter on merits, providing an opportunity to all parties concerned.