2022 (2) TMI 7 - HC - Central Excise

Recovery of Central Excise Duty at the tariff rate - writ applicants had not produced the Project Authority Certificates issued by the competent authority mentioned in N/N. 12/2012-CE, 18/12-CE and 64/1995-CE as regards the clearances of the goods to the Central Excise Department - HELD THAT - When this matter was taken up for hearing and having noticed that the impugned order in original passed by the Principal Commissioner is an appealable order, we confronted Mr. Thakore in this regard and requested him to make us understand why we should entertain this writ application and whey we should not relegate the writ applicants to avail the alternative remedy of statutory appeal. Mr. Thakore would submit that he has prayed for a writ of certiorari on the premise that the impugned order passed by the Principal Commissioner travels much beyond the scope of the show-cause notice and no opportunity was given to the writ applicant to say anything as regards the alleged clearances of the goods under the Foreign Trade Policy without fulfilling the conditions stipulated therein. It is on such argument that Mr. Thakore wants this Court to entertain this writ application rather than asking the writ applicants to avail the statutory remedy of preferring an appeal. Let notice be issued to the respondents, returnable on 24.02.2022.

Summary

Issues involved:
Challenge to order in original passed by Principal Commissioner, CGST and Central Excise; Demand of Central Excise Duty; Recovery of interest; Imposition of penalty; Compliance with exemption notification No.12/2012-CE; Submission of Project Authority Certificates; Verification of facts by Assistant Commissioner; Scope of show-cause notice; Entertaining writ application vs. statutory appeal.

Analysis:
The judgment concerns a challenge to the order passed by the Principal Commissioner, CGST and Central Excise, Vadodara-I, regarding the demand of Central Excise Duty, recovery of interest, and imposition of penalties. The impugned order confirmed the demand of Central Excise Duty amounting to a significant sum and ordered its recovery under relevant legal provisions. Additionally, interest at the appropriate rate and penalties were imposed on the petitioner. The order also detailed the penalty amounts based on specific transactions during different time periods, emphasizing compliance with statutory provisions.

The dispute arose from a show-cause notice issued by the Principal Commissioner, calling upon the petitioner to justify the non-payment of Central Excise Duty for a specified period. The petitioner was required to defend against the demand for duty, interest, and penalties under relevant sections of the Central Excise Act. The litigation primarily revolves around the interpretation and application of exemption notification No.12/2012-CE, which outlines duty exemptions for specified goods. The Department alleged that the petitioner had availed exemptions without fulfilling necessary conditions, particularly related to submitting Project Authority Certificates.

In response to the show-cause notice, the petitioner submitted a detailed reply, highlighting the exemption criteria and the submission of required certificates. Subsequently, the Assistant Commissioner conducted a verification exercise to ascertain compliance with exemption conditions. The report indicated discrepancies in fulfilling conditions under the Foreign Trade Policy, which were not explicitly part of the show-cause notice. Despite this, the Principal Commissioner considered these findings while passing the final order, raising concerns about clearances under the Foreign Trade Policy.

During the hearing, the Court questioned the petitioner's choice of a writ application over a statutory appeal, given the appealable nature of the order. The petitioner sought a writ of certiorari, arguing that the order exceeded the scope of the show-cause notice and denied an opportunity to address additional allegations. The Court issued notice to the respondents, suspending coercive recovery pending further proceedings and permitting the addition of documents to the case records.

In conclusion, the judgment delves into the complexities of compliance with exemption notifications, verification of factual assertions, and the scope of legal remedies available to aggrieved parties. The Court's scrutiny of the order's alignment with the show-cause notice and the petitioner's right to appeal underscores the importance of procedural fairness and adherence to legal requirements in tax matters.