1986 (9) TMI 83 - HC - Central Excise

Summary

Issues Involved:
1. Jurisdiction of the Collector of Central Excise under Section 11A of the Central Excises and Salt Act, 1944.
2. Marketability and excisability of hydrolised starch.
3. Adequacy of alternative remedy and the appropriateness of invoking Article 226 of the Constitution.
4. Requirement of pre-deposit under Section 35F of the Central Excises and Salt Act, 1944.

Detailed Analysis:

1. Jurisdiction of the Collector of Central Excise under Section 11A of the Central Excises and Salt Act, 1944:

The petitioner contended that the Collector of Central Excise did not have the jurisdiction to adjudicate under Section 11A as it originally stood, which specified that only the Assistant Collector could determine the amount of duty. The petitioner argued that the order passed by the Collector was non est (invalid). The Court acknowledged that Section 11A had been amended to include the Collector of Central Excise, but since the impugned order was passed before this amendment, the adjudication by the Collector was not maintainable. However, the Court noted that the show cause notice also mentioned Rule 9(2), which provides that the proper officer can demand duty and confiscate goods if they are clandestinely removed. The Court concluded that the issue of jurisdiction could be effectively addressed before the Tribunal.

2. Marketability and excisability of hydrolised starch:

The petitioner argued that hydrolised starch is not 'goods' within the meaning of the Act as it is not marketable and is only an intermediate article, thus not liable for duty. The Collector of Central Excise rejected this argument, stating that glucose, which is a product of hydrolised starch, is excisable under tariff item 1-K. The Court did not delve into the merits of this contention but indicated that it could be raised before the Tribunal.

3. Adequacy of alternative remedy and the appropriateness of invoking Article 226 of the Constitution:

The petitioner sought relief under Article 226, arguing that the jurisdictional question warranted judicial review by the High Court. The Court, however, emphasized that when an effective and efficacious alternative remedy is available, such as an appeal before the Tribunal, the High Court should not entertain a writ petition. The Court cited precedents, including a Supreme Court decision, to assert that statutory remedies must be exhausted before invoking Article 226. The Court thus dismissed the petition, noting that the petitioner had already filed an appeal before the Tribunal.

4. Requirement of pre-deposit under Section 35F of the Central Excises and Salt Act, 1944:

The petitioner argued that the requirement to deposit the duty and penalty before the Tribunal could cause undue hardship. The Court referred to Section 35F, which allows the Tribunal to dispense with the deposit if it would cause undue hardship. The Court rejected the petitioner's reliance on an older Supreme Court decision, noting that the current statutory framework provides for relief from the pre-deposit requirement in cases of undue hardship. The Court concluded that the petitioner should seek such relief from the Tribunal.

Conclusion:

The High Court dismissed the Special Civil Application, emphasizing that the petitioner had an effective alternative remedy before the Tribunal. The Court continued the interim relief for four weeks to allow the petitioner to seek a stay from the Tribunal under Section 35F.