1985 (11) TMI 63 - HC - Central Excise

Summary

Issues:
Reassessment of assessable value for sulphuric acid and oleum manufactured at Kumhari factory based on values from Ambarnath factory.

Analysis:
The petitioner-company operated factories in Kumhari and Ambarnath, manufacturing sulphuric acid and oleum. The excise duty was paid based on approved price lists for goods manufactured in Kumhari. Subsequently, the Assistant Collector issued show cause notices for reassessment of assessable values, comparing them to values from Ambarnath. The petitioner denied the need for reassessment, but the Assistant Collector proceeded to reassess based solely on higher values from Ambarnath, without addressing the petitioner's contentions. The High Court found this reasoning insufficient and lacking in justification, leading to a quashing of the impugned orders.

Regarding the oleum manufacturing, a dispute arose over the applicability of sub-clause (i) or sub-clause (ii) of Clause (b) of Rule 6 of the Central Excise (Valuation) Rules, 1975. The petitioner argued for sub-clause (ii), while the Assistant Collector applied sub-clause (i). The High Court emphasized the need for a case-specific analysis based on available evidence. The Assistant Collector's decision was deemed lacking in considering all relevant factors, necessitating a fresh determination on this issue as well.

The High Court acknowledged the existence of alternative remedies under the statute but declined to dismiss the petitions solely on this ground. The Court highlighted that the availability of alternative remedies does not preclude the exercise of writ jurisdiction, especially when a patent error is evident in the impugned orders. As the Assistant Collector's decisions were found to contain errors and lacked proper reasoning, the Court quashed the orders and directed the Assistant Collector to reevaluate the matters in accordance with the law and the Court's observations, ensuring notice to the petitioner-company. The Court also ordered the return of bank guarantees and security amounts to the petitioner-company without imposing any costs on the petitions.