1989 (1) TMI 137 - HC - Central Excise

Central Excise - Suit - Steel ingots - Produced out of old scrap - Exemption - Interpretation of Statute

Summary

Issues Involved:
1. Jurisdiction of the Civil Court.
2. Applicability of Exemption Notification No. 75/62.
3. Proof of Claim for Recovery of Amount.

Issue-wise Detailed Analysis:

Re. Question No. 1: Jurisdiction of the Civil Court

The court examined whether the civil court's jurisdiction was barred by necessary implication due to Sections 35, 36, and 40 of the Central Excise and Salt Act. Sections 35 and 36 provide for internal remedies for an assessee, while Section 40 offers protection for actions taken under the Act. The court noted that the Act does not expressly bar civil court jurisdiction. It emphasized that the burden of proving the exclusion of jurisdiction lies on the party asserting it. The court referenced a Full Bench decision in Paritosh Maity v. Ghasiram Maity, which outlined that jurisdiction can only be barred if expressly excluded or by necessary implication. The court concluded that the suit was maintainable, as the provisions of the Act did not explicitly or implicitly bar civil court jurisdiction.

Re. Question No. 2: Applicability of Exemption Notification No. 75/62

The court analyzed Notification No. 75/62, which exempts steel ingots produced from old iron and steel scrap from excise duty. The trial court had interpreted the notification to mean that exemption applies only if steel ingots are produced exclusively from old scraps without any admixture. The appellate court disagreed, citing Supreme Court decisions in Aluminium Corporation of India Ltd. v. Union of India and others and Union of India v. Tata Iron and Steel Co. Ltd., which held that exemption notifications should be interpreted in favor of the assessee in case of ambiguity. The court emphasized that the notification did not use restrictive terms like "exclusively" or "entirely," and thus, the plaintiff was entitled to the exemption even if other materials were admixed with old scraps. The court concluded that Notification No. 75/62 applied to the appellant's case.

Re. Question No. 3: Proof of Claim for Recovery of Amount

The court noted that the appellant had produced numerous documents and examined various witnesses to support its claim. The trial court had dismissed the suit without adequately considering these documents and their implications. The appellate court found that the trial court failed to analyze the evidence properly, particularly the returns (Exhibit 13 series) and other documents (Exhibits 4, 4/A, 4/B). The court held that the trial court should have given the appellant an opportunity to correlate the documents and prove its claim, even if not in its entirety. The court also noted that the trial court did not consider the office copies of documents filed in the related suit (Money Suit No. 61 of 1966), which should have been considered in the interest of justice.

Conclusion and Directions:

The appellate court remanded the case to the trial court for re-determination of facts, directing the trial court to try both suits analogously and allow the parties to adduce additional evidence if required. The trial court was instructed to consider all relevant documents and evidence, including those from the related suit, and to return its findings to the appellate court within six months. The court emphasized the need for a thorough and just re-evaluation of the evidence to prevent miscarriage of justice.