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1987 (8) TMI 116 - HC - Central Excise
Issues involved: Challenge to the validity of Section 37-B of the Central Excises and Salt Act, 1944; Issuance of show cause notice by excise authorities regarding Modvat Scheme and general exemption scheme.
Judgment Details: Issue 1: Challenge to Section 37-B of the Central Excises and Salt Act, 1944 The petitioners sought a writ of mandamus to declare Section 37-B ultra vires the Act and the Constitution. The section empowers the Central Board of Excise and Customs to issue orders to excise officers for uniformity in classification of goods and levy of duties, with a proviso protecting quasi-judicial authorities from being directed on specific assessments. Referring to a previous judgment, it was emphasized that assessing and appellate authorities must act independently and impartially in deciding disputes, without being controlled by external directions. The Court held that Section 37-B does not violate the Constitution as it does not mandate quasi-judicial authorities to act in a particular manner, only binding them in administrative capacities. Issue 2: Show Cause Notice Regarding Modvat Scheme and General Exemption Scheme The petitioners opted out of the Modvat Scheme to avail benefits under a general exemption scheme, leading to the issuance of a show cause notice by excise authorities. The petitioners argued that authorities should not reopen the matter and should follow the procedure under Section 35-E of the Act. They contended that there is no prohibition on opting out of the Modvat Scheme. The Court held that the matter should be presented before the quasi-judicial authority for a decision, emphasizing that clarifications or trade notices should not influence the authority's decision. The Court dismissed the application, stating it premature for the petitioners to approach the Court at the show cause stage. This judgment clarifies the scope of Section 37-B and the procedures regarding opting out of schemes under the Central Excises and Salt Act, 1944, emphasizing the independence of quasi-judicial authorities in decision-making processes.
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