1990 (8) TMI 159 - HC - Central Excise

Issues Involved:

1. Jurisdiction and Finality of the Demand Order.
2. Compliance with Principles of Natural Justice.
3. Validity of the Demand Order in Light of the Director General's Order.
4. Availability of Alternative Remedy.

Issue-wise Detailed Analysis:

1. Jurisdiction and Finality of the Demand Order:

The petitioner argued that the price lists submitted during the meetings held from 26th June to 16th July 1986 in Calcutta were accepted and thus became final and binding on the Excise Department. Consequently, they claimed that the subsequent demand order dated 28th April 1988 was without jurisdiction. However, the court found that the Calcutta meeting was departmental in nature and aimed only at determining the procedure for calculating duty liability. The data supplied by the petitioner was checked arithmetically but no final calculation or demand was made. The documents annexed by the petitioner did not bear the signatures of the Assistant Collector and were not formal demand notices. Therefore, the court concluded that the differential duty was not finalized in the Calcutta meeting, and the demand order dated 28th April 1988 was within jurisdiction and valid.

2. Compliance with Principles of Natural Justice:

The petitioner contended that the demand order dated 28th April 1988 was void as no opportunity was afforded to them before its issuance. The court examined Section 11A of the Central Excises and Salt Act, 1944, which requires that a notice of show cause be issued and the representation of the person be considered before determining the amount of duty. The court noted that the petitioner was given an opportunity to be heard by the Director General before the order dated 10th April 1986 was passed. Additionally, meetings were held in Calcutta where the petitioner's representatives were present, and discussions took place regarding the final assessment. The court concluded that the principles of natural justice were complied with, and the demand order dated 28th April 1988 was not void for lack of opportunity.

3. Validity of the Demand Order in Light of the Director General's Order:

The petitioner argued that the demand order dated 28th April 1988 was contrary to the Director General's order dated 10th April 1986. The court found that the Director General's order had become final and was not challenged by the petitioner. The Assistant Collector of Central Excise issued the demand order in pursuance of the Director General's order. The court held that the question of whether the demand order was contrary to the Director General's order could be appropriately dealt with by an appellate authority and not by the High Court under Article 226.

4. Availability of Alternative Remedy:

The court noted that Section 35 of the Central Excises and Salt Act, 1944, provides for an appeal to the Collector of Central Excise (Appeals) against decisions or orders passed by a Central Excise Officer lower in rank than a Collector. The court emphasized that the Collector (Appeals) has wide powers to confirm, modify, or annul the decision and is obliged to give reasons for the decision. The court concluded that the petitioner had an efficacious alternative remedy available by way of filing an appeal under Section 35 of the Act and, therefore, the present petition was not maintainable in so far as the merits of the demand were concerned.

Conclusion:

The petition was dismissed, and the interim order dated 16-1-1990 was vacated. The court held that the demand order dated 28th April 1988 was within jurisdiction, complied with the principles of natural justice, and was not contrary to the Director General's order. The petitioner was advised to seek remedy through the appellate process provided under the Act.

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