1988 (12) TMI 126 - HC - Central Excise

Issues Involved:
1. Validity of the show cause notice dated 2-11-1988.
2. Refund of excise duty paid by the petitioners.
3. Jurisdictional issues related to the demand for excise duty.
4. Limitation period for recovery of excise duty.
5. Constitutionality of the levy of duty under the Act, 1955.
6. Double taxation claim.
7. Jurisdiction of State Excise Authorities versus Central Excise Authorities.
8. Validity of the Central Government's refusal to entertain M/s. Sharda's revision.

Detailed Analysis:

1. Validity of the Show Cause Notice Dated 2-11-1988:
The petitioners challenged the show cause notice issued by the District Excise Officer on 2-11-1988. The court held that the show cause notice was issued pursuant to the direction of the Central Government, which had ordered a de novo adjudication. Therefore, the notice was valid and could not be assailed under Article 226 of the Constitution of India.

2. Refund of Excise Duty Paid by the Petitioners:
M/s. Dabur sought a writ of mandamus for the refund of excise duty paid. The court noted that the Central Government had not directed a refund but had ordered a re-adjudication. Thus, the Excise Authorities were not rendered incompetent to retain the amount already paid. The liability to pay excise duty stems from Section 3 of the Act, 1955, not from the demand notice. Therefore, the court found no justification for a refund at this stage.

3. Jurisdictional Issues Related to the Demand for Excise Duty:
The court examined whether the petitioners could invoke Article 226 after availing statutory remedies. It concluded that having pursued statutory remedies, the petitioners could not now take recourse to Article 226, except in extraordinary situations. The court emphasized that statutory procedures must be followed to their logical conclusion.

4. Limitation Period for Recovery of Excise Duty:
The petitioners argued that the demand for duty was barred by limitation under Rule 11 of the Rules, 1956. The court held that the point of limitation is not a jurisdictional fact and should be argued before statutory authorities. The court cited the principle that a claim never dies; only the remedy becomes unenforceable if barred by limitation.

5. Constitutionality of the Levy of Duty Under the Act, 1955:
M/s. Sharda argued that the 100% ad valorem duty was unconstitutional. The court noted that the vires of the Act, 1955, or the Rules, 1956, were not challenged in the petitions. Therefore, the court refrained from addressing the constitutionality of the levy.

6. Double Taxation Claim:
The petitioners claimed that duty under both the Act, 1944, and the Act, 1955, amounted to double taxation. The court rejected this plea, stating that both Acts operate in different fields and there is no overlapping. The matter of assessability under the Act, 1955, does not constitute a review of the Central Excise Authorities' decision under the Act, 1944.

7. Jurisdiction of State Excise Authorities Versus Central Excise Authorities:
The court held that the State Excise Authorities are not precluded from considering the case under the Act, 1955, even if the Central Excise Authorities have assessed the preparation under the Act, 1944. Both Acts are mutually exclusive, and authorities under each Act can assess the matter separately.

8. Validity of the Central Government's Refusal to Entertain M/s. Sharda's Revision:
M/s. Sharda challenged the Central Government's refusal to entertain its revision. The court upheld the Central Government's decision, noting that M/s. Sharda had a right to appeal, which it chose not to exercise. The court found no patent wrong in the Central Government's refusal based on the availability of an appellate remedy.

Conclusion:
The court dismissed all the writ petitions, emphasizing that the petitioners must follow statutory procedures to their logical end and cannot seek recourse to Article 226 in the absence of extraordinary circumstances. The court also directed the Excise Authorities to expedite the decision on M/s. Dabur's refund request according to law.

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