1992 (11) TMI 101 - HC - Central Excise

Summary

Issues:
1. Whether the jurisdiction under Article 226 or 227 of the Constitution should be exercised in a case challenging a show-cause notice?
2. Whether the Exemption Notification No. 217/86 dated 2-4-1986 falls within the scope of Sec. 2 of the Act?

Analysis:

Issue 1:
The Court acknowledged that generally, jurisdiction under Article 226 or 227 is not exercised in cases involving disputed facts and where there is a right of appeal. However, when the issue pertains solely to the interpretation of law concerning the authority to demand duty, the Court found it appropriate to exercise jurisdiction. In this case, the matter revolved around the interpretation of Sec. 2 of the Act and the notification, justifying the Single Judge's exercise of jurisdiction under Article 226 or 227.

Issue 2:
The Court noted that the goods in question were covered by Chapter 85 of the Central Excise Tariff Act and were exempted from duty as per Notification No. 217/1986 dated 2-4-1986. The Act aimed to provide retrospective effect to notifications exempting goods from excise duty. The Act addressed situations where goods were exempted under the new Tariff Act but the exemption notification was issued after the new Act came into effect. The Court held that the notification dated 2-4-1986 fell within the scope of Sec. 2 of the Act as it maintained the effective rates of excise duties for certain goods prior to 1-3-1986. Therefore, the Court upheld the Single Judge's decision to quash the show-cause notice based on the exemption notification falling under the Act's purview.

Ultimately, the Court dismissed the appeal as it found no merit in the arguments presented by the Central Government's standing counsel.