1994 (7) TMI 100 - HC - Central Excise

Summary

Issues:
1. Interpretation of excise duty concession notifications for vegetable products made from indigenous rice bran oil.
2. Validity of the withdrawal of concession under Annexure-2 notification.
3. Justification for quashing Annexure-2 notification and the difference between Annexure-1 and Annexure-2.
4. Allegations of wrongful availing of concession and the issuance of show-cause notices.
5. Failure to file an appeal against the order of the Assistant Collector of Excise.
6. Failure to respond to show-cause notices and seeking relief through a writ petition.

Detailed Analysis:
1. The case involves the interpretation of excise duty concession notifications for vegetable products made from indigenous rice bran oil. The petitioners sought exemption under Annexure-1 and Annexure-2 notifications, which granted concessions subject to specific conditions. Annexure-1 exempted vegetable products from excise duty to the extent of Rs. 30/- per quintal if made solely from indigenous rice bran oil. The petitioners claimed entitlement to this exemption, but the concession was later withdrawn by Annexure-2 notification.

2. The validity of the withdrawal of the concession under Annexure-2 notification was challenged by the petitioners. The Court noted that both notifications provided the same rate of exemption, i.e., Rs. 30/- per quintal, for vegetable products made from indigenous rice bran oil. However, the purpose of Annexure-2 and the difference between the two notifications were not adequately explained by the parties. As a result, the Court found insufficient justification for quashing Annexure-2.

3. The Court addressed the issue of the wrongful availing of concession by the petitioners and the issuance of show-cause notices. The show-cause notices alleged that the petitioners had availed the concession without meeting the conditions specified in Annexure-2 and without filing a fresh classification list. The petitioners, instead of responding to the show-cause notices, filed a writ petition seeking relief.

4. The petitioners failed to file an appeal against the order of the Assistant Collector of Excise, which concluded that the petitioners had unlawfully paid excise duty at the rate of 5% ad valorem. The order also provided the petitioners with the option to appeal to the Collector of Appeals, Central Excise, within a specified timeframe.

5. The Court emphasized that the petitioners should have responded to the show-cause notices and presented their case before the authority concerned instead of seeking relief through the writ petition. Despite the petitioners' failure to reply to the show-cause notices, the Court granted them a further opportunity to respond within two months.

6. The writ petition was disposed of with a direction for the petitioners to submit replies to the show-cause notices within two months. The Assistant Collector was instructed to consider the responses and pass appropriate orders after providing the petitioners with a hearing. No costs were awarded, and any deposited security was to be refunded.