1996 (1) TMI 126 - HC - Central Excise

Summary

Issues Involved
1. Validity of the differential duty demand.
2. Compliance with Section 11A of the Central Excises and Salt Act.
3. Appropriation of rebate towards duty liability.
4. Availability of alternative statutory remedy.
5. Modification of earlier court orders based on changed circumstances.

Detailed Analysis

1. Validity of the Differential Duty Demand
The petitioner company was directed by the Superintendent of Central Excise, Ambasamudram, to pay a differential duty of Rs. 5,13,80,385/- for the clearances of Core Spun Thread from March 1994 to February 1995. The petitioner contended that this direction contravened the provisions of the Central Excises and Salt Act, specifically Section 11A, which mandates a due procedure for such demands. The court initially directed the Commissioner of Central Excise, Madurai, to dispose of the petitioner's representation and allowed the petitioner to clear detained goods upon payment of Rs. 2.50 crores in installments.

2. Compliance with Section 11A of the Central Excises and Salt Act
The petitioner argued that Section 11A of the Act requires the Assistant Commissioner of Central Excise to determine the amount of duty after considering the assessee's representation. The court noted that the Assistant Commissioner, Central Excise, Tirunelveli Division, adjudicated the show cause notice and determined the duty liability for the period as Rs. 2,56,20,679/-. The petitioner contended that the demand should be restricted to six months preceding the show cause notice, which would amount to Rs. 79,56,913/- for the period from 14-12-1994 to 14-2-1995.

3. Appropriation of Rebate Towards Duty Liability
The petitioner contended that the second respondent wrongly appropriated Rs. 7,03,604/- of rebate lawfully payable to them towards the duty determined. The court recognized this appropriation but did not provide immediate relief, suggesting that such issues should be raised in an appeal.

4. Availability of Alternative Statutory Remedy
The court emphasized that the petitioner should have availed of the statutory remedy by filing an appeal with the Commissioner of Central Excise (Appeals), Tiruchirapalli, instead of rushing to the High Court. The court refrained from addressing the legal contentions due to the availability of this alternative remedy and directed the petitioner to file an appeal within the prescribed period, excluding the time taken for the writ petition.

5. Modification of Earlier Court Orders Based on Changed Circumstances
The court considered the change in circumstances after the order dated 16-11-1995, which reduced the duty liability to Rs. 2,50,56,102/-. The court modified its earlier order, requiring the petitioner to pay Rs. 1,25,28,051/- in installments, with credit given for the amount already paid, leaving a balance of Rs. 62,78,051/- to be paid by 31-1-1996. The court allowed both parties to seek further directions if needed, based on the outcome of the appeal.

Conclusion
The court dismissed Writ Petition No. 16337 of 1995 and Writ Miscellaneous Petition No. 25963 of 1995, directing the petitioner to file an appeal before the Commissioner of Central Excise (Appeals), Tiruchirapalli. The court modified its earlier order to reflect the reduced duty liability and provided a new payment schedule for the petitioner. Both parties were given liberty to approach the court for further directions based on the appellate authority's decision.