1997 (11) TMI 107 - HC - Central Excise

Summary

Issues:
Challenge to assessment orders under Art. 226 of the Constitution of India, review of assessment method, excise duty on asbestos cement products, validity of price lists, jurisdiction to review orders, availability of statutory remedy of appeal under S. 35F of the Act, exercise of extraordinary powers by the High Court under Art. 226.

Analysis:

The petitioners challenged assessment orders under Art. 226 of the Constitution of India, contesting the review of the assessment method by authorities through orders Annexure-G and H. Petitioner No. 1, a company manufacturing asbestos cement products in a backward area, received incentives from the State Government. The excisable goods manufactured by the company attracted a 25% ad valorem duty and a special excise duty. The petitioner submitted price lists under Rule 173C of the Central Excise Rules for determination of assessable value under S. 4 of the Central Excises and Salt Act, 1944.

The petitioners argued that their price lists were duly approved in previous years without objections. They highlighted the difference in prices between goods sold in Madhya Pradesh and other states due to tax exemptions. Despite regular excise duty payments based on approved price lists, the authorities issued notices in 1990 to review the price lists, leading to modified orders and a demand for higher excise duty payments. Instead of appealing under S. 35F of the Act, the petitioners invoked Art. 226 of the Constitution.

The respondents contended that the orders were appealable under S. 35F, emphasizing the availability of a statutory remedy. The petitioners argued that the authorities lacked the power to review orders, citing a judgment set aside by the Supreme Court. They urged the High Court to set aside the impugned orders based on the absence of review powers conferred on authorities.

The High Court considered the arguments, noting the availability of an alternative remedy of appeal under S. 35F of the Act. Referring to precedent, the Court held that the petitioners should pursue the statutory appeal route before the Appellate Authority. The Court directed the petitioners to file appeals within 30 days, emphasizing the need for the Appellate Authority to grant a hearing and pass a reasoned order.

The Court, while condoning the delay in filing appeals, maintained the interim stay order until the disposal of the appeals due to the backlog of cases at the Appellate Authority. The petition was disposed of without costs, with any security deposit to be refunded to the petitioners after verification.