1998 (2) TMI 130 - HC - Central Excise

Summary

Issues:
Challenge to notification withdrawing exemption under Central Excise Act, jurisdiction of the High Court, maintainability of the writ petition, violation of Article 14 of the Constitution, discretion of the Central Government in granting exemptions.

Analysis:

The petitioner challenged a notification under the Central Excise Act that withdrew an exemption, making the petitioner liable to pay duty that was previously exempt. The petitioner had imported a ship for breaking up before a certain date, and the exemption was later withdrawn, leading to a demand for duty payment. The petitioner had paid customs duty but not the specific duty rate per light displacement tonnage.

The High Court considered the jurisdiction issue raised by the Central Government, arguing that the cause of action did not arise within the state where the High Court is located. The Court emphasized that a reasonable link between the impugned notification and an act within the state is necessary to establish jurisdiction, which the petitioner failed to demonstrate in this case.

Regarding the maintainability of the writ petition, the Court noted that the liability to pay excise duty arose in a different state, and the petitioner's residence in the current state was irrelevant to determine the jurisdiction. The Court also highlighted that the Collector's order, which was not challenged, did not provide a cause of action to question the notifications in the current Court.

On the merits, the Court rejected the petitioner's claim of a violation of Article 14 of the Constitution. It explained that even if the later notification was struck down, the earlier repealed notification could not be revived. The Court also clarified that it could not direct the Central Government to extend exemptions to a class not covered by the notification.

The Court cited a Supreme Court decision emphasizing the wide discretion of the Government in granting, modifying, or repealing exemptions. Ultimately, the Court dismissed the writ petition, stating that the petitioner failed to establish a cause of action within the state and that the discretion to grant exemptions lies with the Central Government.