1999 (7) TMI 84 - HC - Central Excise

Summary

Issues Involved:
1. Validity and constitutionality of Chapter Note 6 of Chapter 39 of the Central Excise Tariff Act, 1985.
2. Legality of show cause notices issued by the Central Excise authorities.
3. Maintainability of writ petitions against show cause notices.

Detailed Analysis:

1. Validity and Constitutionality of Chapter Note 6 of Chapter 39 of the Central Excise Tariff Act, 1985:

The petitioner challenged the validity of Chapter Note 6 of Chapter 39 of the Central Excise Tariff Act, 1985, arguing that it was unconstitutional. The petitioner contended that the conversion of cepol powder into cepol solution does not constitute "manufacture" as defined by law. They argued that the note stipulates another incidence of excise duty on solutions of bought cepol powder and PVA powder, which had already suffered duty under Chapter Heading 39, thus making it unconstitutional and contrary to the law laid down by the Supreme Court of India. The petitioner asserted that the change in the primary form (solid to liquid) does not result in the creation of a new commodity with distinct commercial identity, use, and name.

2. Legality of Show Cause Notices Issued by the Central Excise Authorities:

The petitioner sought to quash the show cause notices issued by the Central Excise authorities, which classified cepol solution as an excisable product under Chapter sub-heading 3912.31 of the Central Excise Tariff Act, 1985. The petitioner argued that the cepol solution is not a marketable product and cannot be used without being made into a solution, thus challenging the basis of the show cause notices. The respondents, on the other hand, contended that the conversion of cepol powder into cepol solution constitutes "manufacture" as per Note 6(b) of Chapter 39, which covers all primary forms of plastic conversion. They argued that the notices were based on factual information and that the petitioner should rebut the same through evidence and proof.

3. Maintainability of Writ Petitions Against Show Cause Notices:

The court held that writ petitions challenging show cause notices are not maintainable, as established by precedents (1993 (66) E.L.T. 179 (DB) and 1995 (76) E.L.T. 576). The court emphasized that the petitioner should respond to the show cause notices and present their case during the adjudication process rather than seeking judicial intervention at this preliminary stage. The court noted that the petitioner had adequate and effective remedies available, including the right to appeal to the CEGAT, which is the highest fact-finding authority. The court viewed the writ petitions as an attempt to prolong the issue and stall the finalization of the matter.

Conclusion:

The court concluded that the petitioners failed to make out a case in their favor and found no merit in the writ petitions. The court dismissed the writ petitions and the interim orders, emphasizing that the petitioner should participate in the adjudication proceedings and exhaust available remedies before seeking judicial intervention.

Final Order:

All writ petitions were dismissed for lack of merit, and the interim orders were vacated. No costs were awarded.