2001 (9) TMI 111 - HC - Customs

Summary

Issues Involved:
1. Applicability of Rule 9A(1)(ii) versus Rule 9A(5) of the Central Excise Rules, 1944.
2. Period of limitation for the demand of excise duty under Section 11A of the Central Excise and Salt Act, 1944.
3. Maintainability of the writ petition under Article 226 of the Constitution of India.

Detailed Analysis:

1. Applicability of Rule 9A(1)(ii) versus Rule 9A(5) of the Central Excise Rules, 1944:
The appellant contended that the first respondent could not order the payment of excise duty under Rule 9A(1)(ii) of the Rules but should have applied Rule 9A(5), which exempts unmanufactured tobacco from excise duty effective from 1-3-1979. However, the court found that Rule 9A(1)(ii) was applicable as the illegal receipt of tobacco occurred before the withdrawal of excise duty on unmanufactured tobacco on 1-3-1979. Therefore, Rule 9A(5) could not be applied retrospectively to contraventions that occurred prior to this date. The court upheld the levy of excise duty under Rule 9A(1)(ii).

2. Period of Limitation for the Demand of Excise Duty under Section 11A of the Central Excise and Salt Act, 1944:
The appellant argued that the demand for excise duty was barred by the limitation period specified under Section 11A of the Act. The court noted that the proviso to Section 11A extends the limitation period to five years in cases involving fraud, collusion, or any willful misstatement or suppression of facts. Since the illegal receipt of tobacco was discovered upon investigation and a show cause notice was issued promptly, the demand was within the extended limitation period. The court held that the proceedings were initiated within the permissible time frame and the appellant's contention on the limitation period was untenable.

3. Maintainability of the Writ Petition under Article 226 of the Constitution of India:
The court observed that the appellant had not challenged the order of the Collector of Central Excise, Madurai, dated 30-3-1981, which was the basis for the impugned order. The appellant had also opted to withdraw the reference application before the Tribunal, thereby precluding the possibility of a judicial review of the legal questions involved. Citing the decision in Sharma Trolly Manufacturers v. Customs, Central Excise and Gold (Control) Appellate Tribunal, the court held that the writ petition was not maintainable as the appellant had an alternative remedy under Section 35G of the Act. Consequently, the court upheld the dismissal of the writ petition.

Conclusion:
The court dismissed the writ appeal, affirming the applicability of Rule 9A(1)(ii) for the levy of excise duty on the illegal receipt of tobacco prior to 1-3-1979, and ruled that the demand was within the extended limitation period under Section 11A of the Act. The writ petition was deemed not maintainable due to the availability of an alternative remedy, and the appellant's failure to challenge the foundational order of the Collector of Central Excise.