2002 (5) TMI 60 - HC - Central Excise

Summary

Issues Involved:
1. Territorial Jurisdiction of the High Court.
2. Jurisdiction of CEGAT to interpret FTDR Act.
3. Applicability of Section 11A of the Excise Act regarding the recovery period.
4. Requirement of pre-deposit under Section 35(F) of the Excise Act.
5. Alternative remedy and its efficacy.

Issue-wise Detailed Analysis:

1. Territorial Jurisdiction of the High Court:
The Court examined whether it had jurisdiction to entertain the writ petition since the demand was raised on the company with its office in Calcutta, despite the cause of action arising outside its territorial jurisdiction. The Court concluded that since the demand was made on the petitioner at Calcutta and the appeal was transferred to CEGAT, Calcutta, it could exercise jurisdiction. The Court distinguished this case from the cited precedents, noting that the demand was on the company, not individual units.

2. Jurisdiction of CEGAT to interpret FTDR Act:
The petitioners contended that CEGAT lacked jurisdiction to interpret the FTDR Act, specifically regarding the authority of the Joint Development Commissioner to issue clarifications. The Court disagreed, stating that CEGAT is empowered to decide appeals and can interpret clarifications issued by other authorities, including whether such clarifications were validly issued under Section 13 of the FTDR Act.

3. Applicability of Section 11A of the Excise Act regarding the recovery period:
The petitioners argued that the excise duty could only be recovered for a period of six months unless there was fraud or collusion, which would extend the period to five years. The Court noted that this issue involved jurisdictional facts that CEGAT could determine. The Court referenced decisions indicating that extended limitation requires evidence of fraud or collusion, which are factual determinations suitable for CEGAT.

4. Requirement of pre-deposit under Section 35(F) of the Excise Act:
The Court considered whether the requirement of pre-deposit before hearing the appeal was onerous. It directed CEGAT to consider the petitioners' application for waiver or reduction of the pre-deposit, particularly for the period beyond six months, in light of the petitioners' contention that the re-opening was without jurisdiction due to lack of fraud or collusion.

5. Alternative remedy and its efficacy:
The Court addressed the argument that the alternative remedy of appeal to CEGAT was not efficacious due to the pre-deposit requirement. It held that while alternative remedies generally preclude writ jurisdiction, exceptions exist when the remedy is onerous. The Court directed CEGAT to take a considerate view on the pre-deposit requirement to ensure the alternative remedy was not unduly burdensome.

Order:
The writ petition was disposed of with directions to CEGAT to consider the waiver of pre-deposit within four weeks, if applied for, and to dispose of the appeal within three months. All points raised were left open for CEGAT to decide, and the jurisdictional question could be revisited in appropriate proceedings post-CEGAT's decision.