2002 (6) TMI 53 - HC - Central Excise

Issues Involved:
1. Jurisdiction of the Commissioner of Customs & Central Excise.
2. Applicability of extended period of limitation under Section 11A of the Central Excise Act, 1944.
3. Alleged suppression or misstatement of facts by the petitioner.
4. Determination of assessable value including profit margin.
5. Imposition of penalties and interest under Sections 11AC, 11AB, and Rule 173Q of the Central Excise Rules, 1944.
6. Availability and adequacy of alternative remedy of appeal.

Detailed Analysis:

1. Jurisdiction of the Commissioner of Customs & Central Excise:
The petitioner challenged the orders dated January 18, 2001, and February 9, 2001, on the grounds that the Commissioner lacked jurisdiction. The petitioner argued that the appeal under Section 25F of the Central Excise and Customs Act was onerous due to the requirement to deposit the adjudged duty before filing an appeal. The court examined whether the orders were issued without jurisdiction and found that the Commissioner had the authority to reopen accepted/approved declarations if new facts were discovered, as per the proviso to Section 11A(1) of the Act.

2. Applicability of Extended Period of Limitation under Section 11A:
The petitioner contended that the extended period of limitation was not applicable as the department had knowledge of the balance sheets since 1995. The court noted that the extended period of five years could be invoked if there was suppression or wilful misstatement of facts. The Commissioner found that the petitioner had not filed price declarations for several years and had not included the profit margin in the assessable value, thereby justifying the invocation of the extended period.

3. Alleged Suppression or Misstatement of Facts:
The show cause notice alleged that the petitioner wilfully misstated facts by not disclosing the profit margin in the price declarations. The Commissioner concluded that the petitioner had suppressed information, as the profit margins were not included in the assessable value despite being evident from the balance sheets. The court upheld this finding, noting that the petitioner's failure to file revised price lists or declarations supported the conclusion of suppression.

4. Determination of Assessable Value Including Profit Margin:
The Commissioner determined that the assessable value should include the profit margin as per Section 4(1)(b) of the Act read with Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975. The petitioner's argument that their cost of production fell and thus no profit margin was required was rejected. The court agreed with the Commissioner's conclusion that the petitioner's failure to file revised price lists indicated an intention to evade duty.

5. Imposition of Penalties and Interest:
The Commissioner imposed penalties and interest under Sections 11AC, 11AB, and Rule 173Q, citing the petitioner's suppression of facts and intention to evade duty. The court found no fault with the imposition of penalties and interest, noting that the petitioner's actions justified such measures.

6. Availability and Adequacy of Alternative Remedy of Appeal:
The petitioner argued that the alternative remedy of appeal was onerous due to the requirement to deposit the duty before filing an appeal. The court held that the statutory requirement to deposit duty was not onerous and that the petitioner should avail the remedy of appeal. The court cited precedents where the availability of an alternative remedy was deemed adequate, and direct interference in writ jurisdiction was discouraged.

Conclusion:
The court dismissed both writ petitions, granting the petitioner liberty to avail the alternative remedy of appeal. The court emphasized that the orders passed by the Commissioner were not without jurisdiction and involved disputed factual aspects that required proper investigation through the appellate process.

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