2005 (9) TMI 104 - HC - Central Excise

Summary

Issues:
Challenge to the vires of Rule 6 of Cenvat Credit Rules, 2002, and Rule 6 of Cenvat Credit Rules, 2004; Interpretation of Rule 6(3)(b) of the Cenvat Credit Rules; Jurisdiction of the High Court in entertaining a writ petition at this stage.

Analysis:
The petitioner challenged the vires of Rule 6 of Cenvat Credit Rules, 2002, and Rule 6 of Cenvat Credit Rules, 2004, through a writ petition before the High Court. The petitioner contended that Rule 6 was ultra vires the provisions of the Central Excise Act. After the Commissioner passed an order rejecting the petitioner's objections and demanding duty with penalties, the petitioner did not appeal to the Central Excise and Service Tax Tribunal as provided under Section 35B of the Central Excise Act. Instead, the petitioner filed a writ petition seeking various reliefs, including declaring Rule 6 unconstitutional and quashing the proceedings of show cause notices. The petitioner's counsel argued that the Commissioner's interpretation of Rule 6(3)(b) was erroneous and unsustainable, and if upheld, would render the rule ultra vires. However, the High Court held that the matter should be raised before the Tribunal in an appeal, and the vires of the provision could be challenged if necessary after the Tribunal's decision.

The High Court carefully considered the submissions made by the petitioner's counsel but found them unconvincing. The Court emphasized that the order passed by the Commissioner, determining duty and levying penalties, was appealable before the Tribunal under Section 35F of the Act. Any arguments regarding the interpretation of the provisions or constitutionality of the rules should be raised in the appeal before the Tribunal. The Court noted that the Tribunal's previous decision did not address the interpretation advanced by the petitioner's counsel, leaving the matter open for consideration. The Court clarified that the question of the rules' constitutionality would only arise if the petitioner's interpretation was rejected by the Tribunal. As the petitioner had the remedy of an appeal, the High Court dismissed the writ petition, granting liberty to the petitioner to file an appeal before the Tribunal and challenge the constitutional validity of Rule 6(3)(b) if necessary. The Court highlighted that the vires of the provision could be raised when required, which had not yet arisen in the present case.