2005 (12) TMI 111 - HC - Central Excise

Summary

Issues involved:
1. Jurisdiction of Civil Courts to entertain suits questioning show cause notices.
2. Validity of injunction granted by lower Courts in favor of plaintiffs.

Analysis:

Issue 1: Jurisdiction of Civil Courts to entertain suits questioning show cause notices:
The primary contention raised by the Department was that the suits filed by the plaintiffs challenging the show cause notices issued by the Central Excise Department were not maintainable under Section 40 of the Central Excise Act, 1944. However, the contesting respondents argued that there was no specific bar in the Act against approaching Civil Courts to challenge the orders of Customs officers/authorities. The Court noted that the Department did not file a petition under Order 7 Rule 11(d) of the Civil Procedure Code (C.P.C.) to reject the plaints on the grounds of maintainability. The Court emphasized that if a specific issue regarding jurisdiction is raised, it must be decided before other issues. The absence of a specific jurisdictional issue being framed by the lower Courts was highlighted, and the need for a detailed examination of jurisdiction was stressed.

Issue 2: Validity of injunction granted by lower Courts in favor of plaintiffs:
In the cases where the plaintiffs sought injunctions against the Department from proceeding with the show cause notices, the lower Courts granted ex parte injunctions without proper consideration of jurisdictional aspects. The Court found that the lower Courts erred in granting injunctions without sufficient reasoning, especially when the Department did not contest the applications by filing counter affidavits. The Court emphasized that granting interim orders in the absence of the respondent/defendant without proper evaluation of the plaint averments was not acceptable. The Court directed the lower Courts to frame specific issues related to jurisdiction as the first issue and then proceed to decide other matters based on the outcome of the jurisdictional issue. The importance of a thorough examination of jurisdiction before proceeding with other issues was underscored, and the lower Courts were instructed to prioritize the cases for timely resolution.

In conclusion, the Court directed the respective lower Courts to give priority to the suits, frame specific jurisdictional issues, and decide the matters by a specified date while maintaining the status quo until a final decision is reached. The Court stressed the need for a comprehensive evaluation of jurisdictional matters before delving into other aspects of the cases. The Civil Revision Petitions were disposed of with these directions, emphasizing the importance of a detailed examination of jurisdiction before proceeding with the cases.