2007 (5) TMI 249 - HC - Central Excise

Maintainability of Appeal to High Court - Words and Phrases - Interpretation - Held that - whereever the dispute as to whether notification is applicable or not is raised, then the appeal would not be maintainable before this Court. The direct and proximate issues involved in the appeal for the purposes of assessment relate to the rate of duty applicable to the goods and the value thereof and the issue requiring determination of the status of the subject Unit would be one of the incidental issues - the subject appeal is not tenable before this Court. Appeal dismissed.

Issues Involved:
1. Maintainability of the appeal before the High Court under Section 35G of the Central Excise Act, 1944.
2. Rate of duty applicable to the goods cleared to the Domestic Tariff Area (DTA).
3. Valuation of goods for purposes of assessment.
4. Determination of the status of the unit (EOU or EPCG).
5. Retrospective application of debonding status.

Detailed Analysis:

1. Maintainability of the Appeal:
The core issue raised by the Revenue was the maintainability of the appeal before the High Court under Section 35G of the Central Excise Act, 1944. The Revenue contended that the appeal should lie with the Supreme Court under Section 35L of the Central Excise Act as it involved questions relating to the rate of duty and valuation of goods. The High Court referred to the statutory provisions and relevant case law, including the Supreme Court's decision in Navin Chemicals Mfg. & Trading Co. Ltd. v. Collector of Customs, which clarified that issues relating to the rate of duty and valuation for assessment purposes fall within the jurisdiction of the Supreme Court.

2. Rate of Duty Applicable to Goods Cleared to DTA:
The appellant contended whether they could be asked to pay excise duty at a higher rate applicable for alleged DTA clearances from an EOU under the proviso to Section 3 of the Excise Act. The Revenue argued that the applicable rate of duty would be determined based on whether the unit was classified as an EOU or an EPCG unit. The High Court noted that determining the rate of duty on goods cleared to the DTA was a direct and proximate issue for assessment, thus falling under the jurisdiction of the Supreme Court.

3. Valuation of Goods for Purposes of Assessment:
The dispute involved the valuation of both finished goods (optical fibre) and intermediate products (deperforms). The appellant argued that the valuation should be based on contemporaneous import value, while the Revenue contended it should be based on transaction value/valuation concepts. The High Court concluded that issues relating to the valuation of goods for assessment purposes were integral to determining the rate of duty, thus reinforcing the jurisdiction of the Supreme Court.

4. Determination of the Status of the Unit (EOU or EPCG):
The appellant emphasized that the primary issue was the determination of the unit's status, which would influence various aspects, including the quantum and periodicity of export obligations and the applicable excise duty. The High Court, however, held that the determination of the unit's status was a step in the assessment process and was incidental to the core issues of rate of duty and valuation, thereby falling under the Supreme Court's jurisdiction.

5. Retrospective Application of Debonding Status:
The appellant questioned whether the debonding of the EOU unit should relate back to the date of import or the application date for debonding (6-10-2001). The High Court noted that this issue was also intertwined with the assessment process, as it would affect the rate of duty and valuation of goods.

Conclusion:
The High Court sustained the preliminary objection raised by the Revenue, holding that the appeal was not tenable before the High Court and should be directed to the Supreme Court. The appeal was dismissed without prejudice to the appellant's rights to approach the appropriate forum for reliefs. No contentions on the merits of the appeal were considered.

← Previous Next →