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2015 (11) TMI 966 - SC - Central ExciseValidity of the show cause notice - Jurisdiction of Civil Court - Section 9 of the Code of Civil Procedure inasmuch as the Central Excise Act provides for complete machinery for adjudication of such disputes - suit filed against the show cause notice was premature and there was no cause of action to file such a suit when the said show cause notice was yet to be adjudicated upon - Held that - The appellant had simply issued the show cause notice to respondent no. 1. This notice has been issued under the provisions of Central Excise Act. The validity of such a show cause notice could not be gone into in a suit filed by the noticee. As rightly pointed out by Mr. Radhakrishnan, various provisions of the Central Excise Act provide for complete machinery for adjudication of such show cause notice. Opportunity was given to respondent no.1 to reply to the said show cause notice. After grant of hearing, the Adjudicating Authority was supposed to pass the order on the show cause notice. There is a provision in challenging such an order by filing appeal. In this scenario, we are of the opinion that the jurisdiction of the Civil Court is clearly barred under Section 9 of the Code of Civil Procedure on the principles laid down by this Court in Dhulabhai vs. State of M.P. 1968 (4) TMI 64 - SUPREME COURT OF INDIA - Even otherwise, when the matter was still at the show cause notice stage and no adverse order has been passed against respondent no. 1, there was no cause of action to file such a suit. We, thus, set aside the impugned order of the High Court - Decided in favour of Revenue.
Issues involved:
1. Jurisdiction of Civil Court to entertain a suit challenging a show cause notice under the Central Excise Act. 2. Prematurity of the suit filed before the City Civil Court challenging the validity of the show cause notice. Detailed Analysis: 1. The appellant issued a show cause notice under the Central Excise Act to the respondent proposing to recover a sum. Instead of replying, the respondent filed a suit challenging the notice's validity in the City Civil Court. The appellant contended that the Civil Court lacked jurisdiction as the Central Excise Act provides a complete adjudication mechanism for such disputes. The High Court remanded the case to the Trial Court without deciding on the jurisdiction issue. The Supreme Court held that the Civil Court's jurisdiction was impliedly barred under Section 9 of the Code of Civil Procedure. Referring to the case of Dhulabhai vs. State of M.P., the Court emphasized that where a statute gives finality to tribunal orders, Civil Court jurisdiction is excluded if adequate remedies exist within the statutory framework. The Court concluded that the Civil Court lacked jurisdiction to entertain the suit challenging the show cause notice. 2. The Court also addressed the prematurity of the suit filed by the respondent before any adverse order was passed on the show cause notice. The Central Excise Act provides for a mechanism to challenge orders through appeal, making the suit premature. The Court highlighted that Section 35(c)(iv) of the Act specifies that orders passed by the Appellate Tribunal on appeal shall be final. Since no adverse order had been issued against the respondent at the show cause notice stage, there was no cause of action to file the suit. Consequently, the Court set aside the High Court's order and dismissed the suits filed by the respondent. The appeal was allowed, affirming the dismissal of the suits. In conclusion, the Supreme Court clarified the jurisdictional limits of Civil Courts in matters concerning show cause notices under the Central Excise Act and emphasized the importance of following the statutory adjudication procedures before seeking recourse in Civil Courts. The judgment reaffirmed the principle that premature challenges to administrative actions, without exhausting available remedies, are not maintainable in Civil Courts.
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