2019 (10) TMI 485 - HC - Central Excise

Maintainability of petition - alternative remedy of appeal - Area based exemption - certain excise benefits which a new unit is liable to get in form of excise and income tax exemptions given in Uttarakhand for a certain period of time, to new units - HELD THAT - The petitioners have a statutory remedy in form of Section 35B of the Central Excise Act, 1944 before the Customs Excise and Service Tax Appellate Tribunal. This Court has been informed that the petitioners have already filed an appeal before the Appellate Authority. However, the petitioners have to deposit a statutory amount which is 7.5% of the total disputed demand, before the appellate authority. The petitioners have not deposited this statutory deposit, which is mandatory demand as per Section 35F of the aforesaid Act. This writ petition is totally misconceived for various reasons. Firstly, there is a statutory remedy available to the petitioners under Section 35B read with Section 35F of the Central Excise Act, 1944 and secondly, the petitioners have already availed this remedy. However, they have to deposit a statutory demand of 7.5% before the appellate authority before the matter could be heard. The petitioners in order to escape from this statutory liability of depositing of 7.5% of the demand amount have filed this writ petition. This is not permissible. Petition dismissed.

Summary

Issues: Petitioners claiming excise benefits, failure to pass on benefits, appeal before the Appellate Tribunal, mandatory deposit under Section 35F, challenge to the authority's decision, writ petition filed.

Analysis:
1. The petitioners, a private limited company and its Managing Director, sought excise benefits available to new units in Uttarakhand. They claimed that the benefits should have been passed on to them after taking over a business of manufacturing corrugated boxes in 2016. The Commissioner dismissed their claim, leading the petitioners to approach the Central Goods & Service Tax Commissioner. The petitioners have a statutory remedy under Section 35B of the Central Excise Act, 1944, and have already filed an appeal before the Appellate Authority.

2. Section 35F of the Central Excise Act, 1944 mandates the deposit of a certain percentage of the disputed demand before filing an appeal. The petitioners failed to deposit the required 7.5% of the total disputed demand, which is a mandatory requirement under the Act. The petitioners, instead of complying with this statutory provision, filed a writ petition challenging the authority's decision, alleging lack of consideration of documentary evidence among other grounds.

3. The Court found the writ petition to be misconceived for several reasons. Firstly, the petitioners had a statutory remedy available under Section 35B read with Section 35F, which they had already availed by filing an appeal. However, the failure to deposit the statutory amount of 7.5% before the Appellate Authority hindered the matter from being heard. The Court noted that the petitioners filed the writ petition to avoid the mandatory deposit, which is impermissible under the law.

4. Consequently, the Court dismissed the writ petition, stating that it was entirely misconceived and lacked merit. The petitioners' attempt to circumvent the statutory requirement of depositing the demanded amount before the appellate authority by filing the writ petition was deemed unacceptable. The judgment reaffirmed the importance of adhering to statutory provisions and exhausting available remedies before seeking recourse through writ petitions.