2022 (5) TMI 1248 - HC - Central Excise

Constitutional validity of amendment in the Area Based exemption - Denial of benefit of exemption - exclusion of a particular khasra in the Excise Notification - Benefit of N/N. 50/2003 CE dated 10.06.2003 - waiver of pre-deposit - HELD THAT - It is apparent from the record that the Court has proceeded to take a view that, even if there is a mistake in not including certain khasra numbers, the Court would be encroaching on the policy matters, if it was to be persuaded to issue a direction to include specified khasra numbers. It is apparent from the prayer clause of the writ petition that the petitioner says that exclusion of a particular khasra in the Excise Notification No. 50/2003-CE dated 10.06.2003 is merely procedural, still, it touches upon the policy of the State Government and, hence, should not be rightly interfered by the Court exercising review jurisdiction under Article 226 of the Constitution of India. The writ petition stands dismissed.

Summary

Issues:
1) Interpretation of the constitutional validity of Area Based exemption under notification No. 50/2003 CE.
2) Inclusion of specific industrial unit for Central Excise exemption.
3) Validity of an adjudication order and its quashing.
4) Ad-interim relief for keeping demands in abeyance.
5) Review of policy matters by the Court under Article 226 of the Constitution of India.

Issue 1 - Interpretation of Constitutional Validity of Area Based Exemption:
The petitioner sought a writ to read down the constitutional validity of Area Based exemption under notification No. 50/2003 CE, aiming to confer Central Excise exemption to their industrial unit. They argued that the benefit flows directly from an Office Memorandum dated 07.01.2003. The petitioner emphasized that the exclusion of their unit from the notification should not deny them the substantial benefit of Central Excise exemption. However, the Court noted that interfering with the exclusion would encroach upon state policy matters and declined to admit the writ petition, ultimately dismissing it.

Issue 2 - Inclusion of Specific Industrial Unit for Central Excise Exemption:
The petitioner specifically sought the inclusion of their industrial unit in the Central Excise exemption list. The Court referred to a previous judgment where a similar request for inclusion had been discussed and denied. The Court emphasized that the denial of such requests should be treated as implied refusals, citing the principle of res judicata. The Court reiterated that interfering with decisions regarding the inclusion of specific units would be delving into policy matters beyond the Court's purview.

Issue 3 - Validity of Adjudication Order and Its Quashing:
The petitioner requested the quashing of an adjudication order dated 08.02.2022, arguing that it was non-est in law. The Court did not find merit in this argument and declined to grant relief, stating that the order was valid and enforceable. The Court also refused to keep the hearings of related appeals in abeyance, emphasizing the need to follow due process.

Issue 4 - Ad-Interim Relief for Keeping Demands in Abeyance:
As an ad-interim relief, the petitioner requested that the demand, penalty, and interest mentioned in the adjudication order be kept in abeyance during the pendency of the writ petition. The Court did not find grounds to grant this relief and dismissed the request, indicating that the demands should proceed as per the adjudication order.

Issue 5 - Review of Policy Matters by the Court:
The Court highlighted that reviewing policy matters, such as the inclusion of specific units in exemption notifications, falls outside the scope of the Court's review jurisdiction under Article 226 of the Constitution of India. The Court emphasized that such decisions are within the purview of the state government's policy-making authority and should not be interfered with by the Court. Consequently, the Court dismissed the writ petition and disposed of the stay application.