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TMI Blog1993 (9) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... and Salt Act, 1944 or to pay excise duty. The respondents dispute this and claim that the petitioners are manufacturing the pipes from bars and are thus liable to pay the excise duty. The record of the case is fairly sizable. However, the point that arises for consideration is short viz. Are the petitioners manufacturing pipes from bars and thus liable to pay excise duty? Can this question be determined in a writ petition? Learned counsel for the parties have referred to the facts as averred in Civil Writ Petition No. 10438 of 1989 only. These may be briefly noticed. 2.The petitioner is a private Limited Company. It has set up a small Scale Unit for the manufacture of "conduit pipes with Electrical Resistance Welding Process....". It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay "the difference of Rs. 200 per M.T., as the department is suffering this loss on account of the stay orders granted by the High Court." It is averred that vide notification dated May 20, 1988, the tubes and pipes manufactured with the use of strips and flats of thickness not exceeding 5 mm. have been exempted from duty. On this basis, it is claimed that the goods manufactured by the petitioner are totally exempt from payment of Central Excise and that the impugned order is arbitrary and illegal. It has been challenged as being violative of Section 11A of the Central Excise Act, 1944 and the principles of natural justice. On this basis, the petitioner claims that the order dated august 9, 1989 calling upon it to obtain a licence and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed by the respondent is legal and valid. 6.The petitioner has filed a replication. The averments made in the petition have been reiterated. It has been further averred that "the petitioner is manufacturing pipes and tubes by Electrical Resistance Welding (for short ERW process) and by this process pipes and tubes can only be manufactured from flat rolled products. Pipes cannot be manufactured from bars. This position has been accepted by the Central Excise department in their written statement, with which they had attached Annexure R-3, filed in CWP No. 7747 of 1989......". Reference has also been made to the orders passed by the Central Excise Gold Appellate Tribunal, in certain cases. 7.I have heard the learned counsel for the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to obtain a licence and cannot conduct his business "in regard to such goods otherwise than by the authority, and subject to the terms and conditions of a licence granted by a duly authorised officer in the proper form." 11.Rule 174A authorises the Central Government to exempt from the operation of Rule 174 any goods or class of goods which are wholly exempted from the duty of excise leviable thereon or any class of manufacturers who get their goods manufactured on their account from other person or persons or the goods which are produced or manufactured in a free trade zone. Unless specifically exempted by a notification in the official Gazette, no person can engage in the production or manufacture of any goods specified in the Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... They claim that the petitioner is using bars. From the record, it is evident that the petitioner had been purchasing bars below 3 mm in thickness from A.K. Steel Industries. Copies of the two documents produced by the petitioner as Annexures P. 5 and P. 6 with the writ petition clearly show the purchase of bars. In this situation, it cannot be said that the respondents have raised a totally false plea or that the petitioner has never used bars in the process of manufacturing pipes. In any case, there is a real controversy on facts which cannot be resolved in writ proceedings. The only forum competent to decide this matter is the Department. 15.Mr. Sawhney, however, tried to demonstrate that it is unthinkable that a manufacturer of pipes w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C) = AIR 1987 SC 1161 and Union of India Ors. v. Medhumilan Syntex Pvt. Ltd. Anr., 1988 (35) E.L.T. 349 (SC) = AIR 1988 SC 1236. Neither of these cases has any application to the facts of the present case. In Gokak Patel's case, it was inter alia held that the issue of a notice is a condition precedent to the raising of a demand under Section 11A(2). Similarly, in Madhumilan Syntex's case, it was held that before any demand was made on any person in respect of "non-levy or short-levy or under payment of duty, in notice requiring him to show cause why he should not pay the amounts specified in the notice, must be served on him. In the present case, no demand whatsoever had been made for payment of any amount of money. The petitioner had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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