Court quashes orders, remits for fresh decision. Show cause notice challenge dismissed. Clarifications must be considered.

The court quashed the impugned orders and remitted the matter back to the respondent authority for a fresh decision in accordance with clarifications issued by the C.B.E. & C. and the trade notice by the Commissioner of Central Excise, Nagpur. The challenge to the show cause notice was dismissed, and the petitioner was directed to submit to the respondent authority for further proceedings. The court emphasized that clarifications and trade notices should be considered in deciding the matter afresh.

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Issues Involved:
1. Validity of the impugned orders and show cause notice.
2. Entitlement to concessional rate of excise duty.
3. Consideration of waste paper as unconventional raw material.
4. Availability of alternative remedy.
5. Retrospective application of clarifications and trade notices.

Detailed Analysis:

1. Validity of the Impugned Orders and Show Cause Notice:
The petitioner challenged three orders and a show cause notice issued by the respondent. The court found that these orders were based on an incorrect interpretation of the relevant notifications and failed to consider the clarifications issued by the Central Board of Excise & Customs (C.B.E. & C.) and the Commissioner of Central Excise, Nagpur. The court quashed the impugned orders and remitted the matter back to the authority for a fresh decision in light of the clarifications and trade notice.

2. Entitlement to Concessional Rate of Excise Duty:
The petitioner argued that they were entitled to a concessional rate of 10% ad valorem excise duty as per Notification No. 8/1996 and its subsequent modification by Notification No. 28/96, which required the pulp to contain not less than 75% by weight of unconventional raw materials. The court agreed with the petitioner, stating that the exemption depends on whether 75% or more of the pulp used in manufacturing the paper is made from unconventional materials.

3. Consideration of Waste Paper as Unconventional Raw Material:
The petitioner contended that waste paper should be considered an unconventional raw material. The court supported this view, referencing a Full Bench decision of the CEGAT and an order by the Deputy Commissioner, Central Excise & Customs, Rayagada Division, which held that waste paper, even if containing conventional materials, should be treated as an unconventional raw material for the purpose of granting exemption.

4. Availability of Alternative Remedy:
The respondent argued that the petitioner should have availed alternative remedies provided under the statute instead of approaching the High Court. The court rejected this argument, noting that the petition had been pending for 16 years and that the issue involved a narrow legal question. The court cited the Supreme Court's decision in L. Hirday Narain v. Income Tax Officer, Bareilly, which allowed the High Court to entertain the petition despite the availability of an alternative remedy.

5. Retrospective Application of Clarifications and Trade Notices:
The respondent contended that the clarifications and trade notices issued by the C.B.E. & C. and the Commissioner of Central Excise, Nagpur, should not be applied retrospectively. The court disagreed, stating that these clarifications were merely explanatory and did not alter the substance of the original notifications. The court emphasized that applying different procedures for different periods based on the same notification would lead to discriminatory treatment.

Conclusion:
The court quashed the impugned orders and remitted the matter back to the respondent authority for a fresh decision in accordance with the clarifications issued by the C.B.E. & C. and the trade notice by the Commissioner of Central Excise, Nagpur. The court dismissed the challenge to the show cause notice and directed the petitioner to submit to the authority of the respondent for further proceedings. The court held that the clarifications and trade notices should be considered while deciding the matter afresh.

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