Assessee must exhaust statutory appeal under Section 35L for assessable value disputes; writ under Article 226 not maintainable

The SC held that valuation of assessable value by the Tribunal is a matter within the statutory excise appeal mechanism and the assessee should have invoked the remedy under Section 35L of the Central Excise Act rather than filing a writ under Article 226 before the HC. The Single Judge was correct that the statutory right of appeal must be exhausted first, and the Division Bench of the HC erred in entertaining the writ appeal. The decision was therefore in favor of the revenue, dismissing the writ route.

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Issues:
1. Jurisdiction of High Court under Article 226 of the Constitution of India in excise matters.
2. Availability of alternative remedy under Central Excise Act, 1944 for challenging orders of assessment.
3. Correct forum for challenging orders passed by the Tribunal.

Analysis:
1. Jurisdiction of High Court under Article 226: The case involved appeals against a judgment passed by the Division Bench of the High Court of Calcutta. The Division Bench set aside the orders passed by the Single Judge and remanded the matter for fresh disposal. The High Court, in exercise of its powers under Article 226, has vast powers to decide questions arising under the provisions of the Act. However, such powers can only be exercised when the statutory authority has not acted in accordance with the law or fundamental principles of judicial procedure have been violated.

2. Availability of Alternative Remedy: The Customs, Excise and Service Tax Appellate Tribunal had passed an order holding that the respondent was not entitled to include freight and insurance charges in the assessable value, which required recalculating the duty under the Central Excise Act, 1944. The respondent had filed a writ petition under Article 226 and 227 of the Constitution of India. The Single Judge disposed of the petition, directing the respondent to avail the alternative remedy provided by the Act. The Division Bench allowed the appeal, stating that the High Court could modify or annul orders passed by the Tribunal under the Act.

3. Correct Forum for Challenging Tribunal Orders: The Supreme Court emphasized that when a revenue statute provides a specific remedy for challenging an assessment, that remedy must be sought in the prescribed forum. The Court referred to previous judgments highlighting the importance of availing the remedy provided by the statute. In this case, the Tribunal's determination of the assessable value should have been challenged through an appeal under Section 35L of the Central Excise Act, 1944, rather than filing a writ petition before the High Court under Article 226. The Court concluded that the respondent should have exhausted the statutory appeal remedy first before seeking relief through a writ petition.

In conclusion, the Supreme Court allowed the appeals, setting aside the judgment of the Division Bench. The Court granted the respondent the liberty to file an appropriate appeal before the Court under the statute within two months if desired, clarifying that no opinion was expressed on the merits of the case. The judgment highlighted the importance of following the statutory appeal process in excise matters and the limitations of the High Court's jurisdiction under Article 226 in such cases.

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