High Court quashes ex parte order on duty demand, remands for fresh review

The Bombay High Court quashed the ex parte order under Section 35EE of the Central Excise Act, 1944, dated July 2011, and remanded the matter for fresh consideration. The Court found that the question of duty demand on damaged goods before clearance was not adequately addressed by the Revisional Authority, leading to the setting aside of the order. The case was restored to the Revisional Authority for reevaluation in line with the law, with no costs awarded.

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Issues: Challenge to ex parte order under Section 35EE of the Central Excise Act, 1944.

The judgment by the Bombay High Court involved a challenge to an ex parte order dated 14th July, 2011 passed by the Joint Secretary, Government of India under Section 35EE of the Central Excise Act, 1944. The petitioner had filed a petition to challenge this order, which was related to the recovery of duty on finished goods destroyed in floods in 2005. The Commissioner of Central Excise (Appeals) and the Revisional Authority had previously upheld the duty demand, leading to the petitioner filing the present appeal before the High Court.

The petitioner argued that the question of whether the Revenue was justified in demanding duty before the damaged goods were cleared had not been considered by the Revisional Authority. The petitioner contended that the duty demand while the damaged goods were still in the factory had not been addressed. The High Court agreed with this argument, stating that the issue of whether duty could be demanded while the damaged goods were still on the premises had not been answered by the Revisional Authority. Consequently, the High Court deemed it appropriate to set aside the ex parte order and remand the matter back for fresh consideration.

In the final ruling, the High Court quashed and set aside the impugned order of the Revisional Authority dated July 2011, and restored the matter to the file of the Revisional Authority for fresh consideration in accordance with the law. The High Court made the rule absolute in the above terms, with no order as to costs.

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