2008 (4) TMI 153 - HC - Central Excise

Court dismisses writ petition on food product classification, directs petitioner to exhaust statutory remedies first

The court dismissed the writ petition concerning the classification of food products under the Central Excise Tariff Act, stating that the issues required ... Petition cannot be entertained unless it is established before the High Court that the action of the respondent is perverse – whether there was suppression or not , whether there was manufacture or not & question of classification – impugned question should be decided by authority after getting reply of SCN from petitioner – these questions cannot be decided by means of an affidavit and counter affidavit - petition is not maintainable – petitioner is directed to reply to SCN within 8 weeks Issues Involved:1. Classification of 'SAKTHI'/'STC' branded Bajji Bonda Powder.2. Classification of 'SAKTHI'/'STC' branded Tamarind Rice Powder, Lemon Rice Powder, Garlic Rice Powder, Dhall Powder, and Chilly Chutney Powder.3. Invocation of the extended period under the proviso to Section 11A(1) of the Central Excise Act, 1944.4. Imposition of penalty under Section 11AC of the Central Excise Act, 1944, and Rule 25 of the Central Excise Rules, 2002.Detailed Analysis:1. Classification of 'SAKTHI'/'STC' branded Bajji Bonda Powder:The petitioner argued that the product should be classified under Chapter 9 of the Central Excise Tariff Act, 1985, as it retains the essential characteristics of spices. The respondents contended that the product should fall under Sub Heading 2108.99 of the erstwhile First Schedule and 2106.9099 of the present First Schedule to the Central Excise Tariff Act, 1985. The court noted that the classification issue requires a detailed factual analysis, which cannot be resolved in a writ petition and should be addressed by the appropriate authorities.2. Classification of 'SAKTHI'/'STC' branded Tamarind Rice Powder, Lemon Rice Powder, Garlic Rice Powder, Dhall Powder, and Chilly Chutney Powder:The petitioner maintained that these products should also be classified under Chapter 9, similar to the Bajji Bonda Powder. The respondents, however, argued for classification under Sub Heading 2103.90 of the erstwhile First Schedule and 2103.9040 of the present First Schedule to the Central Excise Tariff Act, 1985. The court reiterated that such classification disputes involve complex factual determinations that are not suitable for adjudication under writ jurisdiction.3. Invocation of the extended period under the proviso to Section 11A(1) of the Central Excise Act, 1944:The petitioner challenged the invocation of the extended period, arguing that there was no suppression of facts or misrepresentation, and that the products had been previously classified under Chapter 9 with the Department's approval. The respondents countered that there was suppression and misrepresentation, justifying the invocation of the extended period. The court held that whether there was suppression or misrepresentation is a factual issue that needs to be decided by the authorities after considering the petitioner's reply to the show cause notice.4. Imposition of penalty under Section 11AC of the Central Excise Act, 1944, and Rule 25 of the Central Excise Rules, 2002:The petitioner contended that the penalty provisions should not be invoked as there was no deliberate suppression or misstatement. The respondents argued that the penalty was justified due to the petitioner's actions. The court emphasized that the imposition of penalties involves factual determinations that should be made by the authorities after a thorough examination of the evidence and the petitioner's explanations.Conclusion:The court dismissed the writ petition, stating that the issues raised involve complex factual determinations that are not suitable for resolution under writ jurisdiction. The petitioner was directed to respond to the show cause notice, and the authorities were instructed to proceed in accordance with the law. The court stressed the importance of exhausting statutory remedies before seeking judicial intervention in fiscal matters.