High Court rules on territorial jurisdiction over excise duty refund challenge; petitioners directed to seek remedy before CESTAT

The High Court held that it did not have territorial jurisdiction to entertain a petition challenging excise duty refund orders due to the Excise Authorities being located in Orissa. The petitioners, a unit in a Special Economic Zone, sought to quash an Order-in-Appeal regarding the refund of central excise duty but were denied relief by the Deputy Commissioner and the Appellate Commissioner. The Court emphasized the availability of an alternative remedy before the CESTAT in Orissa and disposed of the petition accordingly.

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Issues: Territorial jurisdiction of the High Court for challenging excise duty refund orders.

Analysis:
1. The petitioners sought to quash an Order-in-Appeal passed by the Commissioner (Appeals) regarding the refund of central excise duty amounting to 44.34 crores. The respondents opposed the petition primarily on the grounds of territorial jurisdiction.

2. The petitioners, a unit in a Special Economic Zone, had purchased coal from a supplier in Orissa and claimed exemption from excise duty. Their refund applications were rejected by the Deputy Commissioner and the Appellate Commissioner, who doubted their jurisdiction to entertain the refund claims due to the SEZ location. Despite considering the jurisdiction issue, both authorities denied the refund, prompting the petitioners to challenge these orders. The respondents raised concerns about territorial jurisdiction in response.

3. The petitioners argued that the High Court's writ jurisdiction can extend extraterritorially, citing the consumption of coal at their SEZ unit as a significant part of the cause of action. They relied on legal precedent to support their position.

4. On the other hand, the Department's counsel contended that since both Excise Authorities were in Orissa where the refund claims and appeals originated, the High Court lacked jurisdiction to hear the petition. The appellate order was also appealable to the CESTAT, further supporting the argument against the High Court's jurisdiction.

5. The Court noted that the Excise Authorities involved were located in Orissa, and any further appeal would be within the jurisdiction of the CESTAT in Orissa. Despite the legal precedent cited by the petitioners, the Court held that the High Court did not have territorial jurisdiction to entertain the petition challenging the excise duty refund orders. Therefore, the petition was disposed of accordingly, emphasizing the availability of an alternative remedy before the CESTAT in Orissa.

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