Court quashes Central Excise Duty order, cites circular violation

The Court held that the impugned order upholding the Central Excise Duty demand, interest, and penalty, along with the extension of the limitation period under Section 11A(4) of the Central Excise Act, 1944, was contrary to a circular by the Government of India. The Court directed that the order should not be enforced until the next hearing and allowed the petitioner to approach the Court despite the availability of an alternative remedy. The case was listed for further proceedings after three weeks.

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Issues involved:
Challenge to impugned order dated 26.03.2018 upholding Central Excise Duty demand, imposition of interest and penalty, extension of limitation period under Section 11A(4) of Central Excise Act, 1944, contrary to circular by Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Customs dated 16.02.2018 and judicial precedents.

Analysis:
The petitioner challenged the impugned order dated 26.03.2018, which upheld the demand for Central Excise Duty, including Cess and Secondary & Higher Education Cess, amounting to Rs. 61,53,373, and imposed interest and penalty. The Additional Commissioner extended the limitation period under Section 11A(4) of the Central Excise Act, 1944. The petitioner argued that this extension was contrary to a circular issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Customs on 16.02.2018. The circular clarified that the extended period should not be used to raise the demand, citing relevant Supreme Court decisions. The petitioner contended that the impugned order was against the court's observations and the circular, yet the Additional Commissioner proceeded with the order based on the extended limitation period.

The respondent, representing the department, highlighted that the impugned order allowed for an appeal to the Commissioner (Appeals), Customs and Central Excise Department, Guwahati, upon payment of necessary duty. Referring to a Supreme Court judgment, the respondent argued that where an alternative remedy exists, it should be pursued, as mandated by Section 35 of the Act. In response, the petitioner cited another Supreme Court decision, stating that if the impugned action had clear defects or errors, the availability of an alternative remedy should not prevent approaching the court.

After considering the arguments, the Court observed that the circular dated 16.02.2018 clearly stated that the extended period should not be used to raise demands, a position endorsed by the Court. Consequently, the availability of an alternative remedy should not prevent the petitioner from approaching the Court. Therefore, the Court directed that the impugned order should not be enforced until the next hearing date. The respondents were given the opportunity to seek modification or vacation of this interim order. The matter was listed for further proceedings after three weeks.

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