1990 (8) TMI 173 - SC - Central Excise

Dismissal solely for alternative remedy improper; Section 35 appeal allowed to raise valuation and post-manufacturing expense issues

ITC LTD. Versus UNION OF INDIA

The SC held the High Court erred in dismissing the writ solely on the ground of an alternative remedy, noting its observations on Post Manufacturing ... Writ jurisdiction - belated appeal - Alternative remedy by way of an appeal under Section 35 of the Central Excise Act - petitioner submits that the petitioner will face certain difficulties in pursuing this remedy - remedy may not be any longer available to it because the appeal has to be filed within a period of three months from the date of the assessment order and delay can be condoned only to the extent of three more months by the Collector under Section 35 - HELD THAT:- There are certain aspects regarding Post Manufacturing Expenses (PME) as well as the question whether the addition should be made to the price or to the value which have arisen subsequently and on these aspects the petitioner has had no opportunity of putting forward its case at all. We think that the High Court, having decided to dismiss the writ petition on the ground of alternative remedy, could not have intended to conclude these points and so these observations were only tentative in nature not intended to preclude the petitioner from raising all points open to him in the appeal. The third difficulty pointed out by the petitioner is in regard to stay of the demand raised by the impugned order. We do not pass any order in this regard. It will be open to the petitioner to make a stay application or an application for waiver of deposit of the duty demanded as pre-condition for appeal before the Collector (Appeal). We direct that, if such an application is filed, the Collector should deal with it and dispose of it in accordance with law. Issues Involved: The judgment deals with (1) availability of alternative remedy u/s 35 of the Central Excise Act, (2) principles of natural justice in assessment order, and (3) stay of demand raised by the impugned order.Availability of Alternative Remedy u/s 35: The High Court dismissed the writ petition citing the availability of an appeal u/s 35 of the Act. The petitioner faced difficulties due to time constraints for filing the appeal and a previous view by the Collector (Appeal) that an appeal was not maintainable. The Supreme Court allowed the petitioner to file a belated appeal within one month with an application for condonation of delay, ensuring an effective alternative remedy by way of an appeal.Principles of Natural Justice in Assessment Order: The petitioner raised concerns about aspects like Post Manufacturing Expenses (PME) and the addition to price or value not being addressed in the assessment order. The Supreme Court clarified that all points that could have been raised in an appeal should now be open to the petitioner. The Collector (Appeal) was directed to consider all questions raised, independent of the High Court's observations on finality of assessment proceedings and compliance with natural justice.Stay of Demand: The petitioner highlighted difficulties regarding the stay of demand raised by the impugned order. The Supreme Court did not pass any order on this matter, leaving it open for the petitioner to make a stay application or an application for waiver of deposit of the duty demanded. The Collector was instructed to handle such applications in accordance with the law.The special leave petition was disposed of with the above directions, ensuring the petitioner's access to an alternative remedy, addressing concerns about natural justice in the assessment order, and leaving the decision on stay of demand to be dealt with as per the law.