2002 (2) TMI 112 - HC - Central Excise

Court dismisses writ petitions, directs appeal under Section 35L for statutory remedy

The Court held that writ petitions under Articles 226 and 227 were not maintainable due to the existence of a statutory remedy under Section 35L of the ... Writ jurisdiction under Articles 226 and 227 of the Constitution - alternative statutory remedy - appeal under Section 35L of the Central Excises and Salt Act, 1944 - classification of goods and exemption notification as directly relating to rate of duty - adequacy of alternative remedy - exercise of discretionary writ jurisdiction where statutory remedy existsAppeal under Section 35L of the Central Excises and Salt Act, 1944 - classification of goods and exemption notification as directly relating to rate of duty - alternative statutory remedy - exercise of discretionary writ jurisdiction where statutory remedy exists - Maintainability of writ petitions under Articles 226/227 when an appeal under Section 35L is available and the dispute concerns classification/exemption affecting rate of duty. - HELD THAT: - The Court held that the disputes raised by the Revenue (classification of the product and entitlement to exemption) directly and proximately relate to the rate of duty for assessment and therefore fall within the scope of the statutory appeal under Section 35L. Applying the precedent that classification and coverage by an exemption notification affect the rate of duty, the Court concluded that the alternative remedy of appeal to the Supreme Court under Section 35L is available and is an adequate remedy. In view of the availability of that alternate statutory remedy, and following the Division Bench view in Colour Chem Ltd., the High Court exercised its discretion to refuse to entertain the writ petitions and declined to adjudicate the merits. The Court noted that factual findings and conclusions recorded by CEGAT should be tested by the appellate forum and expressly refrained from expressing any opinion on merits, leaving all rival contentions open for the appellate process. [Paras 23, 24, 25, 26]Writ petitions dismissed on maintainability grounds; petitioners directed to pursue appeal under Section 35L, with merits left open.Final Conclusion: The High Court sustained the preliminary objection and dismissed the writ petitions because the controversies (classification and entitlement to exemption affecting rate of duty) fall within the appeal remedy under Section 35L of the Central Excises and Salt Act, 1944; petitioners are at liberty to pursue the statutory appeal to the Supreme Court and the Court refrained from expressing any view on the merits. Issues Involved:1. Maintainability of the writ petitions under Articles 226 and 227 of the Constitution of India.2. Jurisdiction of the CEGAT to deal with questions not raised in the appeal filed by the assessee.3. Availability and adequacy of statutory remedy u/s 35L of the Central Excises and Salt Act, 1944.Summary:Issue 1: Maintainability of the writ petitions under Articles 226 and 227 of the Constitution of IndiaThe respondent/assessee raised a preliminary objection to the maintainability of the writ petitions under Articles 226 and 227 of the Constitution of India, arguing that an appeal to the Supreme Court is provided u/s 35L of the Central Excises and Salt Act, 1944. The Court held that the existence of a statutory remedy under Section 35L is a bar for entertaining writ petitions under Articles 226 and 227, as the issues involved pertain to the rate of duty and valuation, which are within the appellate jurisdiction of the Supreme Court. The Court referenced multiple judgments, including Colour Chem Ltd. v. Union of India and Navin Chemicals Mfg. and Trading Co. Ltd. v. Collector of Customs, to support this position.Issue 2: Jurisdiction of the CEGAT to deal with questions not raised in the appeal filed by the assesseeThe petitioners contended that CEGAT acted without jurisdiction by addressing questions not raised in the appeal. The Court did not find merit in this argument, stating that the CEGAT had recorded reasons in support of its conclusions and that factual aspects highlighted in the order could only be appropriately reviewed by the appellate authority under Section 35L.Issue 3: Availability and adequacy of statutory remedy u/s 35L of the Central Excises and Salt Act, 1944The Court emphasized that the statutory remedy u/s 35L of the Act is available and adequate for the petitioners to address their grievances. It held that the question of whether the respondent-assessee is covered by the exemption notification relates directly to the rate of duty, which falls within the scope of Section 35L. The Court referenced the Supreme Court's decision in Navin Chemicals Mfg. and Trading Co. Ltd. v. Collector of Customs to underline that disputes about classification and exemption notifications relate directly to the rate of duty.Conclusion:The Court dismissed both writ petitions, sustaining the preliminary objection raised by the respondent/assessee. It directed the petitioners to avail the statutory remedy of appeal to the Supreme Court u/s 35L of the Act, without expressing any opinion on the merits of the case. The rule was discharged with no order as to costs.