Second incidence of excise duty on duty-paid imported filaments cannot stand where exemption notifications apply.

Where sewing threads manufactured from duty-paid imported filaments or fibres were already covered by the exemption notifications and additional customs duty had been paid, a further excise demand as a second incidence of duty could not be sustained; the notices and consequential orders were set aside. The Court also held that the writ court was justified in entertaining the challenge despite an alternative appellate remedy, because the relevant legal position had been settled by the Supreme Court and prolonged pendency would make relegation to appeal futile.

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Issues: (i) Whether the writ court should have declined interference and relegated the assessee to the alternative appellate remedy despite the long pendency of the matters and the admitted position on the relevant notifications and Supreme Court decisions; (ii) Whether the impugned show cause notices and consequential orders demanding a second incidence of excise duty on sewing threads manufactured from duty-paid imported filaments or fibres could be sustained.

Issue (i): Whether the writ court should have declined interference and relegated the assessee to the alternative appellate remedy despite the long pendency of the matters and the admitted position on the relevant notifications and Supreme Court decisions.

Analysis: The matters had remained pending for several years, and the Revenue accepted that the goods fell within the relevant notification entries and that additional customs duty had already been paid. The Court also noted that the legal position on countervailing duty and the scope of interference in writ jurisdiction had been settled by the Supreme Court. In those circumstances, sending the assessee to the appellate tribunal after such prolonged litigation would serve no useful purpose.

Conclusion: The alternative-remedy objection was rejected, and interference in writ jurisdiction was held to be justified in favour of the assessee.

Issue (ii): Whether the impugned show cause notices and consequential orders demanding a second incidence of excise duty on sewing threads manufactured from duty-paid imported filaments or fibres could be sustained.

Analysis: The Court treated the amended notifications as clarificatory and relied on the settled principle that countervailing duty is meant to offset excise duty on like goods. Once the relevant goods were covered by the exemption notifications and the additional customs duty had already been paid, the demand for a second levy could not stand. The Court also accepted that the Revenue's interpretation was inconsistent with the legal position declared by the Supreme Court.

Conclusion: The impugned notices and orders demanding the second incidence of duty were unsustainable and were set aside in favour of the assessee.

Final Conclusion: The common order of the learned Single Judge and the consequential departmental actions were quashed, and the writ appeals and writ petitions succeeded with no order as to costs.

Ratio Decidendi: Where the relevant goods are already covered by the exemption scheme and the additional customs duty has been paid, a further demand of excise duty as a second incidence cannot be sustained, and a writ court may interfere notwithstanding an alternate remedy when the issue is settled and prolonged adjudication would be futile.

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