2024 (7) TMI 489 - HC - Customs

Commissioner wrongly denied aluminum waste exemption under N/N. 12/2012-CE despite precedent being set aside by court

Gujarat HC quashed Commissioner (Appeals) order denying exemption under N/N. 12/2012-CE for aluminum waste and scrap used in manufacturing aluminum ... Validity of the exemption under N/N. 12/2012-CE for aluminum waste and scrap used for manufacturing aluminum circles - Jurisdiction - whether the Commissioner (Appeals) could not have passed the impugned order as the order relied upon by the Commissioner (Appeals)? - HELD THAT:- On perusal of the impugned order passed by the Commissioner of Customs (Appeals) wherein reliance was placed on the order passed in case of M/S RY MIDAS METACAST PVT LTD & 1 VERSUS UNION OF INDIA & 3 [2015 (5) TMI 834 - GUJARAT HIGH COURT] which has now been quashed and set aside by this Court where it was held that 'If the Commissioner of Customs (Appeals), Ahmedabad has been satisfied that new facts have emerged then, he could not himself decide the matter. At the most, he could have remanded the matter for a fresh consideration. It was not open to the Commissioner of Customs (Appeals), Ahmedabad to decide the matter himself without examining anything further and without taking any material on record merely on the contention made by the other side.' The impugned order passed by the Commissioner (Appeals) cannot be sustained and therefore, the same is hereby quashed and set aside and it is held that the petitioners are entitled for exemption for additional customs duty for aluminum waste and scrap under Serial No. 220 of N/N. 12/2012-CE dated 17th March, 2012. Petition allowed. Issues Involved:1. Validity of the exemption under Notification No. 12/2012-CE for aluminum waste and scrap used for manufacturing aluminum circles.2. Jurisdiction and propriety of the Commissioner (Appeals) in reversing the adjudicating authority’s decision.3. Applicability of judicial precedents and principles of judicial discipline.4. Admissibility of the writ petition in the presence of an alternative statutory remedy.Issue-wise Detailed Analysis:1. Validity of the exemption under Notification No. 12/2012-CE:The petitioner firm used aluminum waste and scrap to produce unwrought aluminum plates and sheets, which were further processed into aluminum circles. The Central Government's Notification No. 12/2012-CE specified that aluminum waste and scrap used within the factory for manufacturing unwrought aluminum plates and sheets were exempt from excise duty. The petitioners argued that since their process involved producing unwrought aluminum plates and sheets, they were entitled to the exemption, even though the final product was aluminum circles. The respondent, however, contended that the exemption did not apply to aluminum circles, as the notification specifically mentioned unwrought aluminum plates and sheets.2. Jurisdiction and propriety of the Commissioner (Appeals):The Commissioner of Customs (Appeals) had previously allowed the exemption for a similar case involving M/s. Ry. Midas Metacast Pvt. Ltd., which had become final and binding. However, in the case of the petitioners, the Commissioner (Appeals) reversed the adjudicating authority’s decision, denying the exemption based on the emergence of new facts, specifically that the final product was aluminum circles. The petitioners argued that the Commissioner (Appeals) could not reverse the settled position without any new material facts, and the denial of exemption was without jurisdiction.3. Applicability of judicial precedents and principles of judicial discipline:The petitioners relied on the decision of the High Court in Special Civil Application No. 6089 of 2015, where the court had quashed a similar order by the Commissioner (Appeals) denying the exemption to M/s. Ry. Midas Metacast Pvt. Ltd. The court had held that there were no new facts justifying the reversal of the exemption and that the Commissioner (Appeals) had acted contrary to judicial propriety and discipline. The petitioners argued that their case was covered by this precedent, and the same benefit of exemption should be granted to them.4. Admissibility of the writ petition in the presence of an alternative statutory remedy:The respondents contended that the petitioners had an alternative efficacious remedy of appeal under Section 129A of the Customs Act, 1962, and therefore, the writ petitions should not be entertained. However, the court noted that the facts demonstrated a clear abuse of power by the Commissioner (Appeals) and that the order was contrary to judicial propriety and discipline. Therefore, the court held that the writ petition was maintainable despite the availability of an alternative remedy.Conclusion:The court quashed the impugned order of the Commissioner (Appeals) and held that the petitioners were entitled to the exemption for additional customs duty on aluminum waste and scrap under Serial No. 220 of Notification No. 12/2012-CE. The court emphasized that the Commissioner (Appeals) had acted without jurisdiction and contrary to settled judicial precedents, and therefore, the petitioners were entitled to the same benefit as granted in the case of M/s. Ry. Midas Metacast Pvt. Ltd. The petitions were allowed, and the rule was made absolute to the extent of granting the exemption.