TaxTMI 
TaxTMI 
1999 (6) TMI 39
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....king agent and Vitamin D to improve the quality of Dextrose without any chemical change or reaction. According to the petitioner, there is no manufacturing process within the meaning of S. 2(f) of the Central Excises and Salt Act, 1944 (hereinafter referred to as 'the Act'). The fourth respondent in the Original Petition the Assistant Collector of Central Excise, Trichur, was of the view that the process involved manufacture and thus subject to levy of excise duty. 3. Originally when the petitioner was compelled to pay excise duty, she approached this Court by filing O.P. No. 5820 of 1990. O.P. No. 5820/90 was disposed of by Chettur Sankaran Nair, J. by judgment dated 29th June, 1990. The learned Judge directed the fourth respondent to hear the petitioner and take a decision on the matter as to whether there was any manufacturing process. The judgment of the learned Judge is produced as Ext. P2, in the Original Petition. In tune with Ext. P2. the petitioner was issued a show cause notice by the fourth respondent. It is Ext. P3. The petitioner gave a reply to Ext. P3 by Ext. P4 dated 5-9-1990. Thereafter, the fourth respondent passed Ext. P5 order dated 5-11-1990. The fourth respon....
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....giving an application and after hearing both parties and after the Tribunal being satisfied that it was necessary. According to the petitioner, she had and even now having evidence to rebut the ground urged that to provide nutrition to the human body a minimum quantity of Calcium and Phosphorous and Vitamin D are required and if as a matter of fact, an opportunity had been given to the petitioner the petitioner would have been able to convince the Tribunal that the Calcium Phosphate and Vitamin D were not of the minimum dose required to provide nutrients. Hence the petitioner contends that the order of the Tribunal is in violation of R. 23 of the Rules as well as in violation of the principles of natural justice. In ground No. D the petitioner had taken the ground that the order passed is in violation of the principles of natural justice and in ground No. C, the petitioner had taken the contention that there is violation of R. 23 of the Appellale Tribunal Rules. 6. The Original Petition came up for admission on 25-10-1993. Thereafter it is seen that it was posted on 24-11-1993. On that date on behalf of the fourth respondent, an objection was filed. In the paragraph 2 of the objec....
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...., Sri Rama Kumar contended that (1) The Original Petition was not maintainable, since there was an effective alternative remedy under S. 35L of the Act. (2) There was no violation of R. 23 of the Appellate Tribunal Rules or violation of the principles of natural justice and (3) In any event, the learned single Judge nad exercised a discretion, which is based on sound legal principles and hence should not be interferred in appeal. Point No. 18. - Maintainability of the petition under Art. 226 of the Constitution of India : Shri Hidyatulla contended that the Original Petition contained averments to the effect that the Appellate Tribunal violated the rules of procedure and also violated the principles of natural justice. Learned Counsel contended that it is true that an appeal lies to the Supreme Court under S. 35L of the Act. But that does not mean that a petition under Art. 226 of the Constitution of India is not maintainable. Learned counsel cited authorities to show that the power under Art. 226 of the Constitution of India can be exercised in spite of an alternate remedy, if there is any violation of any fundamental right, violation of any Act or Rules or violation of the princi....
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....tain the petition and has also granted leave to the appellant to appeal to this Court......... we do not think that we will be justified at this stage in dismissing the appeal in limine". According to us, this is the general principle stated by the Supreme Court and a perusal of the case shows that the attack on the notice was on merits and not on the basis of any violation of any principles of natural justice or violation of any rule. AIR 1976 SC 127 was a case where the Supreme Court held that when there is an arbitration clause in agreement the question whether the Electricity Board has power to levy surcharge is covered by the arbitration clause and hence the petitioner could not pursue the remedy under Art. 226 of the Constitution of India. 1979 (4) E.L.T. (J 511) (S.C.) = AIR 1979 SC 1889 was a case where the Supreme Court was dealing with an appeal filed by the Assistant Collector of Central Excise against an order of the High Court releasing certain goods seized. In the course of the judgment, Krishna Iyer, J. observed thus : "It is correct to say that the High Court must have regard to the well established principles for the exercise of its writ jurisdiction and unless it....
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.... maintainable. In 1997 (92) E.L.T. 19 (S.C.) = AIR 1997 SC 1875 the question was whether certain substances like Zinc Oxide Adhesive Plaster, etc. are drugs or medicines. The Supreme Court held that it was a question of fact and the petitioner has to resort to the remedies under local Sales-tax Act and the Writ Petition as such was not maintainable. So far as W.A. No. 2265/98 is concerned, that is a case where the judgment was delivered by one of us - A.R. Lakshmanan, J. (as he then was) on behalf of the Bench. There the appellant's case was that the appellant could not file an appeal under S. 35L of the Central Excise Act to the Supreme Court, because the appellant was not able to arrange institution of such appeal, in view of its extremely precarious financial situation. The Division Bench held that precarious financial situation cannot at all be a ground for not filing an appeal. 10. Learned Counsel for the appellant relied on the following decisions : State of U.P. v. Mohammad Nooh, AIR 1958 SC 86, A.V. Venkateswaran, Collector of Customs, Bombay v. Ramchand Sobhraj Wadhwani & Anr., 1983 (13) E.L.T. 1327 (S.C.) = AIR 1961 SC 1506, M/s. Baburam Prakash Chandra Maheshwari v. Ant....
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....tal rights. Secondly, it has been established before us that there has been violation of principles of natural justice". In AIR 1969 SC 556, the Supreme Court considered whether the existence of alternate remedy is a bar to a Writ Petition, and it was held as follows : "There are at least two well-recognised exceptions to the doctrine with regard to the exhaustion of statutory remedies. In the first place, it is well settled that where proceedings are taken before a Tribunal under a provision of law, which is ultra vires it is open to a party aggrieved thereby to move the High Court under Art. 226 for issuing appropriate writ for quashing them on the ground that they are incompetent, without his being obliged to wait until those proceedings run their full course. In the second place, the doctrine has no application in a case where the impugned order has been made in violation of the principles of natural justice". In that case even though violation of fundamental right and principles of natural justice were alleged in the Writ Petition, the Writ Petition was dismissed in limine. In paragraph 4 of the judgment, the Supreme Court held as follows : "It is manifest in the present....
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.... that may be, once the petition has been admitted, normally the question of maintainability does not arise. Further in this case we find that even after the objection by the respondents, the Original Petition has been admitted without any reservations. Another thing we find is that the Original Petition has been lying in this Court for four years. To dismiss the Original Petition after the lapse of four years or after a long time, according to us, is not proper. This will ultimately put the party into difficulty because by the time when the Original Petition is disposed of, the altemate remedy would have been barred. Taking the same view there are two decisions of the Madras High Court; one is Prasad Film Laboratories v. CEGAT, 1993 (68) E.L.T. 747 and another is Madura Coats Ltd. v. Assistant Collector of Central Excise, 1990 (48) E.L.T. 321. In 1993 (68) E.L.T. 747, Misra, J. (as he then was) held as follows : "Availability of an alternate remedy cannot operate as a bar to such a constitutional remedy, though we exercise the refrain as a rule of prudence that a person should ordinarily first avail the internal remedy and invoke the writ jurisdiction as a last resort. In the inst....
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....g and blending of Dextrose Mono Hydrate with miniscule quantities of Tricalcium Phosphate and Vitamin D. The case of the appellant is that Tricalcium Phosphate is added as an anti caking agent and Vitamin D is to improve the quantity of Dextrose without any chemical change or reaction. Hence, according to the appellant, there is no manufacture within the meaning of S. 2(f) of the Act. Ext. P5 is the order passed by the fourth respondent. The finding of the fourth respondent in Ext. P5 order is as follows : In paragraph 2 of Ext. P5, it is stated that "it has been admitted that the entire activity carried out by M/s. Vijaya Packers in manufacturing Glucovita Glucose D amounts to 'processing', consists of cleaning, purifying and blending and packing from bulk into small packs, which is in agreement with the definition of the word "manufacture" given in S. 2(f) of the Central Excises & Salt Act". The order further refers to the report of the Chemical Examiner, which is as follows : "The sample is in the form of white powder. It is a preparation containing mainly Dexorose with a small amount of calcium phosphate." The fourth respondent then went on to consider the decisions of variou....
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....se but to aid absorption of Calcium Phosphate thereby providing nutrition. She cites relevant extracts from Normal and Therapautic Nutrition 17th Edition by Corinne H. Robinson and others on classification/distribution and characteristics of glucose, its functions, distribution and functions of Calcium and Phosphorous and Vitamin D to support her contention tliat the addition of Tricalcium and Vitamin D, albeit in miniscule proportions, is for the specific purpose of supplying vital body of nutrients...." According to the Counsel for the appellant, it is for the first time that the case was developed. First time, it was submitted that Tricalcium was added for the purpose of supplying vital body nutrients and vitamin D was added for providing nutrients. The Departmental Counsel relied on the extracts from 'Normal and Therapeutic Nutrition' 17th Edition by Corinne H. Robinson. Counsel for the appellant submitted that as a matter of fact, the appellant was not informed about the new development of the case and was also not informed about the extracts from the book referred to above. From Paragraph 7, in Ext. P7, we find the discussion of the case. It can be seen in paragraph 8 that r....
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....of manufacture was involved. 18. Before we discuss the above point, we shall refer to R. 23 of the Appellate Tribunal (Procedure) Rules, which reads thus : "23 . Productiion of additional evidence :- (1) The parties to the appeal shall not be entitled to produce any additional evidence, either oral or documentrary, before the Tribunal, but if the Tribunal is of opinion that any documents should be produced or any witnesses should be examined or any affidavit should be filed to enable it to pass orders or for any sufficient cause, or if adjudicating authority or the appellate or revisional authority has decided the case without giving sufficient opportunily to any party to adduce evidence on the points specified by them or not specified by them, the Tribunal may, for reasons to be recorded, allow such documents to be produced or witnesses to be examined or affidavits to be filed or such evidence to be adduced. (2) The production of any document or the examination of any witness or the adducing of any evidence under sub-rule (1) may be done either before the Tribunal or before such departmental authority as the Tribunal may direct. (3) Where any direction has been made by the Tri....
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....s in the controversy for correcting or contradicting anything prejudicial to their view" The author quotes the decision of Lord Denning in Kanda v. Government of Malaya (1962) AC 322 - wherein it was held as follows : "If the right to be heard is to be a real right which is worth anything, it must carry with it a right in the accused man to know the case which is made against him. He must know what evidence has been given and what statements have been made affecting him : and then he must be given a fair opportunity to correct or contradict them". Thus, it is an elementary principle of fair hearing, which is one of the basic features of natural justice. In this case, we find that such an opportunity was not given to the appellant by the Tribunal. In this context, it is pertinent to refer to the decision of the Supreme Court in Reckitt & Colman of India Ltd. v. Collector of Central Excise, 1996 (88) E.L.T. 641, where the Supreme Court held as follows : "It was beyond the competence of the Tribunal to make out in favour of the Revenue a case which the Revenue had never canvassed and which the appellants had never been required to meet". So also in Commissioner of Customs, Calcut....
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.... exercise of the discretionary jurisdiction vested in this Court under Art. 226 of the Constitution of India. It cannot be denied that the availability of an equally efficacious alternate remedy provided by the statute is a wrong circumstance which will dissuade this Court to exercise the discretionary jurisdiction under Art. 226 of the Constitution of India. If in a particular case, even if it is shown that there is patent illegality or irregularity in the proceedings or a fundamental error has taken place, the single Judge exercising the jurisdiction under Art. 226 of the Constitution of India, in his discretion, relegates the party to the alternate remedy provided by the statute, it cannot be stated that the single Judge was wrong in doing so. It may be that in such a case, the discretionary jurisdiction under Art. 226 of the Constitution could have been exercised. But the failure to so exercise the said jurisdiction cannot be said to be wrong, to merit interference by the appellate court. It is settled law that on the hearing of the appeal it is for the appellant to show that the decision appealed against is wrong. It will not be sufficient for the appellant to urge or plead th....