Whether appeal before High Court is maintainable when issue is related to determination of rate of duty?

PJ/CASE LAW/2016-17/3056

Case:- COMMISSIONER OF CENTRAL EXCISE Versus SHANTI PROCESSORS LTD.

Citation:- 2016 (331) E.L.T. 234 (Guj.)

Issue:- Whether appeal before High Court is maintainable when issue is related to determination of rate of duty?

Brief facts: - Heard Mr R.J. Oza, learned Senior Standing Counsel for the appellant in each of the appeals and Mr. Dhaval Shah, learned advocate for the respondent in Tax Appeal No. 332 of 2015 and Mr. Paresh Dave, learned advocate for the respondent in Tax Appeals No. 331, 333 and 341 of 2015.
These appeals are filed under Section 35G of the Central Excise Act, 1944. The appellant-revenue has challenged the order dated 28th October, 2014 passed by the Customs, Excise and Service Tax Appellate Tribunal [2014 (310)E.L.T.515 (Tribunal-LB)] by proposing the following questions, stated to be substantial questions of law :
“(A) Whether in the facts and on the circumstances of the case, the Larger Bench of the Customs, Excise and Service Tax Appellate Tribunal has committed substantial error of law in interpreting Notification No. 14/20002-C.E., dated 1-3-2002 and consequently holding that exemption under Sr. No. 12 in terms of the said notification would be admissible to the assessee, read with condition-3 and Explanation-II to the said notification, even if actual duty payment condition is not fulfilled by the assessee?
(B) Whether the conditions attached to Notification No. 14/2002-C.E., dated 1-3-2002 provide that the benefit under the said notification can be available in relation to the products, which are subjected to actual payment of duty and not otherwise?
(C) Whether in the facts and circumstances of the case, what is the scope of Explanation-II to Notification No. 14/20002-C.E., dated 1-3-2002 and whether the legal fiction created thereunder includes textile yarns and fabrics subjected to Nil rate of duty or those which are not subjected to the payment of duty?
(D) Whether in the facts and circumstances of the case, the Tribunal has committed substantial error of law in holding that decision taken in the case of CCE, Ludhiana v. Prem Industries, Simplex Mills Co. Limited v. CCE and Morarjee Gokuldas Spinning and Weaving Co. Ltd. v. CCE were correct interpretation of exemption Notification No. 14/20002-C.E., dated 1-3-2002, without recording findings on the distinguishing points of contentions raised by the Departmental Representative at the hearing by the Larger Bench of the Tribunal?”

Respondent’s contention:-Mr. Paresh Dave and Mr. Dhaval Shah, learned advocates for the respondents at the outset submitted that the controversy involved in the present case relates to the determination of a question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment, under the circumstances, in view of the provisions of Section 35G read with Section 35L of the Central Excise Act, 1944, the appeal would lie before the Supreme Court and not before this court. In support of such submission, the learned counsel placed reliance upon the decision of this Court in the case of Commissioner of Central Excise v. JBF Industries Limited - 2011 (264) E.L.T. 162 (Guj), wherein this court has held that the question as regards the applicability of a notification or a circular, which has a direct bearing on the rate of duty is a question which has a direct and proximate relationship to the rate of duty and value of the goods for the purposes of assessment. It was submitted that the above decision would be squarely applicable to the facts of the present case, under the circumstances, these appeals are not maintainable before this Court.

Appellant’s contention:- Mr R.J. Oza, learned senior standing counsel for the appellant is not able to dispute the above position of law.

Reasoning of judgment:-A perusal of the impugned order of the Tribunal clearly shows that the dispute involved in the present case relates to the applicability of Notification No. 14/2002-C.E., dated 1-3-2002 which has a direct bearing on the determination of the rate of duty for the purposes of assessment. Under the circumstances, in the light of the provisions of Section 35G read with Section 35L of the Central Excise Act, 1944 these appeals are not maintainable before this Court.
In the aforesaid premises, the appeals are disposed of as being not maintainable before this Court leaving it open for the appellant to file the same before the appropriate forum. The Registry shall return the appeal papers to the learned counsel for the appellant after maintaining a copy thereof for the record.

Decision:-Appeals dismissed.

Comment:- The analogy of the case is that Issue involved is being related to grant of exemption under Notification No. 14/2002-C.E., having direct bearing on determination of rate of duty for assessment. Appeal before High Court is not maintainable. Appellant is at liberty to file appeal before appropriate forum.
Prepared by:- Monika Tak

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PJ/CASE LAW/2016-17/3056

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