R.K. Bros. vs Cce, Chandigarh

In this Civil Misc. application, prayer made is for dismissing C.W.P. No. 4691 of 1991 as being not maintainable because the petitioner has not exhausted the alternative remedy of appeal under the Central Excise & Customs Act.

Upon notice, learned counsel appearing on behalf of the petitioner, has contended that notice under challenge being without jurisdiction, appeal is not an efficacious remedy.

Vide notice dated 28.2.1991, Collector, Central Excise called upon the petitioner to show cause as to why central excise duty amounting to Rs. 7,87,087.65 should not be demanded from it under Rule 9(2) of Central Excise Rules, 1944 read with Section 11A of the Central Excise and Salt Act, 1944 on the ground that the petitioner has manufactured excisable goods without having applied for central excise licence. Petitioner was also called upon to show cause as to why penal action be not taken against it under Rules 9(2), 173Q and 226 of the Central Excise Rules, 1944 for the contravention of aforesaid rules. Petitioner was asked to show cause as to why penalty under Rule 209A of ibid rules be not imposed upon it for purchasing, acquiring and keeping the excisable goods which the Collector has reason to believe, are liable to confiscation under Rule 173Q of the Rules. Petitioner was told to give reply within 30 days of the receipt of the notice.

According to the petitioner, no excise duty was chargeable as it had undertaken the work of fabrication and erection of steel structures for the Sugar Mills, Nakodar.

The question thus involved in the writ petition is as to whether petitioner manufactured steel structures or it is a case of fabrication. In my view, this being a disputed question of fact, the writ petition is not a proper remedy. Moreover, petitioner has come to this Court at a stage when only show cause notice has been issued to it. Petitioner, instead of approaching this Court by way of writ petition, ought to have given reply to the show cause notice and in case the same is decided against it, then it has a right to file an appeal before the Commissioner, Central Excise. In Titaghur Paper Mills Co. Ltd. and Another Vs. State of Orissa and Others, and State of Goa and others Vs. Leukoplast (India) Ltd. etc., , their Lordships of the Supreme Court have opined that when the Act provides for a complete machinery to challenge an order of assessment, the same can be challenged by the mode prescribed by the Act and not by a petition under Article 226 of the Constitution of India.

Accordingly, prayer made in the application is allowed and the writ petition is dismissed being premature. Since the period specified for giving reply to the show cause notice has expired, petitioner if so advised, may file reply within 45 days from today and on receipt of the reply, the Collector, Central Excise shall decide the matter on merits and speaking order in this regard shall be passed.