Gujarat High Court
Vvf India Ltd & vs Union Of India & 2 on 18 September, 2014
Bench: Harsha Devani, Sonia Gokani
C/SCA/4418/2014 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION No. 4418 of 2014
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VVF INDIA LTD & 1....Petitioner(s)
Versus
UNION OF INDIA & 2....Respondent(s)
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Appearance:
Mr KAMAL TRIVEDI & Mr. MIHIR JOSHI, Sr Advocates with Mr. BIPIN JAIN & Mr KUNAN
NANAVATI, Advocates for NANAVATI ASSOCIATES for the Petitioners
Mr DEVANG VYAS, ADVOCATE for the Respondent(s) No. 1
Mr HRIDAY BUCH, ADVOCATE for the Respondent(s) No. 2
Mr RJ OZA, ADVOCATE for the Respondent(s) No. 3
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CORAM: HONOURABLE Ms. JUSTICE HARSHA DEVANI
and
HONOURABLE Ms. JUSTICE SONIA GOKANI
18th September 2014
ORAL ORDER (PER : HONOURABLE Ms. JUSTICE HARSHA DEVANI)
1. This petition is directed against a show cause notice dated 27 th June 2013 issued by the second respondentAdditional Director General, Directorate of Revenue Intelligence calling upon the petitioners to show cause as to why their claim for concessional rate of duty in terms of Serial No. 57 of the Customs Notification No. 12/2012 dated 17 th March 2012 [Serial No. 33A of the erstwhile Customs Notification No. 21/2002 dated 1st March 2002] on the import of impugned goods, covered under Bills of Entry as detailed in AnnexureC and AnnexureD thereto should not be rejected and why the same should not be assessed on the tariff rate of the Customs duty corresponding to the respective CTH 15132110; the exemption of Additional duty of Customs leviable under subsection (5) of section 3 of the said Customs Tariff Act (SAD), claimed vide Notification Nos. 20/2006Cus dated 01.03.2006 and Page 1 of 18 C/SCA/4418/2014 ORDER 21/2012Cus dated 17.03.2012 in respect of import of the impugned goods covered under the above Bills of Entry should not be disallowed, etc.
2. Mr. K.B Trivedi, Senior Advocate, learned counsel for the petitioners invited the attention of the court to the dispute in question to point out that the entire basis for issuance of the show cause notice is the Circular No. 40/2001Cus. dated 13th July 2001. Reference was made to a decision of this court in case of Intercontinental (India) v. Union of India, 2003 (154) ELT 37, to point out that the Circular No. 40/2001Cus. has been quashed by this court by holding that the same is contrary to the Notification No. 17 /2001Cus. dated 1 st March 2001. It was submitted that when the above circular has been set aside by this court, it is not permissible for the respondents to place reliance upon the contents of the said circular for the purpose of issuance of the present show cause notice. Reference was made to the exemption Notification No. 21/2002Cus. dated 1st March, 2002 to point out that by virtue of the said notification, exemption had been granted to the goods of the description mentioned therein, which included the goods imported by the petitioner, being Palm Kernel Oil [Edible Grade] which falls under item 33A, Chapter Heading No. 1513 in respect of "all the goods, crude and edible grade". It was pointed out that similarly under Notification No.12 of 2012Cus., dated 17th March 2012, such goods are granted exemption under entry at serial no. 57. The attention of the court was invited to the reports of the concerned laboratories which clearly state that the test performed on the sample of Crude Palm Kernel Oil [Edible Grade] conforms to the standard and provisions laid down under Regulation No. 2.2.1 (21) of the Food Safety and Standards (Food Products & Food Additives) Regulations, 2011 for Palm Kernel Oil. It was submitted that the goods imported by the petitioners are Crude Page 2 of 18 C/SCA/4418/2014 ORDER Palm Kernel Oil [Edible Grade] which clearly fall within the said entry, and therefore, are entitled to exemption under the said notification. However, the respondents by placing reliance upon the above circular, which has been set aside by this court, seek to add something to the said notification by bringing in the requirement of using the goods imported by the petitioners for refining the same into edible oil. It was submitted that the exemption notification does not provide for any such requirement and as such it is not permissible to read something which is not provided therein, that too, with reference to a circular which already stands quashed by this court. The learned counsel has advanced various other submissions on the merits of the case; however, at this stage it is not necessary to refer to the same in detail. Suffice it to state that the learned counsel has pointed out that the impugned notice issued by the second respondent is with a view to usurp jurisdiction without any legal foundation.
3. Since the petition is directed against a show cause notice, Mr. H.C Buch, learned counsel appearing for the second respondent, at the outset raised a preliminary objection to the very maintainability of the petition by submitting that the issue involved in the present case is as to whether the petitionerassessee could have claimed the benefit of exemption Notifications No. 12/2012 Cus dated 17.3.2012 and No.21/2002Cus dated 1.3.2002 in respect of Crude Palm Kernel Oil. Such issue can be decided by the concerned statutory authority after the assessee responds to the said show cause notice. Against any order passed by the adjudicating authority, there is an alternate statutory process provided under the relevant provisions of the Customs Act which provide for two stages of appeal, firstly by way of an appeal against the order of the adjudicating authority before the Tribunal and thereafter, by way of further appeal before the Supreme Court. Thus, there being an Page 3 of 18 C/SCA/4418/2014 ORDER efficacious statutory remedy available under the provisions of the Customs Act, the petition deserves to be dismissed on this ground alone. It was submitted that this court should not entertain the petition also for the reason that section 130 of the Customs Act provides for appeal to the High Court against every order passed in appeal by the Appellate Tribunal, provided such order is not an order relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for the purposes of assessment, whereas in case where the matter relates to any question relating to the rate of duty or value of goods, an appeal would like to the Supreme Court under section 130E of the Act. In the present case, the controversy brought before this court relates to the applicability or otherwise of an exemption notification, which has a direct bearing on the rate of duty and hence, in case the proceedings pursuant to the impugned show cause notice were to culminate into an order of the Tribunal, the appeal would lie before the Supreme Court and not before this court. Thus, when this court does not have the powers to decide the controversy in exercise of its appellate powers under the relevant statute, it ought not to exercise powers under Article 226 of the Constitution of India. In support of such submission, the learned counsel placed reliance upon a decision of the Supreme Court in case of Union of India v. Guwahati Carbon Limited, 2012 (278) ELT 26 (SC), wherein the court took note of the fact that the only determination made by the Tribunal was with regard to the assessable value of the commodity in question by excluding the freight/transportation charges and the insurance charges from the assessable value of the commodity in question. Since what was done by the Tribunal was the determination of the assessable value of the commodity in question for the purpose of levy of duty under the Act, the assessee ought to have carried the matter by way of an appeal before the Supreme Court under section 35L of the Page 4 of 18 C/SCA/4418/2014 ORDER Central Excise Act, 1944 and hence it was not appropriate for the writ court to entertain a petition under Article 226 of the Constitution. The decision of the Supreme Court in Commissioner of Incometax v. Vijaybhai Chandrani, AIR 2013 SC 3518, was cited wherein the court had observed that at the stage of show cause notices under section 153C of the Income Tax Act, 1961, the assessee could have addressed his grievances and explained his stand before the Assessing Authority by filing appropriate reply to the said notices instead of filing the writ petition impugning the said notices. It is settled law that when an alternative remedy is available to the aggrieved party, it must exhaust the same before approaching the Writ Court. Reliance was also placed upon an unreported decision of this Court in case of Inox Air Products Limited v. Union of India & Others, rendered on 20th November 2013 in Special Civil Application No. 16725 of 2013 wherein the court, after placing reliance upon various decisions of the Supreme Court, had dismissed the petition against a show cause notice and had relegated the petitioner therein to the adjudicating authority.
3.1 Reliance was also placed upon a decision of the Supreme Court in case of Special Director v. Mohd. Ghulam Ghouse, 2004 (164) ELT 141 (SC), wherein, the court had observed that in a large number of case it has deprecated the practice of the High Courts entertaining writ petitions questioning legality of the show cause notices stalling enquiries as proposed and retarding investigative process to find actual facts with the participation and in the presence of the parties. The court was of the view that unless, the High Court is satisfied that the show cause notice is totally non est in the eye of law for absolute want of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the mere asking and as a matter of routine and the writ petitioner should invariably be directed to respond to the show cause Page 5 of 18 C/SCA/4418/2014 ORDER notice and take all stands highlighted in the writ petition. Whether the show cause notice was founded on any legal premises is a jurisdictional issue which can even be urged by the recipient of the notice and such issues also can be adjudicated by the authority issuing the very notice initially, before the aggrieved could approach the court. Mr. Buch submitted that in the facts of the present case, it cannot be said that the authority which had issued the show cause notice lacks jurisdiction to issue such notice or to investigate into the facts. Under the circumstances, the present writ petition does not deserve to be entertained and the court may relegate the petitioners to respond to show cause and to participate in the proceedings before adjudicating authority. It was submitted that the petitioners also imported the very goods at Mumbai and seizure orders were passed in respect of such goods. Against the seizure by the DRI, a writ petition came to be filed; wherein the High Court by an order dated 23.01.2013 has ordered release of the goods provisionally. Reference was made to the order dated 11.02.2013 made by this court Special Civil Application No. 535 of 2013 wherein the petitioners had inter alia prayed for a declaration that the seizure made on 04.01.2013 is illegal, to submit that insofar as the accuracy of the declaration made by the petitioners that the imported goods were Crude Palm Kernel Oil Edible Grade is concerned, the court had observed that the same would be subject to show cause notice proceedings that the department may issue and the final adjudication thereon after considering the material on record produced by both sides. These observations of the court have attained finality in the absence of any challenge to the same and for this reason also the petition does not deserve to be entertained.
3.2 On the merits of the case, the learned counsel submitted that the seizure order had been made on 4 th January, 2013 on the ground that Page 6 of 18 C/SCA/4418/2014 ORDER there was a misdeclaration of the goods and wrong availment of the exemption notification in respect of the stock at Kandla. It was submitted that the argument advanced on behalf of the petitioners that the show cause notice is entirely based upon Circular No. 40/2001Cus., dated 13th July 2001 is incorrect inasmuch as the show cause notice merely refers to the said circular, however, it is not based upon the same. It was submitted that the exemption notification in question provides for exemption of all goods of the description "crude and edible grade' in the Chapter or Heading or Subheading or tariff item specified against the same. The word, "edible grade" is not defined anywhere and but is explained in under the first supplementary note in Chapter 15 of the Tariff Act which provides that "edible grade" in respect of goods (i.e., edible oil) specified in Appendix B to the Prevention of Food Adulteration Rules, 1955, means the standard of quality specified for such goods in that Appendix. It was submitted that requirement that the oil described in the exemption notification should be used for edible purpose is engrained in the description itself, as the duty exemption at different rates is available on the imported oil under the same CTH, based on the usage of the oil as categorized under duty exemption Notification No. 12/2012Cus dated 17th March 2012 [Serial No. 33A to the erstwhile Notification No. 21/2002Cus dated 1 st March 2002]. It was pointed out that the tariff rate on import of Crude Palm Kernel Oil is 100% of the value, as specified in respect thereof. However, the Central Government in public interest has exempted the crude and edible oil (edible grade) of Crude Palm Kernel Oil from customs duty by virtue of the notification issued under section 25 of the Customs Act, 1962 so as to keep the price of edible oil lower to provide relief to the poor sections of society. Reference was made to Notification No.21/2002 to point out that the same provides for exemption at different rates and subject to the conditions specified therein in respect of edible oils falling under the Page 7 of 18 C/SCA/4418/2014 ORDER headings and subheadings specified thereunder as well as for goods imported for manufacture of soap, industrial fatty acids and fatty alcohol, etc. On a reading of Notification No.21/2002Cus. and Notification No.12/2012Cus. it is apparent that the Central Government has allowed concessional rate of duty to crude oil under CTH 1513 when imported for manufacture of soaps, industrial fatty acids and fatty alcohol as well as when imported in edible grade. Thus, based on the usage, different rates have been prescribed under the duty exemption notification. Therefore, there was no need for separate condition regarding usage or end use in respect of serial no. 57 of the notification. It was, accordingly, submitted that the crude oil falling under CTH 1513 imported for edible purpose attracts "Nil" rate of duty, while the crude oil falling under CTH 1513 imported for the purpose of manufacturing of soaps, industrial fatty acids and fatty alcohol attracts higher rate of duty. The petitioner, therefore, has misdeclared the description of crude oil imported by it with a mala fide intention to cover its imported Crude Palm Kernel Oil in the category of concessional rate of duty in terms of serial no. 57 of the Customs Notification No. 12/2012 dated 17 th March 2012 [serial no. 33A of the erstwhile Customs Notification No. 21/2002]. It was further submitted that in the present case, the petitioners have imported the goods for the purpose of manufacturing soaps, industrial fatty acids and fatty alcohol, though such goods have been imported as edible grade. It was submitted that the purpose of the exemption notification being to provide for exemption so as to make available edible oil at lowers rates, the petitioner is entitled to the benefit of exemption under the notification in question only so long as the oil imported is used for edible purpose, even after refining.
3.3 It was submitted that thus, this is an arguable case and that the department has not usurped jurisdiction without any legal foundation.
Page 8 of 18 C/SCA/4418/2014 ORDERThat the benefit under the exemption notification is available to the petitioners provided they import crude oil of edible grade and that the department is not unjustified in holding that it had to be used for human consumption. It was submitted that over and above the reference to the circular, even otherwise, the show cause notice is wholly justified on the basis of other facts.
4. In rejoinder, Mr. Trivedi learned counsel for the petitioners, on the question of maintainability of the petition, placed reliance upon the decision of the Supreme Court in case of Calcutta Discount Company Limited v. Incometax Officer, Companies DistrictI, Calcutta & Another, AIR 1961 SC 372, for the proposition that though a writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Court will issue appropriate orders or directions to prevent such consequences. It was submitted that in the facts of the present case, if the court does not intervene, the petitioners will be subjected to lengthy proceedings and unnecessary harassment, when there is no legal basis for issuance of the impugned notice.
4.1 Reference was made to the decision of the Supreme Court in case of Commissioner of Income Tax, Gujarat v. Vijaybhai N. Chandrani, (2013) 35 Taxmann.com 580 (SC), on which reliance had been placed by this court in the case of Inox Air Products Limited v. Union of India (supra), to point out that in the said decision, the Supreme Court has held that the High Court ought not to have entertained the writ petition and instead should have directed the assessee to file reply to the said Page 9 of 18 C/SCA/4418/2014 ORDER notices in view of the facts, which may be involved in the said case. The court had observed in the said case that, it transpired from the record that the jurisdictional Assessing Officer, upon having a reason to believe that the documents seized indicate escapement of income, had issued a show cause notice under section 153C of the Act to the assessee for re assessment of his income. It was submitted that the said decision was rendered in the facts of the said case and would not be applicable in the present case.
4.2 Reference was also made to the decision of the Supreme Court in the case of M/s. Filerco & Another v. Commissioner of Sales Tax, Madhya Pradesh & Another, (1986) 2 SCC 103, wherein the court has held that the High Court should have examined the merits of the case instead of dismissing the writ petition in limine in the manner it had done.
4.3 Reliance was also placed upon a decision of the Supreme Court in case of Whirlpool Corporation v. Registrar of Trade Marks, Mumbai & Others, AIR 1999 SC 22, wherein the court has held thus:
"20. Much water has since flown beneath the bridge, but there has been no corrosive effect on those decisions which, though old, continue to hold the field with the result that the law as to the jurisdiction of the High Court in entertaining a writ petition under Article 226 of the Constitution, in spite of the alternative statutory remedies, is not affected, specially in a case where the authority against whom the writ is filed is shown to have had no jurisdiction or had purported to usurp jurisdiction without any legal foundation.
It was submitted that in the present case, the show cause notice has no Page 10 of 18 C/SCA/4418/2014 ORDER legal foundation and as such, the second respondent has purported to usurp jurisdiction by issuing the show cause notice without any legal foundation. Under the circumstances, the above decision would be squarely applicable to the facts of the present case.
4.4 Reliance was also placed on the decision of the Supreme Court in case of Shankara Cooperative Housing Society Limited v. M. Prabhakar & Others, (2011) 5 SCC 607, for the proposition that the High Court in its writ jurisdiction will not enquire into complicated questions of fact. The High Court also does not sit in appeal over the decision of an authority whose orders are challenged in the proceedings. The High Court can only see whether the authority concerned has acted with or without jurisdiction. The High Court can also act when there is an error of law apparent on the face of the record.
4.5 Referring to the decision of the Supreme Court in case of Union of India v. Guwahati Carbon Limited [supra] , it was pointed out that the said decision does not lay down any proposition of law that the High Court cannot interfere in exercise of powers under Article 226 of the Constitution and on the contrary, lays down that such powers can be exercised in those cases where the statutory authority, inter alia, has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice. It was submitted that in the present case, the second respondent has taken recourse to a circular which has already been set aside by this court, which decision of this court has been confirmed by the Supreme Court, and hence, the present case would squarely fall within the categories laid down in the above decision.Page 11 of 18 C/SCA/4418/2014 ORDER
4.6 Reliance was also placed upon a decision of this court in case of Core Healthcare Limited v. Union of India, 2006 (198) ELT 21 (Guj), for the proposition that once the respondent authority fails to establish jurisdictional facts for assumption of jurisdiction, as a natural corollary, the impugned show cause notice could not be allowed to stand and the same was required to be quashed and setaside. It was submitted that in the facts of the present case, the second respondent has failed to establish the jurisdictional facts for assumption of jurisdiction, and hence, the impugned show cause notice requires to be interfered with and this court, therefore, has jurisdiction to entertain the petition.
4.7 Reliance was also placed upon the decisions of the Supreme Court in the case of Bellary Steels & Alloys Limited v. Deputy Commissioner, Commercial Taxes (Assessment) & Others, (2009) 17 SCC 547 and in the case of Indo Asahi Glass Company Limited & Another v. Income Tax Officer & Others, (2002) 10 SCC 444 as well as the decision of this court in the case of Lupin Limited (Formerly Lupin Lab. Ltd) & Another v. Union of India & Another, 2012 (3) GLH 519, and more particularly paragraph 39 thereof wherein the court after considering the decision of the Supreme Court in case of Union of India v. Guwahati Carbon Limited (supra) had entertained the petition.
5. Mr. Buch learned counsel for the respondent submitted that the decisions on which reliance is placed upon by the learned counsel for the petitioners would not be applicable to the facts of the present case.
6. Having regard to the fact that the very maintainability of the petition has been called in question on behalf of the respondents, at the outset it would be necessary to deal with the said issue. For this purpose Page 12 of 18 C/SCA/4418/2014 ORDER it would be necessary to peruse the show cause notice issued by the respondents, which prima facie reveals that the same is based upon the Circular No. 40/2001Cus., dated 13th July 2001, inasmuch as, the record of the case indicates that it is only the said circular which provides for giving the benefit of concessional rate of duty on edible oil so long as the oil is imported for edible purpose. The learned counsel for the respondent is not in a position to point out any other provision in law or any notification of the Central Government, which provides that the benefit of the exemption notification in question would be based upon the end use of the goods imported.
7. A perusal of the Chapter 15 of the Tariff Act reveals that the Palm Kernel Oil falls under Tariff Item No. 1513 21 10. The first supplementary note to Chapter 15 of the Tariff Act, reads thus: "In this Chapter, "edible grade", in respect of a goods (ie., edible oil) specified in Appendix B to the Prevention of Food Adulteration Rules, 1955, means the standard of quality specified for such goods in that Appendix". Thus, for qualifying for the purpose of being considered to be of edible grade, the goods specified in Appendix B of the Prevention of Food Adulteration Rules, have to meet with the standard of quality specified for such goods in the Appendix. Palm Kernel Oil finds place at A.17.21 of Appendix B to the said rules. The Prevention of Food Adulteration Act, 1954 has been repealed by the Food Safety and Standards Act, 2006. The Prevention of Food Adulteration Rules, 1955 stand substituted by the Food Safety and Standards Rules & Regulations, 2011. The standards prescribed in respect of Palm kernel oil are under Regulation No.2.2.1 (21) of the Food Safety and Standards (Food Products and Food Additives) Regulations, 2011. A perusal of the analysis reports of the goods in question, clearly show that the same meet with the requirements laid down under Regulation No.2.2.1 (21) for Palm Kernel Oil. Thus, the Page 13 of 18 C/SCA/4418/2014 ORDER record of the case clearly demonstrates that the goods imported by the petitioner are of edible grade in terms of the above supplementary note inasmuch as the Food & Drugs Laboratory has clearly opined that the goods imported by the petitioner from time to time conform to the standards and provisions laid down under the Regulation No. 2.2.1 (21) of the Food Safety and Standards (Food Products and Food Additives) Regulations, 2011 for Palm Kernel Oil and can be used only after refining and conforming to the standards as laid down under Regulation No. 2.2.1 (16).
8. It may be noted that Regulation 2.2.1 (16) defines refined vegetable oil and further provides that refined vegetable oils shall be obtained from the vegetable oils enumerated thereunder. Palm Kernel Oil finds mention at item (xix) thereunder. It is not the case of the petitioner that it is importing goods answering the description of 2.2.1 (16) but that it imports Palm Kernel Oil (Edible Grade) which falls within the ambit of Regulation 2.2.1 (21). It may be noticed that there is no dispute with regard to the description, classification and use of the goods which are imported by the petitioner. The dispute raised by respondents is that the goods, after being imported are not used for the purpose of converting the same into edible oil, and therefore, in view of the end use made by the petitioners of the imported goods, they are not entitled to the benefit of the exemption notification.
9. The record shows that the petitioner has been availing of the benefit of the exemption notification over a period of time right from the year 2010, whereas the show cause notice has been issued for the first time in the year 2013. On a bare reading of exemption notification No.12/2012cus. dated 17.3.2012, prima facie, there is nothing to show that for the purpose of availing the benefit thereunder, the end use of Page 14 of 18 C/SCA/4418/2014 ORDER the all goods of the description "crude and edible grade" falling under the Chapter or Heading or Subheading or tariff as provided against serial no.57 of the said notification should be for edible purpose. It is not the case of the respondents that the goods do not fall within the ambit of serial no. 57 of the said notification, but that since the end use is not for edible purpose, the same would not fall within the ambit of the said serial number and the petitioners would not be entitled to the benefit of exemption notification.
10. In the opinion of this court, prima facie, on the plain reading of Notification No.12/2012cus., the contention of the respondents does not appear to have any legal basis inasmuch as the exemption notification is clear and takes within its ambit of all goods, whether crude or of edible grade. There is nothing in the exemption notification which would warrant an assumption that for the purpose of falling within the ambit of serial no.57 of the exemption notification the end use of the goods falling within the description "crude and edible grade"
has to be for edible purposes. It is by now well settled by a catena of decisions of the Supreme Court that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the taxpayer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. The exemption notification as is well known should be construed liberally once it is found that the assessee fulfils all the eligibility criteria. In reading an exemption notification, no condition should be read into it when there is none. If an assessee is entitled to the benefit thereof, the same should not be denied. Therefore, the contention of the respondents that the intent behind the exemption notification to provide for lower rates of oil in public interest has to be Page 15 of 18 C/SCA/4418/2014 ORDER kept in mind while construing the said notification does not merit acceptance. On a plain reading of Notification No.12/2012 it is clear that serial no. 57 thereof provides for exemption to the goods falling under Chapter or Heading or Subheading or tariff No.1508, 1509, 1510, 1512, 1513, 1514 or 1515 if the same answer the description "All goods, crude or edible grade". In the present case, it is not even the case of the respondents that the goods imported by the petitioners do not answer the said description. The case of the respondents is solely based upon the end use of such goods, which is a condition that is not provided under the said exemption notification. Thus, in essence and substance, the respondents seek to read something additional in the notification which has not been provided therein, which is not permissible in law. Under the circumstances, there is substance in the contention advanced on behalf of the petitioners that the impugned show cause notice is based upon the Circular No. 40/2001Cus., dated 13 th July 2001, which has been quashed by this court. Under the circumstances, the contention that the present case is directly covered by the decision of this court in the case Inter Continental (India) v. Union of India, 2003 (154) ELT 37 (Guj.) as affirmed by the Supreme Court in Union of India v. Inter Continental (India), 2008 (226) ELT 16, holding that the view taken by the High Court that the department could not, by issuing a circular subsequent to the notification, add a new condition to the notification thereby either restricting the scope of the exemption notification or whittle it down, merits acceptance. On a totality of the facts emerging from the record, it is evident that the respondents seek to read into the exemption notification the requirements of the Circular No.40/2001 Cus., dated 13.07.2001, which has been set aside in the above decisions.
11. As regards the contention raised with reference to Notification No.21/2002 dated 01.03.2002 that based on the usage, different rates Page 16 of 18 C/SCA/4418/2014 ORDER have been prescribed under the duty exemption notification, a perusal of the said notification discloses that wherever the Central Government thought it fit to impose a condition in respect of any particular class of goods, including a condition regarding the end use of such goods, it has been specifically provided therein. Whereas in respect of the class of goods at serial no.57of Notification No.12/2012, no condition has been provided and as such, no condition which has not been stipulated in the exemption notification can be read into it, with reference to some other notification.
12. In the aforesaid backdrop, it prima facie appears that the assumption of jurisdiction on the part of the second respondent by issuance of the impugned show cause notice is without any legal basis. The Supreme Court in the case of Whirlpool Corporation v. Registrar of Trade Marks, Mumbai (supra) has held that the jurisdiction of the High Court in entertaining a writ petition under Article 226 of the Constitution, in spite of the alternative statutory remedies, is not affected, especially in a case where the authority against whom the writ is filed is shown to have had no jurisdiction or had purported to usurp jurisdiction without any legal foundation. The said decision would apply on all fours to the present case. Accordingly, the contention that the petition is not maintainable does not merit acceptance.
13. As regards the decision of the Supreme Court in the case of Union of India v. Guwahati Carbon Ltd. (supra) on which strong reliance has been placed by the learned counsel for the respondent, the same does not lay down any absolute proposition of law that in no case, viz. even where by the facts make out a case where the exercise of powers by the authorities is without jurisdiction or where the concerned authority has usurped jurisdiction without any legal foundation, the Page 17 of 18 C/SCA/4418/2014 ORDER High Court should not exercise its plenary jurisdiction under Article 226 of the Constitution of India. Each case has to examined on its own facts, and if on facts a case is made out for exercise of powers under Article 226 of the Constitution in the light of the principles propounded by the Supreme Court in this regard, the availability of an alternative remedy will not bar the exercise of powers under Article 226 of the Constitution.
14. In the light of the above discussion, the court is of the view that the matter requires consideration. Moreover, the petitioners has been able to make out a prima facie case and the balance of convenience also lies in their favour inasmuch as if the respondents are permitted to proceed further they would have to unnecessarily face lengthy proceedings and undue harassment. Under the circumstances, the petitioners are entitled to interim relief as prayed for vide paragraph 19
(b) of the petition.
15. In the aforesaid premises, issue RULE, returnable on 27th November 2014. Ad interim relief is granted in terms of paragraph 19
(b) of the petition.
Direct service is permitted.
{Harsha Devani, J.} {Ms. Sonia Gokani, J.} Prakash* Page 18 of 18