Orissa High Court
Ms. Jindal Steel And Power Limited vs Union Of India And Another on 2 May, 2016
Author: Indrajit Mahanty
Bench: Indrajit Mahanty
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THE HIGH COURT OF ORISSA : CUTTACK
W.P.(C) No.810 of 2016
In the matter of an application under Articles 226 and 227 of the
Constitution of India.
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M/s. Jindal Steel & Power Limited ... Petitioner
-Versus-
Union of India & another ... Opp. Parties
For Petitioner : M/s. Ravi Raghavan, Mukesh Panda,
V. Jena & L. Sahoo
For Opp. Parties : Mrs. Mrinalini Padhi,
Standing Counsel, Central Excise,
Service and Customs
PRESENT:
THE HON'BLE MR. JUSTICE INDRAJIT MAHANTY
&
THE HON'BLE DR. JUSTICE D.P. CHOUDHURY
________________________________________________________
Date of hearing: 05.04.2016 Date of Judgment: 02.05.2016
________________________________________________________
Dr. D.P. Choudhury, J. In the captioned writ petition challenge has been made to
the order dated 30.11.2015 passed by the opposite party No.2-
Commissioner of Customs, Central Excise and Service Tax, Rourkela
confirming the duty demand of Rs.63,73,51,977/- under Section-11A
of the Central Excise Act, 1944 (hereinafter called "the Act"), along
with applicable interest and equal penalty under Sections-11AA and
11AC of the Act, respectively, read with Rule 25 of the Central Excise
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Rules, 2002 (hereinafter called "the Rule"), along with penalty of
Rs.5,000/- under Rule 27 of the Rules, 2002. Challenge has been
made further to the aforesaid order as perverse and contrary to the
provisions of law, HSN Explanatory Notes, and Circular issued by the
Board and the judgment of the Hon'ble Apex Court.
FACTS
2. The factual matrix leading to the case of the petitioner is
that petitioner-Company is engaged in the business/activity of
manufacturing Iron and Steel items. For the purpose of manufacture of
the said items, the petitioner also carries out the activity of mining and
extraction of Iron Ores from various locations in their own captive
mines at Tensa, in the district Sundargarh of the State of Odisha. After
extraction of the Iron Ore, the petitioner used to carry out the process
of crushing and screening of the Iron Ores in order to reduce the size
of the Ores in two categories, i.e., 'fines' below the size of 5 mm and
'lumps' within the size of 5 mm and 200 mm. As such the petitioner
has been engaged in production of sized Iron Ore, i.e., 'lumps' and
'fines' since 2011. It is further stated that the petitioner was not
registered with the Central Excise Department during the relevant
period as the sized Iron Ore produced by it was exempted from
payment of excise duty under Notification No.4/2006-CE dated
1.3.2006 which exempts Ores under Chapter Headings 2601 to 2617
of Chapter 26 of the First Schedule to the Central Excise Tariff Act,
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1985 (hereinafter called "CETA, 1985") from the payment of Excise
Duty.
3. In the Union budget for the year 2011-2012, Chapter
Note 4 to Chapter 26 of the First Schedule to the Central Excise Tariff
Act, 1985 was inserted to state that the process of converting Ores to
Concentrates will amount to manufacture and after such insertion the
opposite party-Department started investigation into the processes
undertaken by the petitioner to find out whether it amounts to
manufacture.
4. The petitioner carries out the mining of Iron Ore to obtain
the Run of the Mines (for short, ROM) which is a term referring to the
material extracted from the Mines. It is explained in the petition that
ROM excavated from the mines is brought to the Crushing Plant of the
petitioner and this ROM consists of 'lumps' of different sizes. Neither of
the terms 'lumps' nor 'fines' are either defined in Chapter 26 of the
First Schedule to the Central Excise Tariff Act, 1985 or in the HSN
Explanatory Notes. It is stated that ROM transported from mines was
first put into Crusher to make the ROM in small pieces of size up to
200 mm. then Screening of the same is made to separate the size up
to 5mm. Thereafter the Iron Ore above 5 mm is sent for secondary
Crushing and the size becomes 20 mm. But by the Union Budget for
the year 2011-2012, Chapter Note 4 was inserted in Chapter 26 of the
First Schedule to the Central Excise Tariff Act, 1985 by stating that the
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process of converting Ores into concentrates amounts to manufacture
and as such the petitioner is liable to pay Central Excise duty after
registration under Central Excise. Accordingly, letter was sent by the
Department to the petitioner on 19.3.2011. The petitioner replied on
14.4.2011 to the Department stating that he has undertaken the
process, i.e., crushing of Iron Ore into smaller sizes and separation of
different sizes do not amount to concentration and the products are
not concentrates. But thereafter the correspondence between the
Department and the petitioner continued. Petitioner has also disclosed
the details of the sized Iron Ores during the relevant period by
disclosing the same as value of the total 1,76,863.800 Metric Tons of
sized Iron Ore was Rs.78,46,63,365/-.
5. It is further stated that the Department issued notice to
show cause demanding Central Excise duty amounting to
Rs.08,08,20,327/- on the said quantity of sized Iron Ore valued at
Rs.78,46,63,365/- for the period from March 2011 to January 2012 on
the ground that the Concentrates as covered in Chapter 26 are
products which emerge to render the ores in lumps and as such it is
the Mineral products under Chapter 26 of HSN and therefore, the
product of the petitioner is exigible. The petitioner submitted that
Notification No.4/2006-CE dated 1.3.2006 has provided that Ores
falling under different headings is exempted but it does not apply to
Concentrates making them dutiable. The petitioner replied to the
show cause mainly submitting that the petitioner had not undertaken
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the activity of washing or beneficiation of the Ore in their mines and
hence there was no concentration undertaken for which he is not liable
to pay any duty on the Ore cleared in their factories. But the
Department slapped with two more show cause notices vide C
No.V(26)15/Adjn/B-II/89/2014/3699-A dated 25.2.2015 and C No.V
(26)15/Adjn/B-II/28/2015/7447A dated 16.4.2015 demanding an
amount of Rs.42,45,70,233/- for the period of February 2012 to March
2014 and an amount of Rs.17,96,15,969/-for the period from April
2014 to November 2014, respectively. The personal hearing was
granted to the petitioner and the petitioner submitted that the case
has already been decided in their favour vide CBEC Circular
No.332/1/2012-TRU dated 17.2.2012 and the demand made should be
accordingly dropped. Learned Commissioner concluded the hearing
and without visiting the mines and understanding the process
undertaken by the petitioner, passed the impugned order on
30.11.2015 by confirming the demand of Rs.63,73,51,977/- under
Section 11A of the Central Excise Act, 1944 along with equal amount
of penalty under Section 11 AC of the Central Excise Act read with Rule
25 of the Central Excise Rules, 2002 with an additional penalty of
Rs.5,000/- under Rule 27 of the Central Excise Rules, 2002 for not
taking Central Excise Registration. Not only this but also the learned
Commissioner charged the interest under Section 11AB/AA of the Act
without considering the argument of the petitioner and without taking
the CBEC Circular dated 17.2.2012 into consideration as the said
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Circular specifically states that the process of crushing and screening
of Iron Ores does not result in Iron Ore Concentrate. Since the
impugned order was palpably wrong and perverse one, the present
writ petition is filed to set aside the impugned order with various
prayers including the constitutionality of the circular issued by the
Finance Department by including the prayer to declare the Circular
No.984/08/2014/CX issued under F.No.390/Budget/1/2012-JC
Government of India Ministry of Finance Department of Revenue
(Central Board of Excise and Customs), New Delhi dated 16.09.2014
as unconstitutional and ultra vires the Act and further to declare the
CESTAT Circular F. No.15/CESTAT/General/2013-14 dated 14.10.2014
as unconstitutional and ultra vires. But during course of argument,
learned counsel for the petitioner abandoned the said prayers to
declare such circulars as unconstitutional and ultra vires.
6. Opposite party No.2 filed counter stating that the writ
petition is not maintainable on fact and law. It is further stated that
the CBEC Circular dated 17.2.2012 as submitted by the petitioner is
not acceptable as the Circular is clarificatory in nature but not a
decision. In the Union Budget 2011-2012 Chapter-26 of the Central
Excise Tariff Act, 1985 (herein after called 'CETA 1985') was added
with the clause "the process of converting ore to concentrates shall
amount to manufacture". The HSN note to the Chapter 26 states "for
the purpose of Heading 26.01 to 26.17, the term 'concentrate' applies
to ores which have had part or all of the foreign matters removed by
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special treatments, either because such foreign matter might hamper
subsequent metallurgical operation or with a view to economic
transport". So, the process of crushing, screening, grinding, washing
etc. to remove foreign materials so as to make it fit for economical
transportation and subsequent use in the metallurgical operations can
be termed as Iron Ore Concentrate for which the same is dutiable.
When process of converting ore to concentrates is required, it amounts
to manufacture coming under Chapter 26 of the CETA Act, 1985 to
show the Tariff under Chapter 26 covers both "Ores and Concentrates"
which have been submitted to process normal ore to the metallurgical
industries.
7. It is stated in the counter that processes undertaken by
the petitioner are normal to the metallurgical operation for extraction
of metals and therefore, nothing but the crushing, screening, grinding,
washing etc. are meant to separate the impurities associated with the
natural ores. These processes are carried out for transporting the ores
from the pit mouth of the mines to the metal extracting plants,
otherwise there will be heavy transportation cost. Thus, the
concentrates as covered under Chapter 26 of CETA, 1985 are products
which emerge as to render the ores as they emerge from mines to a
stage capable of be used in metallurgical process. Since Chapter 26 of
CETA, 1985 deals with 'mineral products' under Section-V of HSN
classification, it deals with natural products as they emerge as ores in
Chapter 26 as the abbreviated HSN clearly explains, it is mere physical
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transition from 'ores in lumps' to 'ores in concentrate' which the
chapter covers. Moreover, sub-heading 26011110 covers iron ore
lumps (60% Fe or more), 26011120 covers 'Iron Ore Lumps (below
60% Fe), same being the case with iron ore fines whereas
'Concentrates' are covered under sub-heading 26011150 as the
Ferrous content is of relevance for 'Ores', 'Concentrates' are products
emerging in the physical process of metallurgy and herein percentage
of Ferrous content is not relevant. As the Explanation is only in respect
of 'Ores', it does not apply to 'Concentrates'. Accordingly,
'Concentrates' are dutiable. So, the learned Commissioner, Central
Excise, Customs & Service Tax, Rourkela has rightly confirmed the
demand made against the petitioner.
8. It is stated that the contention of the petitioner that
crushing and screening are not special process is not correct as the
crushing and screening are physical process undertaken by the
petitioner amounts to manufacture as per the HSN Note and resultant
product is nothing but Iron ore 'Concentrate' falling under Chapter
26011150 of CETA, 1985. So far as demand made by the Department
is justified, opposite party No.2 has also correctly confirmed the
demand made against the petitioner. Hence, it is submitted to dismiss
the writ petition and affirm the impugned order of the Commissioner,
Central Excise, Customs & Service Tax, Rourkela.
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SUBMISSIONS
9. Mr. R. Raghavan, learned Senior Advocate for the
petitioner submitted that the Commissioner has failed to consider the
CBSE Circular No.332/1/2012-TRU dated 17.2.2012 which is binding
on him and as such erred in law by passing the impugned order.
Learned Commissioner has failed to rely on the portion of the said
Circular which states in clear and unequivocal terms that the process
of "crushing and screening" does not amount to "special treatment"
and therefore, the product that emerges after the process of crushing
and screening cannot be considered as Iron Ore concentrate. It is
reported in Paper Products Ltd. v. Commissioner of Central
Excise, reported in 1999 (112) E.L.T. 765 (S.C.) where Their
Lordships observed that Department circulars and clarifications are
binding on the Department's Officers. But in the instant case the
learned Commissioner has failed to follow the circulars of the
Department and as such did not obey the decision of the Hon'ble Apex
Court for which said impugned order is illegal. Learned counsel for the
petitioner further submitted that the final product is merely Iron Ore in
similar sizes (sized ore) and is not a concentrated as the process of
crushing and screening do not amount to Concentration. According to
him under CETA of 1985 there is no definition of term 'Concentrates'
but term 'Ores' is defined under Chapter Note 2 of Chapter 26 of the
First Schedule to the CETA 1985 stating that for the purpose of
headings 2601 to 2617, the term 'Ores' means minerals of
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mineralogical species actually used in the metallurgical industry for the
extraction of mercury. Again it is stated that headings 2601 to 2617 do
not, however, include minerals which have been submitted to
processes not normal to the metallurgical industry. As the term
'concentrate' is not defined in the First Schedule to the CETA, 1985 for
which HSN Explanatory Notes may be referred to as the said Note
defined 'Concentrates' by stating that 'Concentrates' applies to Ores
which have had part of all of the foreign matter removed by special
treatments. Since the loose materials are required to be removed from
'Ore' by a simple mechanical process of screening and making them to
ores, such a process will not amount to any process of Concentration
as the ore is not being subjected to any special treatment. So, it is
submitted that the learned Commissioner has failed to distinguish
between the Concentrates and the Ore.
10. Mr. R. Raghavan, learned Senior Advocate further
submitted that crushing and screening do not amount to concentration
as per HSN Explanatory Notes and Technical Literature. The
Department of Revenue is of the opinion that the crushing and
screening do not amount to Concentration for which the Commissioner
has passed the impugned order which is otherwise illegal, improper
and against the instruction of the Revenue Department. As per
Scheme of the Central Excise Tariff also, iron ore 'Concentrates' are
different from Iron Ore 'lumps' and iron ore 'fines' which are actually
material produced by the petitioner because heading 2601 of the
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Central Excise Tariff provides different classifications for Iron Ore
lumps (26011110 and 26011120 for Fe content of 60% or more and
below 60% respectively), Iron Ore fines (26011130 and 26011140 for
Fe content of 62% or more and below 62% respectively), and Iron Ore
concentrates (26011150). It is submitted by the learned counsel for
the petitioner that from the aforesaid analogy it is evident that Iron
Ore lumps, Iron Ore fines and Iron Ore Concentrates are all different
products. It is reported in Union of India v. Delhi Cloth and
General Mills, 1977 (1) E.L.T. (J 199) (S.C.) where Their Lordships
observed that manufacture is generally understood to mean as
"bringing into existence a new substance" but do not mean merely "to
produce some change in a substance." So, the Iron Ore in the ROM
even after crushing and screening continues to Iron Ore all of different
sizes as compared ores excavated from the Mines and fed into crusher.
11. Mr. R. Raghavan, learned Senior Advocate for the
petitioner while distinguishing the complete processes than on
crushing and screening cited various decisions, they are (a)
Bheraghat Mineral Industries v. Divisional Deputy
Commissioner of Sales Tax 1992 (61) E.L.T. 560 (MP); Collector
of C. Ex., v. Mahavir Minerals Store Supply Co. 1988 (38) E.L.T.
171 (Tribunal); Commissioner of Central Excise BBSR v. Ispat
Chrome Ltd. 2001 (134) E.L.T. 236 (Tri.- Kolkata); Indian Rare
Earths Ltd. v. Commissioner of Central Excise, BBSR-I 2002
(139) E.L.T. 352 and Commr. of Cus. and C. Ex., JSR and BBSR-
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II v. Steel Authority of India Ltd. 2003 (154) E.L.T. 65 (Tri.-
Kolkata). Learned Commissioner has erred in law by observing that
the petitioner's argument of revenue neutrality cannot be accepted as
show cause notices have alleged suppression and misstatement and
therefore, credit in terms of Rule 9 (1)(b) of the Cenvat Credit Rules,
2004 will not be available.
12. Mr. R. Raghavan, learned Senior Advocate for the
petitioner also submitted that provisions of Section 35B of the Act is
not applicable in the present case and the order of the Commissioner
is passed being violative of Articles 14, 19 (1) (G) and 265 of the
Constitution of India. It is submitted that in case of appeal under
Section 35-B the compulsory pre-deposit under Section 35-F of the Act
is hardship on the part of the petitioner and as such the impugned
order itself violates the fundamental right of the petitioner. The
impugned order is violative of principles of natural justice as it is well
settled that same order has been passed without application of mind
and demands are therein ex facie, unsustainable for any reason. It is
also submitted for the petitioner that no penalty is imposable and no
interest is chargeable although the learned Commissioner has erred in
law by imposing the penalty and the charge interest on the demand.
He cited the decision of the Commissioner of Central Excise,
Aurangabad v. Balakrishna Industries; 2006 (201) E.L.T. 325
(S.C.) in support of his contention. It is also submitted that no
efficacious alternative remedy is available with the petitioner for which
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the present writ petition has been filed. So, ultimately it is prayed by
the learned counsel for the petitioner to set aside the order of the
Commissioner, Central Excise and allow the writ petition.
13. Mrs. Mrinalini Padhi, learned Standing Counsel for the
Revenue submitted that the reliefs prayed for by the petitioner are not
acceptable because the CBEC Circular No.332/1/2012-TRU dated
17.2.2012 is clarificatory in nature but not a decision to be followed by
the opposite party No.2. It is also submitted that the processes of
crushing, screening, grinding, washing etc. undertaken by the
petitioner make the Iron Ores fit for economical transportation and
subsequent use in the metallurgical industries and therefore, in the
Union Budget 2011-12 the amendment was brought in Chapter 26 of
CET Act, 1985 to the effect that process of converting ore to
Concentrates shall amount to manufacture. Since the Iron Ore is the
Concentrate product of the petitioner and the petitioner has not
registered to pay Central Excise duty thereon, rightly the show cause
notice was issued making demand to pay such amount by the
petitioner. She further submitted that the contention of the learned
Senior Advocate for the petitioner that the petitioner only makes
product of the Ores and not Concentrate is not correct because for the
purpose of Heading 26.01 to 26.17 the term 'Concentrates' applies to
ores which have had part or all of the foreign matter removed by
special treatments either because such foreign matter might hamper
subsequent metallurgical operations or with a view to economical
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transport. The processes undertaken by the petitioner are normal to
the metallurgical operations for extraction of metals. The processes
undertaken by the petitioner like crushing, screening, grinding,
washing etc. are meant to separate the impurities associated with the
natural ores for their transportation from the pit mouth of the mines to
the metal extracting plants. So, the contention of the learned counsel
for the petitioner that the crushing and screening are simply meant for
preparing the sizes of the Iron ore but not the 'concentrates' is not
correct.
14. It is submitted by the learned Standing Counsel for the
Revenue that the 'Concentrate' have reference to physical rate of
strengthening the 'ores in lumps' minus 'mud and gang materials' to a
form to be used for metallurgical process and in that scheme no way
of metallurgical content is to decide on the classification as per the
HSN Note to Chapter 26 of CETA, 1985. It is clear that while Ferrous
content is of relevance for 'Ores', 'Concentrates' are products emerging
in the physical process of metallurgy for which the percentage of
ferrous content is not relevant. According to her, the process of
crushing and screening of iron ores by petitioner gives rise to Iron Ore
concentrate in terms of Chapter Note 4 of Chapter 26 of the First
Schedule to Central Excise Tariff Act, 1985 for which such process
amounts to manufacture. So, the order passed by the opposite party
No.2 making the product of the petitioner dutiable is undoubtedly
correct order.
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15. It is submitted by the learned Standing Counsel for
Revenue that crushing and screening are physical operation for
manufacture of iron ore concentrate from iron ore and the two phases
of crushing and screening makes liberation of sized iron ore from
gangue materials and impurities. As such, crushing, screening and
physical process undertaken by the petitioner amounts to manufacture
as per HSN Note and the resultant product is nothing but Iron Ore
Concentrate falling Under Chapter 26011150. So, the contention of the
learned Senior Advocate for the petitioner that crushing and screening
are not special treatment undertaken by the petitioner is not
acceptable so as to avoid to bring it under the HSN Note. She further
stated that the exemption Notification No.4/2006-CE dated 1.3.2006 is
to be interpreted as the Legislature has intended to treat ores and
concentrates as two distinct items and such Notification HSN exempts
only 'ores' for which the concentrates automatically falls outside the
purview of the notification. Therefore, the petitioner is not entitled to
get benefit extended under Notification No.4/2006-CE dated 1.3.2006.
16. Learned Standing Counsel for the Revenue further
submitted that sized iron ore continues to be identified under the
Central Excise Tariff as iron ore concentrate but not as iron ore as
submitted by the learned Senior Advocate for the petitioner. In view of
the judgment passed in M/s. Star Industries v. Commissioner of
Customs (Imports), Raigarh in Civil Appeal No.6088 of 2013 by the
Hon'ble Apex Court the contention of the petitioner that the entire
16
judgment is Revenue neutral does not stand in the eye of law. The
case law relied upon by the petitioner cannot be pressed into the facts
and circumstances of this case as they are prior to 1.3.2011 on which
date CETA, 1985 was amended and excise duty was levied on Iron Ore
concentrate. Since the petitioner has suppressed material facts and
evaded payment of Central Excise Duty, the impugned order asking for
payment of demand along with interest charged with penalty is
undoubtedly correct. Since the petitioner has deliberately cleared Iron
Ore concentrate without payment of Central Excise duty, also he is
liable to pay interest, penalty and additional penalty under the Central
Excise Act and Rules made thereunder.
17. Mrs. Padhi, learned Standing Counsel for the Revenue
further submitted that there is efficacious remedy available to the
petitioner by filing appeal against the impugned order for which the
present writ petition is not maintainable and the Court may reject the
writ petition directing the petitioner to file appeal, if so advised, and
may raise all such contentions there.
18. Points for consideration:-
(i) The first and foremost point is to be decided whether the writ
petition is maintainable in view of the pleadings made by both the
parties.
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DISCUSSIONS
POINT NO.(i) :
19. After dropping the prayer for declaring the concerned
Circular of the CBEC as ultra vires, there remains only prayer to quash
the impugned order of the Commissioner of Central Excise as the same
is illegal, improper. Further it is prayed to direct the Central Excise,
Customs, Service Tax Appellate Tribunal (hereinafter called 'CESTAT')
not to insist for pre-deposit under Section 35-F of the Act in the event
of filing appeal before the CESTAT. On the other hand, the learned
Standing Counsel for the Revenue has strongly contended that there is
clear provision under Section 35-B of the Act to file appeal before the
CESTAT against the impugned order passed by the Commissioner of
Central Excise and this is not a case where the writ petition should lie
when there is efficacious remedy available under the statute. Learned
counsel for the petitioner submitted that even if there is efficacious
remedy available under Section 35-B, yet the writ is maintainable.
20. Having considered the contentions of the respective
parties, we are of the view that in this writ petition there are several
contentions raised relating to dutiability of the product of the petitioner
requiring adjudication of facts. Moreover, it is available from the
petition that the Commissioner of Central Excise had fixed for spot visit
but without going to the said Mines has passed the impugned order,
thus, requiring further materials to be gone through by the fact finding
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authority. If the facts required to be decided will prove the way to
decide the issues arising between the parties, same can only be
decided either by the Commissioner of Central Excise or by the
appellate authority but not the same can be entertained in the writ
petition.
Section 35-B (1) of the Central Excise Act, 1944 states as
follows:-
35-B. Appeals to the Appellate Tribunal.- (1) Any
person aggrieved by any of the following orders may
appeal to the Appellate Tribunal against such order-
(a) a decision or order passed by the (Principal
Commissioner of Central Excise or Commissioner of
Central Excise] as an adjudicating authority;
(b) an order passed by the [Commissioner
(Appeals)] under section 35-A;
(c) an order passed by the Central Board of Excise
and Customs constituted under the Central Boards of
Revenue Act, 1963 (54 of 1963) (hereafter in this
Chapter referred to as the Board) or the Appellate
[Commissioner of Central Excise] under section 35, as it
stood immediately before the appointed day;
(d) an order passed by the Board or the [Principal
Commissioner of Central Excise or Commissioner of
Central Excise], either before or after the appointed day,
under section 35-A, as it stood immediately before that
day :
[Provided that no appeal shall lie to the Appellate
Tribunal and the Appellate Tribunal shall not have
jurisdiction to decide any appeal in respect of any order
referred to in clause (b) if such order relates to, -
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(a) a case of loss of goods, where the loss occurs in
transit from a factory to a warehouse or to another
factory, or from one warehouse to another, or during the
course of processing of the goods in a warehouse or in
storage, whether in a factory or in a warehouse;
(b) a rebate of duty of excise on goods, exported to
any country or territory outside India or on excisable
materials used in the manufacture of goods which are
exported to any country or territory outside India;
(c) goods exported outside India (except to Nepal
or Bhutan) without payment of duty;
[(d) credit of any duty allowed to be utilized
towards payment of excise duty on final products under
the provisions of this Act or the rules made thereunder
and such order is passed by the Commissioner
(Appeals) on or after the date appointed under section
109 of the Finance (No. 2) Act, 1998 :]
Provided further that the Appellate Tribunal may,
in its discretion, refuse to admit an appeal in respect of
an order referred to in clause (b) or clause (c) or clause
(d) where -
(i) in any disputed case, other than a case where
the determination of any question having a relation to
the rate of duty of excise or to the value of goods for
purposes of assessment is in issue or is one of the
points in issue, the difference in duty involved or the
duty involved; or
(ii) the amount of fine or penalty determined by
such order, does not exceed [ two lakh rupees];
From the aforesaid statutory provision, it appears that
against any decision passed by the Commissioner of Central Excise as
20
an adjudicating authority, the appeal lies to Appellate Tribunal. It is
already discussed in the above para that there are certain facts raised
before us are required to be adjudicated in appeal and the same
cannot be adjudicated in the writ petition. Reliance is placed on a
decision of this Court in Larsen & Toubro Limited v. State of
Orissa and others; 1998 (111) STC 75 (Orissa) where it is held
that if petitioner could avail the statutory remedy by filing an appeal,
the court would not entertain the writ petition.
21. It is submitted by the learned counsel for the petitioner
that this Court in Sonic Electrochem (P) Ltd. v. State of Orissa
and others; 1994 (92) STC 117 (Orissa) held that even an
alternative remedy is available, the High Court can interfere under
Article 226 of the Constitution if extraordinary circumstances are made
out. The decision cited by the learned counsel for the petitioner is not
applicable to the facts and circumstances of the case for which it is not
followed in this case. It is also submitted that the impugned order
passed by the learned Commissioner of Central Excise is due to non-
application of judicial mind and same is passed mechanically. Since the
impugned order was passed violating the principles of natural justice
and not in accordance with law, same is only be set aside by the order
of this Court passed under Article 226 of the Constitution of India.
According to him even if the efficacious remedy is available but the
writ jurisdiction will lie in view of the impugned order passed without
application of mind and against the principle of law. On the
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other hand, the learned counsel for the opposite party No.2
vehemently opposed the contention stating that the Writ Court cannot
adjudicate on facts and the impugned order does not suffer from any
vires requiring this Court to intervene.
22. In the aforesaid para we have already observed in this
writ petition that further facts are to be adjudicated and same can only
be addressed before the appellate court. Moreover, there is clear-cut
provision under Section 35-B to file appeal. It is available from the
contention of the learned counsel for the petitioner that in an earlier
occasion when the petitioner manufactured the same product, the
petitioner was served notice by the Department in the year 1996
asking to pay duty as same was iron ore concentrate chargeable to
duty. Petitioner had also challenged the same before this Court in
W.P.(C) Nos.13201 and 13437 of 1996 and this Court vide order dated
30.7.1997 dismissed the writ petition directing the parties to file
appeal as the alternative remedy is available. Now the same party with
same contention has come up to this Court of course due to demand
made by the O.P. No.2 basing on amendment to Ch.26 w.e.f. 1.3.2011.
23. In view of the aforesaid analysis, we refrain from deciding
any issue raised before us. We are of the considered view that since
efficacious remedy by way of filing appeal before the CESTAT is
available, we hereby direct the petitioner to challenge the impugned
order before the appellate authority under Section 35-B of the Act and
raise all such contentions raised before us within a period of two weeks
22
from today and in the event of filing appeal, the appellate authority
will dispose of the same early by hearing both the parties and both
parties are free to raise respective contentions as raised before us and
also any other materials to which they think it proper to address. In
view of hardship pleaded by petitioner, we further direct that the
petitioner would make 5% of the demand of duty as pre-deposit under
Section 35-F of the Act while filing appeal and rest of the demand of
duty, interest and penalty will remain in abeyance till disposal of the
appeal and the CESTAT will not insist to deposit the rest of the demand
of duty, interest and penalty directed to be paid under the impugned
order.
The writ petition is disposed of accordingly. Interim order
stands vacated.
..................................
Dr. D.P. Choudhury, J.
I. Mahanty, J.I agree.
.................................. I. Mahanty, J.
ORISSA HIGH COURT, CUTTACK The 2nd May, 2016/Kar