Bombay High Court
Wasp Pump Private Limited A Company ... vs Union Of India (Uoi) Through The ... on 17 January, 2008
Equivalent citations: 2008(110)BOM.L.R.338, 2008(125)ECC8, 2008(151)ECR8(BOMBAY)
Author: F.I. Rebello
Bench: F.I. Rebello, R.S. Mohite
JUDGMENT F.I. Rebello, J.
Page 0340
1. Rule. Heard forthwith.
2. The petitioner is a manufacturer of Centrifugal Pumps. The petitioners also manufacture goods which are inputs for the pumps and which are used in the manufacture of the pumps. There is no dispute that the pumps as manufactured are exempt from Central Excise Duty. The Respondent Authorities by order dated 13th September, 2000 in respect of the castings manufactured by the petitioners held that the castings are marketable goods. Further held that they are classifiable under C.H.H. 73.25 and 74.19 (depending on the metal used) and, therefore, the classification was correct. Various other questions were considered and in conclusion proposed quantify the duty and consequently directed the assessee to furnish certain data. Another order was passed to the similar effect on 14th September, 2000.
3. Pursuant to the said orders the petitioner furnished the necessary information. By order dated 11th November, 2004 the respondent No.4 demanded duty on the CI castings for the amount specified therein. Subsequent thereto the petitioner preferred an Appeal before the Commissioner of Appeal. That appeal was filed beyond the prescribed period of limitation. The learned Appellate Authority found that they had no jurisdiction to condone the delay and consequently dismissed the Appeal by the order dated 28th April, 2006. Aggrieved by that order an Appeal was preferred to the CESTAT. The CESTAT on hearing the Appeal held that the Commissioner (Appeals) was right in not condoning the delay as that was beyond his jurisdiction. In view of that the application made for waiver of pre-deposit was rejected and consequently the Appeal also came to be dismissed.
4. By the present petition the petitioners seek to challenge the order passed assessing the duty and consequential orders seeking to recover the said duty.
5. On behalf of the petitioners their learned Counsel submits that it is no doubt true that the Appeals were dismissed being beyond the period of Page 0341 limitation. Nevertheless there is a clear failure of natural justice and fair play in as much as the respondent No.4 before having quantified the duty ought to have given them a hearing. It is, therefore, submitted that considering these facts it is always open to this Court to exercise its extra ordinary jurisdiction. For that purpose reliance is placed in the judgment of the Supreme Court in State of U.P. v. Mohd. Nooh AIR 1958 S.C. 86.
6. On behalf of the Respondents a reply has been filed by respondent No.4 setting out their case. One of the contentions raised is that considering that the Appeal has been dismissed as it was filed beyond the prescribed period this Court should not exercise its extra ordinary jurisdiction. In paragraph 7 it is set out that during the relevant period the pumps were only exempted from payment of central excise duty by virtue of notification dated 28th February, 1993 or were chargeable to Nil rate of duty by the Tariff Entry itself. The petitioner it is contended has not paid any central excise duty on the castings of cast iron and gun metal and spare parts manufactured by the petitioners and the said goods were consumed captively in the manufacture of the aforesaid pumps by the petitioners. Various steps thereafter taken for recovery of duty are set out. The respondent No.4 had rejected the contention of the petitioners that the casting is not marketable product. In para.16 of the affidavit it is set out that "...it is true that the Parts of Pumps were always exempt during the impugned period as they fall in Chapter Heading 84.13 of the first schedule to the Central Excise Traffic Act, 1985 However, although, according to the petitioners casting is a Part of Pumps manufactured by the petitioners, these castings are classified under separate Chapter Heading No.73.25 and 74.19 of the first schedule to the Central Excise Tariff Act, 1985 which attracts Central Excise Duty...". There is also a denial that the castings would fall under Chapter Heading 84.13 and, therefore, would be exempt from duty under diverse Notifications mentioned in the petition.
7. In rejoinder learned Counsel for the petitioners has pointed out the difficulties as to why they could not file the Appeals in time and approached this Court. It is in these circumstances that this would be a fit case for this Court to exercise its extra ordinary jurisdiction.
8. In the first instance we will deal with the preliminary objection as raised on behalf of the Revenue as to why this Court should not exercise its extra ordinary jurisdiction. Ordinarily once there be an alternative remedy and the party seeks recourse or having taken recourse to the remedy has exhausted the same and/or the Tribunal for some reason has declined to entertain the Appeal, this Court normally does not interfere in the exercise of its extra ordinary jurisdiction unless the order is a nullity at law. It is now a well settled proposition of law that if an order is nullity then it is invalid and its invalidity can be set up anywhere and everywhere when such order is sought to be executed or enforced. Gainful reference may be made to the judgment of the Supreme Court in Mohd. Nooh (supra). We may only reproduce the following paragraph:
Likewise in Khurshed Modi v. Rent Controller, Bombay it was held that the High Court would not refuse to issue a writ of certiorari merely because there was a right of appeal. It was recognized that ordinarily the High Court would require the petitioner to have recourse to his Page 0342 ordinary remedies, but if it found that there had been a breach of fundamental principles of justice, the High Court would certainly not hesitate to issue the writ of certiorari. To the same effect are the following observations of Harries, C.J., in Assistant Collector of Customs v. Soorajmull Nagarmul at p.470:
There can, I think, be no doubt that Court can refuse to issue a certiorari if the petitioner has other remedies equally convenient and effective. But it appears to me that there can be cases where the Court can and should issue a certiorari even where such alternative remedies are available. Where a court or tribunal, which is called upon to exercise judicial or quasi-judicial functions discards all rules of natural justice and arrives at a decision contrary to all accepted principles of justice then it appears to me that the court can and must interfere.
It has also been held that a litigant who has lost his right of appeal or has failed to perfect an appeal by no fault of his own may in a proper case obtain a review by certiorari. (See Corpus Juris Secundum, Vol. 14 Article 40, p.189). If, therefore, the existence of other adequate legal remedies is not per se a bar to the issue of a writ of certiorari and if in a proper case it may be duty of the superior court to issue a writ of certiorari to correct the errors of an inferior court or tribunal called upon to exercise judicial or quasi-judicial functions and not to relegate the petitioner to other legal remedies available to him and if the superior court can in a proper case exercise its jurisdiction in favour of a petitioner who has allowed the time to appeal to expire or has not perfected his appeal e.g. by furnishing security required by the statute, should it then be laid down as an inflexible rule of law that the superior court must deny the writ when an inferior court or tribunal by discarding all principles of natural justice and all accepted rules of procedure arrived at a conclusion which shocks the sense of justice and fair play merely because such decision has been upheld by another inferior court or tribunal on appeal or revision?
In the instant case admittedly before quantifying the duty, the petitioners were not granted hearing and as respondent No.4 was acting in a quasi judicial capacity, in our opinion the order suffers from violation of principles of natural justice and fair play and or denial of "a fair hearing". It would have been open to the Petitioner if opportunity was given to produce relevant documents. This opportunity was denied to them. Having said so, considering the facts and issues involved herein we are inclined to reject the preliminary objection and hear the petition on merits.
9. Learned Counsel on behalf of the petitioners has drawn our attention to the Notification dated 28th February, 1993 in the matter of power pumps which includes centrifugal pumps. It is pointed out that there is another Notification in operation from the year 1986, under which Notification exemption is also given to parts of power driven pumps primarily designed for handling water, which includes centrifugal pumps. Our attention is next invited to another Notification being General Exemption No.66 which under Item No.265 exempts goods other than what is set out therein. This, it is submitted, has to be read with Page 0343 condition No.51 considering that the goods are used for captive consumption within the factory. Our attention is also invited to the judgment of the Supreme Court in W.P.I.L. Ltd. v. Commissioner of Central Excise wherein the Apex Court noted that the power pump as well as parts thereof which are used for manufacturing of pumps have been exempted from levying of excise duty since 1978.
10. Considering the notifications even if the petitioners had not drawn the attention of the respondent No.4 to the same, a duty was cast on respondent No.4 to consider the said notifications as they were relevant for the purpose of assessment. Ignoring relevant documents would also result in error of law. There has, therefore, been a failure by Respondent No.4, in exercising his jurisdiction.
11. In our opinion and on the facts of this case this petition will have to be allowed by quashing the order and remitting the matter back to the respondent No.4 to consider afresh the assessment of duty bearing in mind the the Notifications issued from time to time.
12. Rule made absolute in terms of para.11. In the circumstances of the case there shall be no order as to costs.