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2014 (12) TMI 653 - HC - Central ExciseValidity of circular bearing No.145/56/95-CX dated 31.8.1995 - Classification of coconut oil packed in small container of sizes upto 200 ml - jurisdiction of CBEC to issue orders or circular in exercise of power under section 37B - violation of Article 14 of the Constitution of India - Held that:- the power under section 37B cannot be used to interfere with the exercise of quasi judicial power of adjudication and as the impugned circular is contrary to well settled principles, the impugned circular is bad for want of jurisdiction. Coconut oil is excluded from the purview of Chapter Note 2 of Chapter 33 and the same falls under Chapter 15 in the absence of any indication to show that it is meant for the use as cosmetics and irrespective of packings and the first respondent has no jurisdiction to issue circular, which has the effect of nullifying the decisions rendered by the Tribunal. Coconut oil in such small packs being purchased by poor people both for personal and domestic use, the nature of the use favourable to the assessee to be adopted in preference to other use as held by Gauhati High court in Shalimar Chemical Works Ltd case [2011 (7) TMI 1062 - GAUHATI HIGH COURT]. At the risk of repetition, it is stated that the small packs, having been mainly meant for economically poor and down trodden, the presumption that it is used as cosmetics than as edible oil, has no rhyme, reason or logic in the same. By doing so, the poor purchaser of small packs are burdened by levying additional service tax. The first respondent has through the impugned circular, proceeded to impose tax for the coconut oil packed in the container upto 200ml and thus usurped the function of the legislative body. The first respondent has sought to impose duty indirectly, which, the legislature would intend to impose directly in accordance with law. Thus way, the same amounts to indirectly legislating, which is not legally permissible. - Decision in the case of Delhi High court in Faridabad Iron and Steel Traders Association v. Union of India case [2003 (11) TMI 107 - HIGH COURT OF DELHI] followed. Impugned circular issued by the first respondent is held to be arbitrary, unreasonable, without jurisdiction, null and void and contrary to the provisions of the Central Excise Act, 1944, and ultra vires of Articles 14, 19(i)(g) and 21 of the Constitution of India and Section 37B of the Central Excise Act 1944 and the rules made thereunder and the Central Excise Tariff Act 1985, as such, the petitioner is entitled to the declaratory relief as sought for in this writ petition in respect of impugned circular passed by the first respondent. - Decided in favour of assessee.
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