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2015 (10) TMI 1921 - GUJARAT HIGH COURTAbatement of duty - manufacturing activity of Pan Masala - Demand of duty without following the procedure - Lack of Jurisdiction - alternative statutory remedy - Held that:- In the facts of the present case, the writ petition has been filed alleging violation of the principles of natural justice as well as on the ground that the impugned communications are wholly without jurisdiction. Under the circumstances, the existence of an alternative remedy would not preclude this court from entertaining the present petition having regard to the facts and circumstances of the case and the reliefs prayed for in the present petition. On a bare perusal of the communications / letters, it is apparent that prior to issuance thereof, no inquiry whatsoever has been carried out by the Deputy Commissioner of Central Excise as envisaged under sub-rule (2) of rule 6 of the Pan Masala Rules and that the impugned communications are based solely upon the instructions of the Additional Director, DGCEI, Delhi. Clearly therefore, the impugned communications are violative of the provisions of sub-rule (2) of rule 6 of the Pan Masala Rules, inasmuch as, the Annual Production Capacity of the petitioner’s factory has been determined without following the procedure as provided under those rules. In case the duty paid by the petitioners for the months of March 2015 to June 2015 was short-paid, the respondent authorities were required to resort to the provisions of section 11A of the Central Excise Act and without following the procedure as prescribed thereunder, could not have sought to recover the differential rate of duty by the impugned communications. In fact, the impugned communications do not refer to any provision of law under which the same have been issued. Whereas the subject under which the impugned communications have been issued is fixation of Annual Production Capacity of the Pouch Packing Machines, by the impugned communications, the petitioner has been called upon to pay the differential duty with interest for the months of March 2015 to June 2015. Evidently, therefore, the impugned communications suffer from various infirmities, inasmuch as, the same are in breach of the principles of natural justice as no opportunity of hearing has been given to the petitioner prior to revising the Annual Production Capacity of the petitioner; due procedure as prescribed under sub-rule (2) of rule 6 of the Pan Masala Rules has not been followed for the purpose of re-determining the Annual Production Capacity of the petitioner’s Pouch Packing Machines; the procedure as prescribed under section 11A of the Central Excise Act has not been followed while seeking to recover the differential amount of duty by the impugned communications. Under the circumstances, the impugned communications being contrary to the provisions of law, as well as being in breach of the principles of natural justice, cannot be sustained. - Decided in favour of assessee.
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