2017 (3) TMI 1931 - HC - Central Excise

Maintainability of petition - efficacious alternative remedy available to the petitioner - Denial for permission to clear the goods on provisional assessment basis under Rule 7 of the Central Excise Rules 2002 - HELD THAT - It is true that for maintainability of a writ petition alternative remedy is not a bar but when to invoke the extra ordinary jurisdiction under Article 226 of the Constitution will depend on the facts of each case. The fundamental principles which have been pronounced by the Hon ble Supreme Court from time to time and taking into consideration the facts and circumstances of this particular case it is not required to invoke the discretion more particularly when the order impugned is a well reasoned order dealing with the entire aspects argued before it by the petitioner company. The rule of exhausting the statutory remedy is a self-imposed limitation a rule of policy and the discretion rather than a rule of law. A writ court in exceptional cases can issue a writ notwithstanding the fact that the statutory remedy has not been exhausted. However the rule of policy relating to availability of alternative remedy can be ignored in the exceptional case only. The exceptional circumstances differ from case to case and facts to facts. In general it can be said that if there is a complete lack of jurisdiction in the officer or the authority to pass the impugned order if the order impugned is passed in flagrance violation of principal of natural justice if the order under challenge is absolutely non-speaking and unreasoned and not effective challenge to that can be given by availing remedy of appeal the violation of fundamental rights is apparent and availing of alternative remedy statutory remedy shall be nothing but an empty formality. Since none of the conditions exist in the present case and there is an equally efficacious alternative and statutory remedy of appeal under Section 35 of the Central Excise Act available to the petitioner the jurisdiction under Article 226 of the Constitution of India not exercised in this case - petition dismissed.

Summary

Issues Involved:
1. Maintainability of the writ petition in light of an efficacious alternative remedy.
2. Entitlement of the petitioner to clear goods on a provisional assessment basis under Rule 7 of the Central Excise Rules, 2002.
3. Interpretation and application of Section 4 of the Central Excise Act, 1944, and Rule 7 of the Central Excise Rules, 2002, regarding the valuation of goods.

Issue-wise Detailed Analysis:

1. Maintainability of the Writ Petition:
The respondents raised a preliminary objection regarding the maintainability of the writ petition, citing the availability of an equally efficacious alternative remedy under Section 35 of the Central Excise Act, 1944. The court acknowledged that while alternative remedies do not bar the maintainability of a writ petition, the discretion to invoke Article 226 of the Constitution depends on the facts and circumstances of each case. The court referred to precedents emphasizing that writ jurisdiction should be exercised in exceptional cases, particularly where fundamental legal questions or jurisdictional issues are involved. However, in this case, the court found that the order impugned was well-reasoned and the petitioner had an equally efficacious alternative remedy available, thereby dismissing the writ petition on these grounds.

2. Entitlement to Provisional Assessment:
The petitioner sought permission to clear goods on a provisional assessment basis under Rule 7 of the Central Excise Rules, 2002, for the period 2016-17. The petitioner argued that it had been following this practice for about 20 years and cited trade practices in the tyre industry, which involve allowing various types of discounts to customers and dealers. The petitioner contended that the final duty payable is always settled in accordance with the Act and rules, and there has been no breach or violation. The Assistant Commissioner, however, rejected the request for provisional assessment, stating that the petitioner must pay duty based on the value of similar excisable goods sold from the depot at the time of clearance from the factory, as provided under the law.

3. Interpretation and Application of Section 4 and Rule 7:
The court examined the provisions of Section 4 of the Central Excise Act, 1944, and Rule 7 of the Central Excise Rules, 2002. Section 4(3)(d) defines "transaction value" as the actual amounts paid or payable for goods sold, and duty is to be paid on this value. Rule 7 stipulates that where goods are transferred to a depot or consignment agent and sold from there, the value shall be the normal transaction value of such goods sold from the depot at or about the same time. The Assistant Commissioner observed that the petitioner should pay duty on the transaction value shown on the invoice, allowing abatement of upfront discounts given in the invoices. However, deductions for discounts determined at a later date were not permissible unless it was shown that these discounts were actually passed on to the buyers. The court referred to several judgments, including those from the Calcutta High Court and the Supreme Court, which supported the allowance of trade discounts known at or prior to the removal of goods, even if quantified later. Despite these precedents, the court upheld the Assistant Commissioner's decision, emphasizing that the petitioner must follow the prescribed procedure for determining the assessable value and paying duty accordingly.

Conclusion:
The court dismissed the writ petition, emphasizing the availability of an efficacious alternative remedy and the need for the petitioner to adhere to the statutory provisions regarding the valuation and assessment of excisable goods. The court's decision was based on a detailed examination of the legal provisions and relevant case law, ensuring that the principles of natural justice and statutory compliance were upheld.