TMI Blog2010 (8) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... ar, Sr. Standing Counsel, for the Appellant. Shri J. Shankar Raman, for the Respondent. [Judgment per : R. Banumathi, J.]. - Appeal allowed writ Appeal arises out of the Order of the learned single Judge dated 3-1-2001 passed in W.P. No. 11228 of 1992 [2001 (131) E.L.T. 328 (Mad.)] allowing the Writ Petition and quashing the order of Maritime Collector and thereby holding that the Respondent is entitled to rebate of Central Excise duty, being the duty paid on the yarn used for making thread. 2. Brief facts are that the Respondent has filed four rebate claims for a sum of Rs. 2,03,586.24, Rs. 70,647.56, Rs. 2,03,586.24 and Rs. 2,13,765.55, being the duty paid on the yarn content of thread, exported under AR4A Nos. 52/88-89 dated 26-9-1988, 44/88-89 dated 26-8-1988, 58/88-89 dated 9-11-1988 and 72/88-89 dated 8-3-1989 respectively. It was observed that the Respondent received single S.S. Polyester Yarn of 60/1 from M/s. Centenary Mill of Madurai for making S.S. Polyester thread of 60/2. The Polyester thread is exempted from duty vide Notification No. 53/87 dated 1-3-1987 and these goods alone are exported. After issuing show cause notice dated 6-9-1989 and after p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise Rules, 1944 for claiming rebate stipulates that "the goods are exported after payment of duty in cash direct from a factory or a warehouse". Stand of Appellants is that the above condition was not satisfied for the export of thread by the Respondent and the payment of excise duty of yarn by the sister concern of the Respondent is not relevant on the issue and therefore Maritime Collector has rightly rejected the rebate claim of the Respondent. 7. The learned single Judge held that the duty suffered yarn has been twisted into threads and it is the same yarn, which is in the form of thread and just because that yarn got transferred from one of the sister concerns of the Respondent, and got twisted into thread, the Excise Department cannot in any manner deny the rebate claims of Central Excise duty for the thread. The learned single Judge further held that the excise duty was paid on yarn by the sister concern and Respondent Mill having exported the thread and thread has not lost its identity and therefore the Department cannot claim the yarn twisted into thread did not suffer the excise duty so as to deny the rebate lawfully claimed by the Respondent. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e main thrust of argument of the Respondent is that the yarn has suffered duty, which was being twisted into thread and that no new commodity emerges and while so, the authorities cannot reject the claim of rebate of central excise duty being paid on the yarn. 10. The prayer of mandamus in the writ petition is three fold i.e., to quash the orders of 1st Respondent in (i) C.No. V/55/18/1/89 dated 28-12-1989; and (ii) C.No. V/55/18/1/89 dated 11-7-1991 and consequently (iii) to direct Respondents to refund the excise duty of Rs. 6,91,585.59 and Rs. 49,330.51 ps paid by the Respondent. 11.As rightly contended by the learned counsel for Appellants, as against the proceedings, dated 28-12-1989, Respondent preferred Appeal before the Collector of Central Excise (Appeals) and the same was dismissed on 3-1-1991, which was also challenged by way of revision before the Government of India. By the Order dated 24-6-1991, the revision also came to be dismissed. It is pertinent to note that in so far as four rebate claims made in AR4A No. 52/88-89, 44/88-89, 58/88-89 and 72/88-89, Respondent has not challenged the order of the Revisional authority dated 24-6-1991. Having exhausted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) E.L.T. 3 (S.C.), referring to its earlier decision in Seth Chand Ratan's case, (2003) 5 SCC 399, and observing that by invoking Article 226, the Appellant thereon cannot be allowed to defeat the provisions of the statute, the Supreme Court held as under : "44. Therefore, principle laid down in the Ratan's case (supra) applies in the facts and circumstances of this case. If the appellant in this case is allowed lo file a writ petition despite the existence of an efficacious remedy by way of appeal under Section 35 of FEMA this will enable him to defeat the provisions of the Statute which may provide for certain conditions for filing the appeal, like limitation, payment of court fees or deposit of some amount of penalty or fulfilment of some other conditions for entertaining the appeal. (See para 13 at page 408 of the report). It is obvious that a writ court should not encourage the aforesaid trend of by-passing a statutory provision." 15. Observing that in tax matters, judges must exercise self-discipline and that there shall be no short circuiting of statutory remedies, First Bench of this Court in M/s. Nivaram Pharma Private Limited rep. by its Director Sadarma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do otherwise." 16.Applying the ratio of the above decisions, in our considered view, since under Sections 35 and 35-B of the Central Excise Act, statutory remedy of appeal is available to the Respondent, the Writ Petition is not maintainable. By invoking writ jurisdiction, the Respondent cannot be allowed to defeat the provisions of the statute. 17. Placing reliance upon a Division Bench judgment of this Court in Madura Coats Ltd. v. Collector of Central Excise, Madurai, 2009 (246) E.L.T. 9 (Mad.), the learned counsel for the Respondent contended that when the Writ Petition has been pending before High Court for more than 15 years, it was not desirable to ask the writ Petitioner to avail alternative remedy before the CEGAT. That apart, since the export being made in 1988-89, at this distant point of time, it is not desirable to direct the Respondent to avail alternative remedy before the Appellate Authority, since the learned single Judge has gone into the merits of the matter and ordered refund of the duty paid on the yarn, notwithstanding the availability of statutory remedy of appeal, we thought it fit to examine the merits of the case. 18.The period of exports effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent and got twisted into thread, the Department cannot contend that the thread content suffered the excise duty so as to deny the rebate that is lawfully claimed by the Respondent. The learned single Judge also observed that the Polyester thread even after twisting as thread, the yarn has not lost its character/identity. In our considered view, we are unable to subscribe to the views of the learned single Judge that the yarn twisted or folded and made thread does not loose its character. 21. Note 3 of Section XI of the first Schedule to Central Excise Tariff Act of 1985 which came into force on 1-3-1986 and which was the law prevailing during the period of exports effected from 26-8-1988 to 22-11-1989 the relevant period reads as under : "For the purpose of Heading 52.03, 52.04, 54.04, 55.05 and 55.06 sewing thread means multiple (folded) or cabled yarn." (a) Put up on support (for example reels, tubes) of a weight (including support) not exceeding 1000 gms. (b) Dressed for use as a sewing thread (c) With a final 'Z' twist. As rightly contended by the learned counsel for the Appellants, the above statutory prescription shows that all the multiple fold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for reasons be recorded in writing, allow, the whole or any part of the claim for such rebate even if all or any of the conditions laid down in any notification issued under Rule 12 have not been complied with. 26. Learned counsel for Respondent therefore contended that even if proviso (i) to Notification no. 197/62 i.e., the goods are exported after payment of duty in cash direct from factory or warehouse is not satisfied, once the goods are exported it is always open to the Collector to order whole or any part of the claim for such rebate, notwithstanding that the conditions of notification have not been satisfied. The above contention of the Respondent cannot be countenanced. As per the proviso, it is purely the discretion of the Collector of Customs to order whole or any part of rebate even if the conditions laid down and notifications have not been complied with. There cannot be a writ of mandamus directing the authorities to exercise discretion in a particular manner. This is all the more so when in respect of earlier exports, the authorities have taken the view that the Respondent is not entitled to the rebate claimed on the duty paid on the yarn. The order of the le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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