TMI Blog2013 (4) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... being asked to pay duty of 8% ad valorem. It is for this reason that we are of the view that this writ petition seeks enforcement of fundamental right to carry on trade or business without any discrimination of any nature. The present petition is not the one in which the controversy centres around the issues which are primarily questions of fact. - here are good grounds in the present case so as to entertain this petition despite the fact that there is a remedy of appeal available under Section 35G of the Act. Any clarification issued by the Board is binding to the Central Excise Officers who are duty-bound to observe and follow such circulars. Whether Section 37B is referred to in such circular or not is not relevant. - Decision in the case of Ranadey Micronutrients v. Collector of Central Excise [1996 (9) TMI 124 - SUPREME COURT OF INDIA] followed. The submission that the letters issued by the Board in the present case were communications answering queries raised by the Commissioners of particular areas and hence such letters were not binding because they were not issued under Section 37B is not the correct proposition. When other Central Excise authorities of equal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hapter 44 of the First Schedule to the Central Excise Tariffs Act, 1985, has prayed for a writ upon the respondents, quashing and setting aside the order dated 28th December 2011 passed by the Commissioner of Central Excise, Customs and Service Tax, Surat-II and has also prayed for a further relief to declare that the goods manufactured by the petitioner, namely, Bagasse boards were chargeable to nil rate of duty under Serial No. 82(vi) of Table to Notification No. 6/2006-C.E. Introductory facts of SCA No. 1667 of 2012 5. By way of this petition, the petitioner, a private limited company engaged in the business of manufacturing of plain particle boards and pre-laminated particle boards popularly known as Bagasse boards which are goods falling under Chapter 44 of the First Schedule to the Central Excise Tariffs Act, 1985, has prayed for a writ upon the respondents, quashing and setting aside the panchnama and the detention memo dated 21st May 2012 and has further prayed for a writ upon the respondents directing them to release the goods and the documents detained and seized respectively vide detention memo and panchnama dated 21st May 2012. I. Case of the Petitioners 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the clearances and the petitioner has also been submitting monthly reports as prescribed under the Central Excise Rules, 2002 showing therein the details of all the quantities of Bagasse boards cleared by the petitioner. 12. In response to the letters dated 1st June 2006 and 26th June 2006 as referred to above, the Superintendent of Central Excise ultimately wrote two letters dated 12th December 2006 and 21st December 2006 asking the petitioner to provide with the details of raw-material used in the product in question and also the manufacturing process. 13. The petitioner submitted a detailed letter dated 26th December 2006 furnishing the requested information as sought for to the Range Superintendent. 14. The petitioner did not receive any further letter or communication from the Central Excise authorities, and at the same time, the petitioner was not asked that he should not clear Bagasse boards at nil rate of duty and, therefore, the petitioner continued clearing the goods at nil rate of duty. 15. Ultimately, the Additional Commissioner of Central Excise issued a show-cause notice F.No. V (CH.44) 15-07/Dem/07 dated 20th June 2007, proposing to recover a sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of or deal with the same without an order in writing from the Central Excise Officer. 21. Due to such action on the part of the authorities, the petitioner submitted a representation dated 8th February 2008 to the Commissioner, Surat-II and also requested the Assistant Commissioner, Ankleshwar vide order dated 12th February 2008 to release the seized goods. However, a communication dated 13th February 2008 was received from the Superintendent by which the petitioner was directed to clear the goods on payment of duty under Notification No. 4/2006-C.E. as amended from time to time on the basis that the goods were 100% wood-free plain or pre-laminated particle or fiber board made from sugarcane Bagasse or other agro-waste attracting excise duty @ 8% ad valorem under Notification No. 4/2006-C.E. 22. The petitioner was left with no other option but to approach their Association and brought the above actions taken against them by the Central Excise authorities, to the notice of the Association and thereupon the petitioner received a letter dated 14th February 2008 from the Association confirming that no such action was being taken against any of the members manufacturing simil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24. Despite the fact that vide order dated 28th February 2008 passed by the Division Bench of this Court the goods seized were ordered to be released, the authorities did not deem fit to adjudicate the issue and decided once and for all as to whether the petitioner was liable to pay the excise duty @ 8% ad valorem or not but, instead, kept on issuing periodical show-cause notices to the petitioner for the goods cleared from April 2007 to May 2011 in addition to the show-cause notice dated 20th June 2007 issued for the period from June 2006 to March 2007. 25. It is the case of the petitioner that show-cause notices were issued to few of other manufacturers located in other States also for denying exemption of Notification No. 6/2006-C.E. on the same ground that the goods manufactured by them were made of Bagasse but they were in the nature of laminated particle boards, pre-laminated particle boards, MDF and HDF Bagasse boards and Bagasse boards with surface covered with melamine impregnated paper and were therefore covered under another Notification No. 4/2006-C.E. as amended. However, the Commissioner in charge of one of the largest manufactures of similar goods, namely, Bajaj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach of the show-cause notices. The respondent no. 2 held that the goods in question were particle board, though made of sugarcane Bagasse and classifiable under S.H. 44103210 and 44109090 of the Tariff, but were not chargeable to nil rate of duty because the petitioner had not discharged the burden to prove that the exemption of Notification No. 6/2006-C.E. was admissible and that Bagasse board was different from plain or pre-laminated particle or fiber board made from sugarcane Bagasse. Hence, this petition challenging the order O-I-O No. 01-09/Dem/Surat/2011, dated 21st December 2011 passed by respondent no. 2. II. Case of the Respondents 31. On notice being served upon the respondents, they have appeared and have opposed this petition by filing an affidavit-in-reply. In the affidavit-in-reply filed by respondent no. 3, a preliminary objection with regard to maintainability of the present petition has been raised, as according to the respondents, the impugned order is appealable before the Appellate Tribunal under Section 35B of the Central Excise Act, 1944. Such being the position, it is the case of the respondents that this petition could not be entertained and the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly availing Notification No. 6/2006-C.E., dated 1st March 2006 (Serial No. 82) instead of Notification No. 4/2006-C.E., dated 1st March 2006 (Serial No. 87), which is in contravention to Rule 11 and Rule 4 of the Central Excise Rules, 1944, separate show-cause notices for different period were issued. The said show-cause notices were adjudicated by the adjudicating Commissioner by following due process of law after giving opportunity of hearing to the petitioner and taking into consideration all relevant materials and evidence on record including manufacturing process. 36. According to the respondents, the petitioner is engaged in the manufacturing of excisable goods i.e. plain and pre-laminated particle boards falling under Chapter 4410. Plain particle board and pre-laminated particle board are goods which have distinct commercial identity and are known as such in common trade parlance. The petitioners, with a mala fide intention, have used the term Bagasse board instead of plain particle board and pre-laminated particle board to wrongly avail the benefit of exemption Notification No. 6/2006-C.E., dated 1st March 2006. The petitioner s contention regarding the product name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is bound by a decision of the Tribunal or Hon ble High Court or Hon ble Supreme Court but, in any case, not bound by a decision rendered by a Commissioner of any other state. It is also not correct to contend that except in the State of Gujarat in all other regions of the country Bagasse boards are permitted to be cleared at nil rate of duty by applying exemption Notification No. 6/2006-C.E. 40. In case of Bharat Pre-Lam Industries Limited, Commissioner of Central Excise, Bhopal, declined to extend exemption benefit of Notification No. 6/2006-C.E. and demanded duty with interest by applying Notification No. 4/2006-C.E. from the assessee manufacturing plain particle board and pre-laminated particle board falling under Chapter Heading No. 44103190 and 44103290 of the Central Excise Tariff Act, 1985. 41. According to the respondents, the petitioner is not entitled to any relief and the petition deserves to be dismissed. III. Legal Contentions on behalf of the Petitioner 42. Mr. P.M. Dave, learned counsel appearing for the petitioner vehemently submitted that under Article 226 of the Constitution of India, the High Court, having regard to the facts of the case, has a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the impugned order passed by the Commissioner, the goods are described as plain particle board and pre-laminated particle board made of sugarcane Bagasse. The raw-material is, thus, admittedly sugarcane Bagasse and other materials like synthetic resins and decorative paper are also used because sugarcane Bagasse being agro-waste could not be converted into Bagasse board without using any binder and, therefore, it is clarified under HSN also that particle board is normally agglomerated by means of an added organic binder, usually a thermosetting resin. According to Mr. Dave, use of resin is a must for producing a particle board, be it of wood chip or Bagasse or bamboo or cereal straw or flax or hemp shives. 45. Mr. Dave further submitted that it is not clearly stated anywhere in the order passed by the Commissioner nor in the affidavit-in-reply that the goods are not Bagasse board. The only observation in this regard in the order as well as in the affidavit-in-reply is that the product was plain or pre-laminated particle board made of sugarcane Bagasse. Even, when the first petition being Special Civil Application No. 3540 of 2008 was filed, an interim order dated 28th Febr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plain or Pre-laminated Particle Board . At para 2.1 of the order also, the goods are described as Bagasse Boards commonly known as Particle Boards. Thus goods manufactured by this manufacturer of the State of Maharashtra have also been absolutely similar to the goods of the petitioners herein, and the goods were described also by this manufacturer of Maharashtra as Plain and Pre-laminated Particle Boards made of sugarcane Bagasse. 49. Mr. Dave also submitted that the largest manufacturer of all i.e. Bajaj Eco-Tech Pvt. Ltd. of Uttar Pradesh has also described their goods as Bagasse based Particle Board, Bagasse Board MDF and HDF . In the order of the Commissioner of Central Excise, Lucknow, the goods are described as above, and detailed description of the goods in the order also shows that they were Bagasse Board Particle Board and Bagasse Board MDF and HDF , and the issue was Bagasse based Particle Board and Bagasse Board MDF and HDF were Bagasse Board within the meaning of Notification No. 6/2006 dated 1st March 2006. This detailed order also takes the same view that Bagasse based Particle Board and Bagasse based MDF and HDF were exempt under Notification No. 6/2006 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elsewhere are allowed such exemption, then there is a violation of Article 14 of the Constitution and also that of Article 19(1)(g) of the Constitution. Article 14 forbids discrimination among similarly situated citizens, and Article 19(1)(g) forbids unreasonable restriction on the fundamental right of doing business. Allowing exemption for Bagasse Board manufactured by citizens located in the States of Maharashtra, Uttar Pradesh and Hyderabad but not allowing the exemption to the petitioners located in Surat Commissionerate results in denial of the right to equality before the law for the petitioners and payment of excise duty for past period and also for current period violates the petitioner s fundamental right of Article 19(1)(g) also. These actions are without jurisdiction and therefore a citizen has a fundamental right to invoke Article 226 of the Constitution by filing a writ petition in this situation. 53. Mr. Dave contended that in view of the fact that manufacturers of similar product, namely, Bagasse Board, or Plain and Pre-laminated Particle Board of Sugarcane Bagasse are allowed exemption of Notification No. 6/2006, the action of the respondents in denying the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar goods in Bhopal Commissionerate is also incorrect and unjustified. The letters issued by various Chief Commissioners and the decisions taken by the committees of Chief Commissioners in allowing the exemption for similar goods and in not filing appeals against orders rendered in favour of manufacturers of Uttar Pradesh, Madhya Pradesh and Hyderabad are based on the clarification issued by the Government of India as well as C.B.E. C. that the benefit of Notification No. 6/06-C.E. would be available to Pre-laminated Bagasse Board; and thus the clarifications of the Board and the Government made in June 2007 and thereafter are countenanced and unreservedly followed by all excise authorities in the above referred States. The action of denying the same benefit to the petitioners on the ground that such decisions were not binding to another Commissioner in another State is also without jurisdiction because it smacks of unreasonable and arbitrary approach resulting in discrimination to the assessee in the State of Gujarat. 55. Mr. Dave also contended that under Section 35E(1) of the Central Excise Act, the Board has power to review orders passed by any Commissioner of Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el v. Union of India [1978 (2) E.L.T. 540 (Gujarat)] (v) Paper Products Limited v. Commissioner of Central Excise [1999 (112) E.L.T. 765 (S.C.)] (vi) Union of India v. Aravali Mining and Chem (India) Pvt. Ltd. [2000 (115) E.L.T. 279 (S.C.)] (vii) Whirlpool Corporation v. Registrar of Trade Marks [(1998) 8 SCC 1] IV. Legal Contentions on behalf of the Respondents 59. Mr. R.J. Oza, learned senior counsel appearing for the Revenue vehemently contended that this petition may not be entertained as the impugned order under challenge is appealable under Section 35G of the Act before the Appellate Tribunal. Mr. Oza vehemently contended that there is one more reason as to why this petition should not be entertained. According to Mr. Oza, against the order passed by the Appellate Tribunal under Section 35G of the Act even an appeal before this Court would not lie and an appeal would directly lie before the Supreme Court. This is suggestive of the fact that the Legislature has thought fit not to provide for appeal before the High Court against the order passed by the Appellate Tribunal, and if such is the position, then no writ petition under Article 226 of the Constitution of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Board to the Chief Commissioner of Patna, the clarification made thereunder was not binding to the Central Excise officers. Mr. Oza, during the course of his submissions, relied upon specimen orders issued by the Board under Section 37B of the Act to substantiate that a reference to Section 37B of the Act is always made in the order passed by the Board if it was under that section and only such order passed under Section 37B of the Act was binding to the Central Excise officers but, in any event, clarifications issued by way of letters addressed to one or the other Central Excise Commissioners were not binding. Mr. Oza lastly submitted that the contentions of the petitioner on the point of discrimination can be canvassed before the CESTAT who would be in a better position to examine the facts of the case, nature of the case and issue of admissibility of Notification. Mr. Oza, therefore, urged that this petition deserves to be rejected. 62. In support of the aforesaid contentions, Mr. Oza, learned senior counsel relied on the following case-laws : (i) Commissioner of Central Excise v. JBP Industries Limited [2011 (264) E.L.T. 162 (Gujarat)] (ii) Commissioner of Customs, B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remedy is available, the High Court would not normally exercise its jurisdiction under Article 226 of the Constitution of India. But again, this rule of exclusion of writ jurisdiction on account of availability of an alternative remedy does not operate as an absolute bar to entertain a writ petition but is a rule of discretion to be exercised depending on the facts of each case. On this aspect, the following observations by the Constitution Bench of the Supreme Court in A.V. Venkateswaran, Collector of Customs v. Ramchand Sobhraj Wadhwani and Another, reported in AIR 1961 SC 1507 = 1983 (13) E.L.T. 1327 (S.C.), which still holds the field, are quite apposite : The passages in the judgment of this Court we have extracted would indicate (1) that the two exceptions which the learned Solicitor General formulated to the normal rule as to the effect of the existence of an adequate alternative remedy were by no means exhaustive, and (2) that even beyond them a discretion vested in the High Court to have entertained the petition and granted the petitioner relief notwithstanding the existence of an alternative remedy. We need only add that the broad lines of the general principles on whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduct the petitioner in this particular State is being asked to pay duty of 8% ad valorem. It is for this reason that we are of the view that this writ petition seeks enforcement of fundamental right to carry on trade or business without any discrimination of any nature. The present petition is not the one in which the controversy centres around the issues which are primarily questions of fact. 69. In Union of India v. T.R. Varma, reported in AIR 1957 SC 882, the Supreme Court held that it is well-settled that when an alternative and equally efficacious remedy is open to litigant, he should be required to pursue that remedy and not invoke the special jurisdiction of the High Court to issue a prerogative writ. The Bench proceeded further to observe that it will be a sound exercise of discretion to refuse to interfere in a petition under Article 226 of the Constitution of India unless there are good grounds to do otherwise. 70. We hold that there are good grounds in the present case so as to entertain this petition despite the fact that there is a remedy of appeal available under Section 35G of the Act. 71. We shall now look into the case-law relied upon by both the sides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow look into the case-law relied upon by the Revenue on the point of alternative remedy 74. In Union of India v. Guwahati Carbon Limited (supra), the Supreme Court, in the facts of the case, made the following observations : We reiterate that the High Court, under Article 226 of the Constitution of India, has vast powers as this Court has under Article 32 of the Constitution of India, but such powers can only be exercised in those cases where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are replaced, or when an order has been passed in total violation of the principles of natural justice. In our opinion, the assessee ought not to have filed a writ petition before the High Court questioning the correctness or otherwise of the orders passed by the Tribunal. The Excise Law is a complete code in order to seek redress in excise matters and hence may not be appropriate for the writ court to entertain a petition under Article 226 of the Constitution. Therefore, the learned Single Judge was justified in observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment and order under challenge deserves to be set aside. We, accordingly, set aside the judgment and order under appeal. The appeal is allowed. There shall be no order as to costs. However, it would be open to the insurer to file an appeal if it is permissible under the law. 78. In the aforesaid decision of the Supreme Court, the contention before the Bench was that under Section 173 of the Motor Vehicles Act, 1988 a remedy by way of appeal to the High Court was available to the insurer against an award given by the Tribunal and, therefore, the filing of a petition under Article 227 of the Constitution of India was misconceived. While accepting the contention of the appellant, the Bench observed that under Section 173 of the Motor Vehicles Act the insurer has a right to file an appeal before the High Court on limited grounds available under Section 149(2) of the Act, and where the law provides remedy by filing an appeal on limited grounds, the grounds of challenge cannot be enlarged by filing a petition under Article 226/227 of the Constitution of India on the premises that the insurer has limited grounds available for challenging the award given by the Tribunal. It is un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petition is accordingly dismissed. No costs. 83. This judgment would also not help the Revenue as in the facts of the case the Supreme Court took the view that petitioner should pursue the remedy of appeal before the Tribunal. As a matter of fact, no facts have been discussed in the judgment, more particularly, as to what was the actual issue involved. 84. In Union of India v. Zalcon Electronics (supra), the Supreme Court in a very short order made the following observations : In our view, writ petition was not maintainable before the High Court. The facts required detailed adjudication. Adjudication was done by the competent authority. Assessee did not carry the matter in appeal to the Commissioner. Assessee straightway proceeded with the writ petition which was allowed by the High Court. In the facts of this case, the approach of the High Court was wrong. The High Court should not have interfered with the order. It should have directed the assessee to exhaust the statutory remedy. 85. It appears that the facts in the said case required some detailed adjudication and in the facts of the case, the Supreme Court held that the approach of the High Court was wrong. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder these two headings are allowed concessional/reduced rate of duty at Serial No. 87 of table to this Notification No. 4/2006. Bagasse Board are also goods covered under Heading No. 4410 and therefore they may also qualify for concessional rate of duty under this Notification, but a manufacturer manufacturing Bagasse Board cannot be denied nil rate of duty specifically provided by the Central Government for Bagasse Board under another Notification i.e. 6/2006. 91. It is a matter of choice of the manufacturer to opt for a particular exemption Notification and therefore, as is also held by the Commissioner of Central Excise, Lucknow in case of Bajaj Eco Tech Product Pvt. Ltd., an assessee cannot be compelled to pay duty on the clearance of Bagasse Board under Notification No. 4/2006 because the assessee was well within their right to avail exemption under Notification No. 6/2006. 92. Heading 4410 covers different varieties of particle board and similar board, which may be manufactured out of wood or out of other ligneous materials like Bagasse, Bamboo, Cereal Straw etc. as explained under Heading 4410 of HSN. Similarly, Heading 4411 also covers various varieties of boards l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try No. 87 of Notification No. 4/2006, but this finding is perverse because the above description has been deleted by the Central Government by substituting an expression all goods , and therefore the Commissioner had no jurisdiction to still decide the case against the petitioners relying on an expression in the Notification which has already been deleted and substituted by the Central Government, more so when the deletion and substitution were for making it abundantly clear that Notification No. 4/2006 was for all goods of Heading 4410 or 4411 whereas the Notification No. 6/2006 was for some of the specific varieties of such boards including Bagasse board. The Commissioner, Surat has thus acted illegally and without jurisdiction in relying on already deleted and substituted expression of the Notification whereas it is very clear from a plain reading of Notification No. 6/2006 that it prescribes nil rate of duty for Bagasse Board and the petitioners goods admittedly being Bagasse Board, this exemption could not have been denied. 95. Learned counsel for the petitioners, during the course of submissions, very strenuously submitted that the respondents have not placed on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sibility of benefit of Notification No. 6/2006 could not be termed or construed as an order issued under Section 37B and, therefore, such letters were not binding to the Commissioner, Surat who was within his jurisdiction to take an independent view of the matter. 98. We are afraid, we are unable to accept the submission of Mr. Oza on this count. First, any clarification issued by the Board, in our view, is binding to the Central Excise Officers who are duty-bound to observe and follow such circulars. Whether Section 37B is referred to in such circular or not is not relevant. In this regard, we may profitably quote observations made by the Supreme Court in the case of Ranadey Micronutrients v. Collector of Central Excise, reported in 1996 (87) E.L.T. 19 (S.C.), wherein a circular which was in favour of the assessee issued by the Board was sought to be repudiated by the Central Excise Department on the ground that it was only letter and not an order issued under Section 37B. 99. Repelling the contention, the Apex Court observed in paragraph 13 of the judgment as under : There can be no doubt whatsoever, in the circumstances, that the earlier and later circulars were issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the clarifications were only letters and not orders under Section 37B. Therefore, in our view, the action on the part of the respondents in denying the benefit of Notification No. 6/2006 being contrary to the Board s Circulars can be termed as without jurisdiction. 105. Mr. Dave is quite justified in submitting that the Central Excise is a central levy and, therefore, such a levy has to be collected uniformly from all similarly situated manufacturers located all throughout the country. If Excise authority of a particular Commissionerate or State refuses to allow benefit of exemption to manufacturers located in that Commissionerate or State but other manufacturers located elsewhere are allowed such exemption, then the same would be in violation of Article 14 of the Constitution of India and also of Article 19(1)(g) of the Constitution of India. We may, at this stage, profitably quote judgment delivered by this High Court in the case of Ralli Engine Ltd. (supra), reported in 2004 (62) RLT 607 (Guj.) The petition contains challenge to the discriminatory treatment being given by the Commissionerates in three different States, i.e., Gujarat, Maharashtra and Tamil Nadu in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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