TMI Blog2017 (3) TMI 1931X X X X Extracts X X X X X X X X Extracts X X X X ..... cretion 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. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s throughout the country and during the process of sending the tyres a number of discounts are allowed by the petitioner at the depot level as turnover discount, prompt payment discount, taxes octroi absorbed, slab discount, growth discount / special incentive discount, exclusive discount, fleet discount, product discount, test discount etc. Learned senior counsel submits that petitioner has been clearing the goods on provisional assessment basis for last about 20 years and the petitioner s company for permitting the clearance on provisional assessment basis had always been acceded to by the respondents. He further submits that even for the Assessment Year 2015-16, the respondent No. 2 has allowed the petitioner to clear the goods on provisional basis. The learned senior counsel submits that after the final assessment is made by the respondents whatever the final duty is payable by the petitioner is always paid in accordance with the act and rules and there is no breach or violation of the same at any point of time. The petitioner company made a request vide its letter dated 4.3.2016 seeking the permission to clear goods on provisional assessment basis in accordance with Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s section shall be in the prescribed form and shall be verified in the prescribed manner. We have heard learned counsel for the parties at length. In order to appreciate the controversy, we deem it appropriate to reproduce Rule 7 of the Central Excise Rule 2002 as under:- Rule 7. Where the excisable goods are not sold by the assessee at the time and place of removal but are transferred to a depot, premises of a consignment agent or any other place of premises (hereinafter referred to as such other place ) from where the excisable goods are to be sold after their clearance from the place of removal and where the assessee and the buyer of the said goods are not related and the price is the sole consideration for the sale, the value shall be the normal transaction value of such goods sold from such other place at or about the same time and, where such goods are not sold at or about the same time, at the time nearest to the time of removal of goods under assessment. The above said rule has been considered by the learned Assistant Commissioner and while dealing the issue it has been held that the petitioner is under an obligation to pay Central Excise of the invoice on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction value, in respect of the goods to the depots and sold subsequently there from. The relevant portion of Section 4(1) of Central Excise Act, 1944 is as under : (I) Where under this act the duty of excise is chargeable on any excisable goods with reference to their value, then on each removal of the goods, such value shall (a) In a case where the goods are sold by the assessee for delivery at the time and place of removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value; (b) In any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed; Section 4(3) (d) of CEA 1944 defines transaction value means the price actually paid or payable for the goods when sold and includes any amount that the buyer is liable to pay in connection with the sale whether payable at the time of sale or at any other time . 12. I find that the assessee claims discounts which are partly given at the time of sale of goods from their depots to the buyers which are mentioned in the invoices issued and the remaining discount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are dependent on the performance of the dealers in future, whereas, as per the definition of the Transaction Value given in Section 4 of Central Excise Act, 1944 the same means the price actually paid or payable for the goods when sold and in this case when the goods are sold the price payable is higher than the value on which the assessee is paying the duty after deducting various discounts, the fate of which is decided later on. 15. I also observe that the assessee has referred various judgments of the Apex Court and Tribunals wherein the courts have held that such after sale discounts is permissible. In this regard I find that the case laws cited by the assessee are not helpful to them as they are differentiated on the grounds that the assessee is well known to the discounts and may claim on the basis of the value of similar excisable goods sold from the depots at the time of clearance from their factory, therefore, the assessee is required to clear the same on such value and has to pay duty accordingly. 16. I also find that the assessee has submitted that SAP system can only view the transactions that have taken place at different locations but the system cannot forec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case. The paras 7, 14 and 24-27 are reproduced as under: 7. The petitioner company by its letter dated July 31, 2014 applied to the respondent No. 1 for permission to clear the manufactured goods on the basis of provisional assessment for the period of August 1, 2014 to November 30, 2014. A similar application was made by the petitioner company by its letter dated December 2, 2014 for the period of December 1, 2014 to March 31, 2015. These applications of the petitioner company have not been responded to by the respondent No. 1. As a result, the petitioner company is being forced to clear the goods manufactured by it on final assessment basis without taking into account the trade discounts mad available by it to its customers, thereby ending up paying excess central excise duty than what is actually payable under the 1944 Act. 14. Appearing on behalf of the department, Ld. Counsel submitted that the requirements of Rule 7 of the 2002 Rules are not satisfied in the instant case and, a such, the petitioners cannot claim clearance of the goods on the basis of provisional assessment. He further submitted that the writ petitioners have approached this court one year after th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a period of eight week from the date of presentation of the copy of the certified copy of this order without being influenced by any of the observations made in this order or passed by the learned Single Judge. The learned senior counsel has relied upon the judgment reported in Union of India Ors. Vs. Bombay Tyres International (P) LTD.; (2005) 3 SCC 787 which reads as under:- 3. As a result of further arguments in regard to certain specific matters on which our judgment dated 7.10.1983 was not specific we pass the following: (1) Trade discounts.- Discounts allowed in the trade (by whatever name such discount is described) should be allowed to be deducted from the sale price having regard to the nature of the goods, if established under agreements or under terms of sale or by established practice, the allowance and the nature of the discount being known at or prior to the removal of the goods. Such trade discounts shall not be disallowed only because they are not payable at the time of each invoice or deducted from the invoice price. (2) Taxes.- Additional sales tax, surcharge on sales tax and turnover tax should be allowed to be deducted from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rring Credit Scheme, this deduction is liable to be allowed. He found that in the ultimate analysis the dealer pays one percent less then the catalogue price and that the said claim is also consistent with the clarificatory order of this court in Bombay Tyre International. 50. The learned Additional Solicitor General, however, contended that this discount, not being known or paid at the time of removal/sale, cannot be allowed. 51. In the light of the findings recorded by the Assistant Collector, it must be held that this is a discount which is known and understood at the time of removal of the goods though it is quantified later. The Assistant Collector has also recorded a finding, I also find that such system of grant of discount is not uncommon in the trade . Keeping in view the clarificatory Order of this Court in Bombay Tyre International, this claim must be held to have been rightly allowed by the Assistant Collector. Year Ending Discount and Prompt Payment Discount: 52. What is called 'Year-ending discount' is really a bonus given by Madras Rubber Factory to its dealers @ Rupees fifty per tyre in respect of a particular type of tyres. This discoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -country non-RCS dealers (except, of course, the government and DGS D accounts). The discount is @ 0.75% on the total value of the invoice including sales tax, surcharge etc. provided the bill is cleared/paid within 26 days from the date of invoice. The case of the Union of India is that this discount is limited only to certain varieties of products as explained in the scheme document and is valid only for a limited period. The Assistant Collector, however, dealt with this discount along with the year ending discount and allowed it on the same reasoning as is applicable to the year ending discount. He further relied upon the judgment delivered in Purolator India Limited Vs. Commissioner of Central Excise, Delhi-III; (2015) 10 SCC 715 which reads as under:- 15. Post-1973, this Court has in two of its decisions, namely, in Union of India v. Bombay Tyres International (P) Ltd. clearly held as follows: (SCC p. 788, para 3) (1) Trade discounts- Discounts allowed in the Trade (by whatever name such discount is described) should be allowed to be deducted from the sale price having regard to the nature of the goods, if established under agreements or under terms of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the respectful opinion that the said reasoning cannot be accepted in view of the clear finding recorded by the Assistant Collector that this system of discount is prevalent in the industry and is known and understood at the time of removal of particular goods, though the amount is quantified later. In view of the said finding and in the light of the clarificatory order in Bombay Tyres International, we hold that this claim has been rightly allowed by the Assistant Collector. 54. So far as the prompt payment discount is concerned, it is payable under a scheme called prompt payment discount scheme which is applicable only to up-country non-RCS dealers (except, of course, the Government and DGS D accounts). The discount is @ 0.75% on the total value of the invoice including sales tax, surcharge, etc. provided the bill is cleared/paid within 26 days from the date of invoice. The case of the Union of India is that this discount is limited only to certain varieties of products as explained in the scheme document and is valid only for a limited period. The Assistant Collector, however, dealt with this discount along with the year ending discount and allowed it on the same reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scount to the department and make a request for provisional assessment. Learned counsel further submits that the circular of the department is binding on the respondent authorities. To buttress his arguments he has also relied upon the judgment delivered in CIT Kochi Vs. Trans Asian Shipping Services Private Ltd. delivered in (2016) 8 SCC 604. In view of the judgments and notification, the learned senior counsel submits that the petitioner company is entitled for provisional assessment to be permitted by the respondent department and whatever be final outcome of the final assessment, they are ready and willing to deposit the differential duty along with interest as demanded by the respondent department. He submits that in case the duty is paid in excess, the same will be refunded to the petitioner company or adjusted in the future demands and therefore, there will be no loss of revenue or the revenue will not be at any disadvantageous position. In this view of the matter, the rejection of the demand for the provisional assessment by totally non-speaking and unreasoned order is absolutely arbitrary and illegal. The learned counsel further submits that since the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evitably come up for consideration before the Court even in such cases would be as to what extent the jurisdiction has to be exercised. 81. Should the courts determine on merits of the case or should they preferably answer the preliminary issue or jurisdictional issue arising in the facts of the case and remit the matter for consideration on merits by the competent authority? Again, it is somewhat difficult to state with absolute clarity any principle governing such exercise of jurisdiction. It always will depend upon the facts of a given case. We are of the considered view that interest of administration of justice shall be better subserved if the cases of the present kind are heard by the courts only where they involve primary questions of jurisdiction or the matters which go to the very root of jurisdiction and where the authorities have acted beyond the provisions of the Act. However, it should only be for the specialised tribunal or the appellate authorities to examine the merits of assessment or even the factual matrix of the case. 82. It is argued and to some extent correctly that the High Court should not decline to exercise its jurisdiction merely for the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, we are not inclined 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. That on the same subject the appeals before the commissioner (Appeals) arising out of the order of review are pending consideration for the assessment year 2015-2016 and the petitioner company is also contesting the same. Therefore, any decision on merits by this court will render the appeals pending before the Commissioner Appeals otiose and of no consequence. In some what similar situation, the Hon ble Supreme Court in the case reported in AIR 2016 SC 4995 Satya Pal Anand Vs. State of M.P. Ors. has held as under; In exercise of writ jurisdiction, the High Court cannot be oblivious to the conduct of the party invoking that remedy. The fact that the party may have several remedies for the same cause of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at par or alike other statutory remedies. A prominent self-imposed restriction in exercise the discretion given under Article 226 of the Constitution is the principle of exhausting all other statutory remedies before approaching writ court. It is a rule of convenience and discretion and does not oust the jurisdiction of a writ court, but indicates a caution in exercising extraordinary constitutional authority. The deviation from this principle is permissible if the relief is sought with well founded allegation of violation of fundamental rights, if the right has been or being threatened to be infringed by a law which itself is ultra-vires, if there is a complete lack of jurisdiction in the officer or the authority issuing impugned order or action, if there is flagrant violation of principles of natural justice, if the 08-03- 2017 prevention of public injury and vindication of public justice requires the extraordinary recourse and if the court is satisfied that the remedy available is not efficacious enough to protect the injury caused or may be caused. This principle applies with more vigour, if a party is seeking a writ in the nature of certiorari to get an order passed by judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... availability of alternative remedy may also be ignored, if the inferior court or Tribunal of first instance acts wholly without jurisdiction or patently in excess of jurisdiction or manifestly conducts the proceedings of a writ in the manner that that is contrary to the rules of natural justice. Therefore, we are of the view that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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