SANGHI SPINNERS LIMITED Vs. COMMISSIONER OF C EX

JUDGEMENT

(1.) THE Writ Petitioner, a Company registered under the Companies Act, placed in a peculiar position of denial of jurisdiction both by the appellate authority under Section 35b and by the revisional authority under Section 35ee of the Central Excise Act, 1944 (hereinafter referred to 'the Act'), approached this Court, initially praying for the issue of writ of mandamus declaring the Order No. 125/99 (H. III), dated 6-12-1999 of the Commissioner of Customs and Central Excise (Appeals) Hyderabad, [hereinafter referred to 'the Commissioner (Appeals)'], confirming the duty demanded in respect of seven AR4s mentioned in its order and also imposing the penalty of Rs. 2,000 as illegal, arbitrary and unconstitutional. Later with the permission of this Court, the relief sought for was amended praying for the issue of Certiorari and to quash the order of Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to 'the CEGAT' or 'the Appellate Tribunal'), South Zone Bench at Chennai in Final Order No. 1163/2000, dated 16-8-2000 as illegal and arbitrary.

(2.) THE brief facts leading to filing of this writ petition are as under :the Petitioner Company is a 100% Export Oriented Unit (for short 'eou'), engaged in the manufacture of cotton yarn and blended yarns. The manufactured goods by the EOU are to be exported without payment of duty and a certain percentage of the goods manufactured by the EOU, as fixed by the Government from time to time, are allowed to be sold in the domestic tariff area on payment of appropriate duty of excise. The Petitioner Company during the period August, 1996 to March, 1997 has cleared certain goods from their factory for export under a bond. As the petitioner has not furnished the number of shipping particulars for the AR4s, specified by the Assistant Commissioner of Central Excise, a show cause notice was issued proposing to levy basic excise duty, additional excise duty as well as penalty. The Petitioner Company produced certain AR4s, but failed to produce 11 AR4s and therefore, the Assistant Commissioner of Central Excise by his proceedings dated 30-6-1998 passed orders demanding a duty of Rs. 31,45,757. 79 and also imposed a penalty of Rs. 2,000/ -. Aggrieved by the said order of adjudication, the Petitioner Company filed an appeal before the Commissioner (Appeals ). The Commissioner (Appeals) remanded the matter in respect of four AR4s, but insofar as seven AR4s are concerned, the Commissioner (Appeals) confirmed the order of demand of duty, observing that the Petitioner Company failed to submit copies of AR4s showing proof of export of the goods. Against the said order, the petitioner carried the matter in further appeal before the Appellate Tribunal. The Appellate Tribunal on a preliminary issue held that the appeal is not maintainable in terms of the proviso to Section 35b (1), as according to the Appellate Tribunal the dispute relates to the goods exported outside India without payment of duty, therefore, the Tribunal has no jurisdiction. Thereafter the petitioner preferred a revision to the Central Government, as provided under Section 35ee. The revisional authority also, after going into the contentions of the Petitioner, found that the revisional authority has no jurisdiction, as the goods cleared were not exported by the Petitioner Company out were sold to various advance licence holders within the country and according to the revisional authority only the Appellate Tribunal has got jurisdiction to decide the issue. Placed in this peculiar situation, the Petitioner Company is before this Court.

(3.) THE learned Counsel for the Petitioner contended that though the goods have been cleared under AR4s, which were intended for exports, but in fact they were cleared for sales to the advance licence holders within the country. Therefore, those clearances could not be considered as exports. The learned Counsel contended that, as there were no separate forms for such clearance to effect the sales to the advance licence holders, the Department has used the same AR4s. Therefore, there was no justification for the Department as well as for the Appellate Tribunal to treat the goods in question as exports. The learned Counsel also contended, relying upon the grounds of the appeal before the Commissioner (Appeals), that though the Petitioner Company had contended that the clearances were for sales within the country to the advance licence holders, which are treated as deemed exports, the Commissioner (Appeals) did not consider the claim of the Petitioner. Therefore, there was absolute failure on the part of the first appellate authority, the Commissioner (Appeals), to adjudicate the issue raised by the Petitioner Company, which had resulted in the denial of both the remedies of appeal as well as revision before the Appellate Tribunal and the Central Government respectively to the Petitioner. Under the above circumstances, the learned Counsel sought for either to remit the matter to the Commissioner (Appeals) so as to consider and decide the issue whether there were, in fact, sales within the country to the advance licence holders, which could be treated as deemed exports, which would decide the jurisdiction of either the appellate or the revisional authority to adjudicate the issue, after the same is decided by the first appellate authority, the Commissioner (Appeals ). The learned Counsel alternatively contended that the revisional authority gave a categorical finding that the sales were affected within India to the advance licence holders. Therefore, an appeal lies to the Appellate Tribunal. Hence, the appellate authority may be directed to restore the appeal and decide the same on merits.