MUNAK CHEMICALS LIMITED Vs. COLLECTOR CENTRAL EXCISE

JUDGEMENT

(1.) In Civil Misc. application, prayer made is for dismissing the writ petition as being not maintainable because the petitioner has not exhausted the remedy under the Central Excise and Customs Act. Reply to the application has been filed by the writ petitioner. It has been submitted in the reply that notice under challenge being without jurisdiction, the appeal is not an efficacious remedy.

(2.) Vide notice dated 3.1.1990, Additional Collector called upon the petitioner to show cause within 30 days of the receipt of the notice as to why the Central Excise duty amounting to Rs. 42,674.28 not paid on steel structure manufactured in the factory premises be not recovered from it under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11-A the Central Excise and Salt Act, 1944 on the ground of suppression of facts and contravention of Central Excise-Rules. Petitioner was also called upon to show cause as to why penalty should not be imposed under Rule 9(2) read with Rule 173-Q ibid for the contravention of the rules.

(3.) Petitioner instead of submitting reply to the show cause notice filed the present writ petition on the ground that the company is not engaged in the manufacture of steel structure. According to the petitioner, it had awarded contracts for fabrication or erection of sheds etc. Petitioner contended that the contractor fabricated the structure as per the drawing of the company under the supervision at the site and the inspection was carried out by the Company's Site Engineer. As per petitioner's case, no part or item was produced or manufactured except the sheds fabricated and erected at site by the contractor. The question thus, involved in the writ petition is whether petitioner had manufactured steel structures or it is a case of fabrication. In my view, this question being a disputed question of fact, the writ petition is not a proper remedy. Moreover, petitioner has come to this Court at a stage when only a show-cause notice has been issued to it. Petitioner ought to have given reply to the show cause notice and in case the same is decided against it, it has a right to file an appeal before the Commissioner, Central Excise. In Titaghur Paper Mills Co. Ltd. v. State of Orissa, A.I.R. 1983 S.C. 603 and State of Goa v. Leukoplast v. India Limited, A.I.R. 1997 S.C. 1875, their Lordships of the Supreme Court have opined that when the Act provides for a complete machinery to challenge an order of assessment, the same can be challenged only by the mode prescribed by the Act and not by a petition under Article 226 of the Constitution of India. Accordingly, prayer made in the application is allowed and the writ petition is dismissed being pre-mature. Since the period specified for giving reply to the show cause notice has expired, petitioner, if so advised, may file reply within 45 days from today and on receipt of the reply, the Additional Collector, Central Excise, shall decide the matter on merits after passing a speaking order.