By TIOL News Service

HYDERABAD, DEC 07, 2016: THE Petitioner filed a Writ Petition under Article 226 of the Constitution of India, challenging the Order in Original passed by the Additional Commissioner holding that freight and insurance amount pertaining to the goods cleared by the Assessee should be included in the assessable value of the goods and that the petitioner was liable to pay excess duty together with interest and penalty. It is the contention of the Petitioner that the Adjudicating Authority failed to record any findings on their specific plea to extend cum-duty benefit in spite of a specific plea made by them in reply to the Show Cause Notice.

After hearing both sides, the High Court held:

+ Under normal circumstances, the assessee is obliged only to go before the Appellate Authority under Section 35(1) of the Central Excise Act, 1944. The order under challenge is an order against which a statutory appeal is available. Therefore, generally we would have refrain from entertaining the writ petition on the ground of availability of statutory alternative remedy.

+ But the case on hand stands on a unique footing. This is a case where the petitioner has paid an amount of Rs.10,82,682/- as against a duty demand of Rs.11,94,200/-. In other words, the petitioner has not come to this Court bypassing the alternative remedy of appeal, for the purpose of avoiding the pre-deposit condition.

+ In response to the show cause notice, the petitioner appears to have made a specific request with respect to the aspect of cum-duty benefit. That the petitioner made such a request is born out even from the Order-in-Original, which is impugned in the present writ petition. In paragraph XV of the Order-in-Original the adjudicating authority herself has recorded the following: “Even assuming that duty is liable to be paid on the transportation charges, they are eligible for cum-tax benefit as they had not collected the duty from the buyers on the freight charges. In view of the above, they requested to drop further proceedings and an opportunity of personal hearing."

+ But unfortunately, there has been no discussion nor any finding recorded. Since the requirement under Explanation to Section 4(1) is statutory, the adjudicating authority appears to have failed to comply with this requirement, forcing the Court to interfere with the Order-in-Original.

+ Though it is true that the adjudicating authority may not have a power of review as available to Civil Courts, the fact remains that the petitioner is not aggrieved by the mere absence of a power of review. The petitioner is aggrieved by the failure of the adjudicating authority to consider his objections to the show cause notice and to record a finding. Therefore, there is no need to go into the question as to whether the matter should have been reviewed or not. The writ petition is allowed, the impugned order of the Additional Commissioner is set aside, directing the respondents to consider only the aspect relating to Explanation under Section 4(1) of the Central Excise Act, 1944 and to pass a fresh order after giving an opportunity of hearing as well as an opportunity to produce documentary evidence to the petitioner.

(See 2016-TIOL-2932-HC-AP-CX)