Miracles Sands And Chemicals vs. The Commissioner Of CGST And Central Excise

Facts

The appellant, M/s. Miracles Sands & Chemicals, challenged an order dated March 15, 2018, passed by the Commissioner of CGST & Central Excise, imposing excise duty on goods manufactured by the appellant. The appellant contended that they merely mixed imported titanium ore, a mechanical process, and no chemical treatment or special manufacturing process was involved. They also stated that their HT power supply was cut off from September 14, 1999, and the final product retained the same form and properties as the imported ore, thus not being excisable. The Writ Court dismissed the appellant's writ petition, holding that the issue involved factual determination and that the appellant had not exhausted their statutory appellate remedies. This Writ Appeal was filed against the Writ Court's order.

Held

The High Court, in its judgment, upheld the decision of the learned Writ Court. The Court noted that the appellant had not exhausted the alternative remedies available to them under the statute, which included filing an appeal before the appellate authority or approaching the Advance Ruling Authority. Citing the Supreme Court judgment in Thansingh Nathmal Vs. Superintendent of Taxes, the Court found no fault with the Writ Court's decision to reject the writ petition on the ground of non-exhaustion of alternative remedies. Consequently, the High Court was not inclined to entertain the Writ Appeal. The dismissal of the appeal, however, was made subject to the condition that the appellant could still prefer an appeal before the appellate authority within three weeks from the date of receiving a copy of the order. If the appellant failed to do so, the respondent/Revenue would be at liberty to execute the order that was impugned before the Writ Court. No order as to costs was made.

Key Issues

1. Whether the Writ Court was justified in dismissing the writ petition on the ground of non-exhaustion of alternative remedies, despite the appellant raising a question of law regarding the excisability of goods supplied to a 100% Export Oriented Unit (EOU)? (Question of law) Petitioner's arguments: The appellant argued that while some issues might be factual, at least one question raised was purely a question of law concerning the exemption of goods supplied to a 100% EOU. They contended that the respondent/Revenue had accepted this principle but refused to grant the exemption, making it a matter that the Writ Court should have entertained. Therefore, the impugned order was liable to be interfered with on this ground alone. Revenue's arguments: The respondent/Revenue argued that the issue involved questions of both fact and law. When such a situation arises and statutory appeal remedies are available, the appellant must pursue those remedies. They further contended that the very question of whether the appellant's process constituted excisable manufacturing was a factual matter, and without exhausting available remedies, the appellant's approach to the Writ Court was rightly rejected.