Primetal Technologies INDIA PVT. LTD. vs. Union Of INDIA And Ors

Held

The Court held that the writ petitions were not maintainable. On the first issue, the Court found that the petitioners had not satisfied any of the contingencies laid down by the Supreme Court in Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai, where the writ jurisdiction can be invoked despite an alternative remedy. The Court reiterated that resort to Article 226 is not intended as an alternate remedy for relief obtainable by way of a statutory appeal. Regarding the second issue, the Court held that the condition of pre-depositing 7.5% of the penalty is not exorbitant or onerous. Citing the Supreme Court's decision in Newtech Promoters and Developers Pvt.Ltd. vs. State of UP and others, the Court stated that the legislature can impose conditions for the exercise of a right of appeal, provided they are not unreasonably restrictive. The Court also referred to a previous decision of the Bombay High Court in Kim Steel Strips Pvt. Ltd. & anr. vs. The Commissioner of Central Excise and Customs, Belapur Commissionerate, which held that a 7.5% pre-deposit is not exorbitant and financial inability to deposit cannot be an exceptional circumstance to invoke writ jurisdiction or waive pre-deposit. The Court explicitly stated that it had not expressed any opinion on the merits of the rival contentions.

Facts

The petitioners, Concast India Ltd. and Primetal Technologies India Private Limited, filed writ petitions before the Bombay High Court challenging an Order-in-Original dated June 16, 2021, passed by the Joint Commissioner of CGST and Central Excise, Thane. The challenge was primarily against the condition of pre-depositing 7.5% of the penalty imposed, which the petitioners argued was onerous and beyond jurisdiction, preventing them from filing an appeal under Section 35F of the Central Excise Act, 1944. The impugned order confirmed duty demands, ordered confiscation, and imposed penalties and interest on the petitioners and M/s. Mathbros Engineering Pvt. Ltd. (MEPL) for alleged contravention of various provisions related to valuation and clearance of excisable goods manufactured on a job work basis. The dispute arose from allegations that MEPL, while manufacturing goods for the petitioners using self-procured and petitioner-supplied inputs, cleared goods at a lower value than the commercial invoices issued to ultimate customers, thereby evading excise duty.

Key Issues

1. Whether the writ petitions are maintainable under Article 226 of the Constitution of India, despite the availability of an alternative statutory remedy of appeal under Section 35F of the Central Excise Act, 1944? (Question of law) 2. Whether the condition of pre-depositing 7.5% of the penalty imposed by the impugned order is onerous and without jurisdiction, thereby rendering the appellate remedy inefficacious? (Question of mixed law and fact) Petitioner's arguments: The petitioners contended that the requirement to pre-deposit 7.5% of the penalty, which amounted to a significant sum (in excess of Rs.1 crore), was an onerous condition that effectively barred them from availing the statutory appeal remedy. They argued that this imposition was without jurisdiction and made the appellate remedy inefficacious. They relied on grounds (A) and (B) of their writ petitions, suggesting the penalty could not exceed the due liability. Respondents' arguments: The respondents raised a preliminary objection, arguing that an efficacious statutory remedy of appeal was available to the petitioners before the Commissioner (Appeals) and therefore, the writ petitions should not be entertained. They submitted that the remedy of appeal is the appropriate forum for addressing grievances against the adjudication order.