1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.6500 OF 2008 M/s Johnson & Johnson Ltd., Aurangabad, Through its Authorised Signatory ..PETITIONERS VERSUS The Union of India & anr. ..RESPONDENTS Mr Rohan Shah, Advocate holding for Mr S.P. Deshmukh for the petitioners; Mr Alok Sharma, Asstt. Solicitor General for respondents. CORAM : P. V. HARDAS AND R. K. DESHPANDE, JJ. (Date of reserving the order :25.6.2009 Date of pronouncing the order : 7.7.2009) 2 ORDER (PER P.V. HARDAS, J.) This is a petition under Article 226 of the Constitution of India by which the petitioners have prayed for the following reliefs :- “(i) this Hon’ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari, or any other appropriate writ, order or direction, calling for the records and proceedings of the case, and after going into the legality, validity and propriety thereof, to quash and set aside the show cause notice dated 1 st May, 2008 (Exhibit - “P” hereto); (ii) that this Hon’ble Court be pleased to issue a writ of prohibition, or any other appropriate writ, order or direction, prohibiting Respondent No.2 from taking any action in furtherance of the said show cause notice dated 1.5.2008 (Exhibit-”P” hereto) (iii) that pending the hearing and final disposal of the writ petition, the Respondents by themselves, their servants and agents be restrained by an order and injunction of this Hon’ble Court from taking any action in furtherance of the impugned notice dated 1.5.2008 (Exhibit - “P” hereto) (iv) for ad-interim relief in terms of prayer (c) above; 3 (v) for costs of the petition and orders thereon; and (vi) for such further and other reliefs, as this Hon’ble Court may deem fit and proper in the nature and circumstances of the case. “ According to the petitioners, the petitioners is a company engaged in manufacture and manufactures a variety of “Atraumatic Needled Sutures”. The petitioners claim classification of the said goods as “Surgical Appliances” under Chapter sub Heading 90.18. The goods in question to which this petition relates are said to be Sterlized General Needled Sutures. In a judgment reported in 1997 (92) ELT 23 it had been held that Needled Sutures were classifiable under the then Chapter Sub Heading 90.18 of CET as “Surgical Appliances” and were not classifiable under Chapter Sub Heading 3005.90 as “Suturing Material”. According to the petitioners, the judgment rendered by the Supreme Court between the parties to the present petition pertained to two varieties of Needled Sutures i.e. (i) “Cardiovascular Needles Sutures” and (ii) “Atraumatic Needled Sutures”. The petitioners, therefore, contend that the judgment of the Supreme Court, therefore, squarely covers the present goods. According to the petitioners, pursuant to the order of the Supreme Court, the petitioner cleared Cardiovascular Needled Sutures and Atraumatic Needled Sutures at Nil rate of duty under notification No.95/2006-CE read with notification No. 21/2002-Cus and continued to classify the same under Central Excise 4 Chapter 30 and cleared it on payment of central excise duty at the rate of 16% till March, 2007. Subsequently with effect from 28.2.2005 in terms of the notification No.6/2005-CE (NT) read with Central Excise (Amendment) Act, 2004, a harmonized system of nomenclature and 8 digit classification code came to be introduced. Under the restructured CET Chapter 30 deals with pharmaceutical products, tariff heading 2006 applies to “Sterile surgical catgut, similar sterile suture materials and sterile tissue adhesives for surgical wound closure, which had been covered by the erstwhile Tariff Heading 3005. Chapter Heading 9018 continued to cover “instruments and appliances used in medical, surgical, dental or veterinary sciences, including scientigraphic apparatus, other elector medical apparatus and sight testing instruments. Under the said notification No.10/2006, partial duty exemption was granted to all goods falling under Central Excise Chapter Heading 9018 and were chargeable with duty at 8% instead of 16%. Since the petitioners claim that the judgment of the Supreme Court had held that Needled Sutures were classifiable as surgical appliances, submitted a detailed representation claiming classification of the said goods under Chapter Heading 9018 as a surgical appliances/instrument. It appears that there was some correspondence in which petitioners gave detailed reasons as to why the said goods merited classification under Chapter Heading 9018. According to the petitioners, despite the said representations a show cause notice dated 1.5.2008 came to be issued to the petitioners alleging contravention of the provisions of Central Excise Rules, 2002. The said show cause notice alleged that the judgment of the Supreme Court was restricted to 5 Cardiovascular Needled Sutures and Atraumatic Needled Sutures and did not apply to the goods which are at present subject matter of this petition. The petitioners immediately rushed to this Court and the Division Bench of this Court by its order dated 27.4.2009 directed the respondents not to take any punitive measures till 7th May, 2009. 2. The respondents to this petition have filed their affidavit in reply. It is the contention of the respondents that the judgment of the Supreme Court did not cover the goods which are subject-matter of the present petition. It is also the contention of the respondents that the judgment of the Supreme Court is restricted only to the extent of the classification of Cardiovascular Needled Sutures and Atraumatic Needled Sutures being life saving and sight saving equipments. The respondents, therefore, justify the issuance of the show cause notice. 3. We have heard Mr Rohan Shah, learned Counsel for the petitioners and Mr Alok Sharma, learned Assistant Solicitor General for the respondents. With the assistance of the learned Counsel for the parties we have perused the show cause notice as well as the judgment of the Supreme Court rendered between the parties. 4. Learned Counsel for the petitioners has urged before us that since the controversy in the present petition is squarely covered by the earlier judgment of the Supreme Court, the issuance of the show cause notice can be said to be 6 one without jurisdiction. It is, however, not disputed before us that the respondents do have the jurisdiction to issue the notice, but what is contended before us is that as the controversy is squarely covered by the judgment of the Supreme Court, the issuance of the said notice can be said to be without jurisdiction. In support of the aforesaid proposition, reliance is placed on the judgment of the Calcutta High Court in Indian Cardboard Industries Ltd. vs. Collector of Central Excise, 1992 (58) E.L.T. 508, particularly the observations of the Court at paragraph 15 of the report. In the said judgment it has been held that on the basis of the decisions which were cited, it appeared to the Court that Court could interfere in the exercise of its jurisdiction under Article 226 of the Constitution with a show cause notice, if , (1) The show cause notice ex facie or on the basis of admitted facts does not disclose the offence alleged to be committed; (2) When the show cause notice is otherwise without jurisdiction; (3) When the show cause notice suffers from an incurable infirmity; (4) When the show cause notice is contrary to judicial decisions or decisions of the Tribunal; (5) When there is no material justifying the issuance of the show cause notice.” Reliance is also placed on the decision of the Supreme Court in East India Commercial Co. Ltd., Calcutta vs. Collector of Customs, Calcutta, 1983 7 (13) E.L.T. 1342 (S.C.), where the Supreme Court at paragraph 29 has held that the issue of show cause notice for launching proceedings contrary to law declared by the High Court of the same State would be invalid and the proceedings would be without jurisdiction. Reliance is also placed on the decision of the Karnataka High Court in Y. Moideen Kunhi & ors. vs. Collector of Central Excise, Bangalore & ors, 1986 (23) E.L.T. 293 (Karnataka), particularly the observations of the Court at paragraph 51 of the report in which the learned Single Judge of the Karnataka High Court has held that normally the High Court is reluctant to interfere at the show cause notice stage of the adjudication proceedings but having regard to the enunciation of the law with reference to the connotation of the term `timber’ as considered by the Supreme Court in Titaghur Paper Mills’ case, the case was a fit one for interference even at the stage of show cause notice. 5. It cannot be disputed that if the allegations made in the show cause notice are contrary to the enunciation of law by the Courts, the said show cause notice could be held to be one without jurisdiction and, therefore, entitling the High Court in the exercise of its writ jurisdiction under Article 226 of the Constitution to interfere at the stage of issuance of the show cause notice. The goods in the present petition prima facie do not stand squarely covered by the earlier judgment of the Supreme Court. It would be a matter of investigation for the authorities to determine if the said goods stand squarely covered or not. A dispute is raised in the show cause notice that the goods involved in the present petition are not identical to the goods which 8 were subject-matter of the decision of the Supreme Court. In the show cause notice reasons are given by the authorities as to why according to them the goods involved in the present petition are not identical to the goods which were subject-matter of the earlier litigation. The petitioner, therefore, is required to show cause and satisfy the authorities, if according to the petitioner the goods involved in the present petition are squarely covered by the decision of the Supreme Court in the earlier round of litigation. In the light of that fact, therefore, it cannot be said that the show cause notice which has been issued to the petitioners is a show cause notice containing allegations which stand squarely covered by the enunciation of the law by the Court. The show cause notice, therefore, in the background of these facts cannot be said to be a show cause notice issued without jurisdiction. 6. A reference in this behalf may usefully be made to the judgment of the Supreme Court in Special Director & anr vs. Mohd. Ghulam Ghouse & anr., (2004) 3 SCC 440 and particularly to the observations of the Supreme Court at paragraph 5 of the report, which read as under :- “Unless the High Court is satisfied that the show-cause notice was totally non est in the eye of the law for absolute want of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the mere asking and as a matter of routine, and the writ petitioner should invariably be directed to respond to the show-cause notice and take all stands highlighted in the writ petition. Whether the 9 show-cause notice was founded on any legal premises, is a jurisdictional issue which can even be urged by the recipient of the notice and such issues also can be adjudicated by the authority issuing the very notice initially, before the aggrieved could approach the court.” 6. In the present case what we find is that it cannot be said with any degree of certainty unless the authority issuing the show cause notice investigates and finds out if the goods in question and the controversy raised in the show cause notice stand fully covered by the earlier judgment of the Supreme Court. The petitioners obviously can raise all the issues which have been raised in the petition in its reply to the show cause notice. In the event of an adverse order being passed against the petitioners, the petitioners have remedies available in law of questioning the said order. In the light of the fact, therefore, we are not inclined to interfere with the show cause notice and the proceedings emanating from the issuance of the show cause notice. However, since an interim relief has been operating and the petitioners have obviously not responded to the show cause notice by filing its reply, a reasonable opportunity, according to us, should be afforded to the petitioners of submitting its reply. 7. We, therefore, see no merit in the present petition and the petition is dismissed. The petitioner may however, if advised, submit its reply to the respondents in response to the show cause notice within three weeks from 10 today. The respondents, on receipt of the said reply from the petitioners, may proceed in accordance with law for deciding the said show cause notice. Since we have not decided any of the issues raised in the petition, the petitioners would be at liberty to raise these issues before the respondents in its reply. Any observations made by us in this order touching the merits of the matter should not be construed as any findings on merits. 8. Petition is accordingly dismissed with the aforesaid liberty and directions with no order as to costs. [ R. K. DESHPANDE, J.] [ P. V. HARDAS, J.] amj/wp6500.08