1 CEXA 79.10.sxw JPP IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CUSTOMS EXCISE APPEAL NO. 79 OF 2010 Mira Silk Mills & Anr. ... Appellants. V/s. The Central Excise and Service Tax Appellate & Ors. ... Respondents. Mr. D.B. Shroff, Senior Advocate with Mr. Karl Shroff i/b. Shamim & Co. for the Appellants. Mr. Pradeep S. Jetly for the Respondents. CORAM : DR. D.Y. CHANDRACHUD & A.A. SAYED, JJ. 8 DECEMBER 2011. P.C. :- This Appeal by the Assessee is directed against a decision rendered by the Customs Excise & Service Tax Tribunal on 20 May 2005. The Tribunal has, by its decision, dismissed the Appeal, filed by the Assessee against an order passed by the Commissioner of Central Excise on 18 October 2000, save and except for modifying the quantum of penalty. At the hearing of this Appeal, a preliminary objection has been raised by Counsel appearing on behalf of the Revenue to the 2 CEXA 79.10.sxw maintainability of the Appeal on the ground that the Appeal involves a determination of a question having relation to the rate of duty of excise or to the value of goods for the purposes of assessment and that consequently, an Appeal would lie to the Supreme Court under Section 35L(b) of the Central Excise Act, 1944. 2. A notice to show cause was issued to the Appellants on 2 May 1986 alleging a contravention of the provisions inter-alia of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 as amended, and of the provisions contained in diverse Rules of the Central Excise Rules, 1944. The allegation against the Assessee was that it had subjected man-made fabrics falling under Tariff Item No. 22 of the Central Excise Tariff to the process of bleaching, stentering, dying, printing & decatising at its factory by suppressing or making a willful misstatement of fact on a claim that the Assessee was only undertaking the process of calendering. After several grounds of remand, the Commissioner confirmed the demand for duty in the amount of Rs.1.02 crores towards additional excise duty and imposed personal penalties. The Tribunal, by its impugned decision, 3 CEXA 79.10.sxw confirmed the order of the Commissioner (save and except for modifying the quantum of penalty). The Tribunal held on appreciating the evidence on record that the Assessee had subjected man-made fabrics to several processes and that the manufactured product was cleared under the garb of being calendered fabric. 3. Section 35G provides for an Appeal to the High Court from an order passed by the Tribunal not being an order relating among other things to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment. Under Section 35L(b), an Appeal lies to the Supreme Court from an order passed by the Tribunal relating among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment. Provisions of the Customs Act, 1962 analogous to those contained in the Central Excise Act, 1944 have been considered by the Judgment of the Supreme Court in Navin Chemicals Manufacturing & Trading Co. Ltd. V/s. Collector of Customs1. The test which has been formulated 1 1993(68) E.L.T. 3 (S.C.) 4 CEXA 79.10.sxw by the Supreme Court is whether the question that requires determination has a direct and proximate relation, for the purposes of assessment, either to the rate of duty applicable to the goods or to the value of the goods. The Supreme Court held that a dispute as to the classification of the goods and as to whether or not they are covered by an exemption Notification relates directly or proximately to the rate of duty applicable thereto for the purposes of assessment. Though the Customs Act in the explanation to sub-Section 5 of Section 129D contained a statutory definition, the Supreme Court observed that the statutory definition accords with the meaning which the Court had assigned to the meaning of the expression. The law laid down by the Supreme Court is therefore not confined to the provisions of the Customs Act, 1962, but would govern the analogous provisions of the Central Excise Act, 1944. As a matter of fact, Division Benches of this Court have applied the same principles in the context of the Central Excise Act, 1944 in Union of India vs. Auto Ignation Ltd.2, Sterlite Optical Technologies Ltd. vs. Commissioner of Central Excise, Aurangabad3, and 2 2002 (142) E.L.T. 292 (Bom.) 3 2007 (213) E.L.T. 658 (Bom.) 5 CEXA 79.10.sxw Commissioner of Central Excise, Nagpur vs. Universal Ferro & Allied Chemicals Ltd.4. 4. In the present case, both in the synopsis to the Appeal as well as in paragraph 3 of the Memo of Appeal, the Assessee has adverted to Notification 279/79-CE (the correct number of the Notification is 297/79-CE) dated 24 November 1979. Under that Notification, which has been made in exercise of powers conferred by Rule 8(1) of Central Excise Act, 1944 r/w. Section 3(3) of the Additional Duties of Excise (Goods of Special Importance) Act, 1957, the Central Government has exempted man-made fabrics falling under sub-Item (1) of Item 22 of the First Schedule to the Act, when subjected to the finishing processes specified in the Table annexed thereto from the whole of the Additional Duties of Excise. One of the processes set out in the Table is calendering with plain rollers. The case of the Revenue is that though the Assessee claimed to merely carry out the process of calendering, as a matter of fact, the Assessee was engaging in other processes. The Tribunal has entered a finding of fact and confirmed the decision of the Commissioner. The case of the Revenue, as 4 2009 (234) E.L.T. 220 (Bom.) 6 CEXA 79.10.sxw noted earlier, is that the Assessee does not carry out only calendering whereas, according to the Assessee, it did not carry out any other process save and except for calendering. That is a factual issue. 5. At this stage, what is relevant is that applying the test laid down by the Supreme Court in Navin Chemicals (supra), the question that requires determination would have a direct and proximate relation, for the purposes of assessment, to the rate of duty applicable to the goods or to the value of the goods. Moreover, as held by the Supreme Court, a dispute as to whether or not the goods are covered by an exemption notification relates directly and proximately to the rate of duty applicable thereto for the purposes of assessment. 6. In this view of the matter, we are of the view that the preliminary objection raised by the Revenue to the maintainability of the Appeal would have to be upheld. We accordingly dismiss the Appeal before this Court as not maintainable, leaving it open to the Assessee to espouse the remedy available in law. There shall be no order as to costs. 7 CEXA 79.10.sxw 7. We clarify that in view of this decision which is rendered on the preliminary objection filed by the Revenue, it has not become necessary for the Court to render any opinion on the merits of the contentions. (Dr. D.Y. Chandrachud, J.) (A.A. Sayed, J.)