M/s.Sakthi Masala Private Ltd. v. The Commissioner of Central Excise No.1

(i) "SAKTHI"/"STC" branded Bajji Bonda Powder should not beclassified under Sub Heading 2108.99 of erstwhile First Scheduleto the Central Excise Tariff Act,1985 and 2106.9099 of the presentFirst Schedule to the Central Excise Tariff Act, 1985; (ii) the goods viz., "SAKTHI"/"STC" branded Tamarind Rice Powder,Lemon Rice Powder, Garlic Rice Powder, Dhall Powder and ChillyChutney Powder should not be classified under Sub Heading 2103.90of erstwhile First Schedule to the Central Excise Tariff Act,1985and 2103.9040 of the present First Schedule to the Central ExciseTariff Act, 1985; (iii) as to why the extended period under the proviso to Section11A(1) of Central Excise Act,1944 should not be invoked andCentral Excise Duty amounting to Rs.3,99,66,776/- and EducationalCess of Rs.5,76,352/- totalling Rs.4,05,43,128/- for the periodfrom September,2002 to October,2006 should not be demanded on thegoods manufactured and cleared without payment of duty; and(iv) as to why penalty should not be imposed under Section 11AC ofCentral Excise Act, 1944 and Rule 25 of Central Excise Rules,2002.2. The petitioner is stated to be a Private LimitedCompany incorporated under the Companies Act,1956 engaged in themanufacture and sale of various spices and other masala powdersfalling under Chapter 9 of the Central Excise Tariff Act,1985. Asper the impugned show cause notice, the above said manufacturedgoods are not used as masalas, since they no longer retain theessential characteristics of spice meriting classification underChapter 9. As per the show cause notice, it is presumed that theabove said goods were cleared without disclosing the above saidfact and without payment of appropriate Central Excise duty.2(a). It is the case of the petitioner that during 1995,three out of the six items under dispute, viz., (i) Dal Mix (presently called as Dhal rice powder);(ii)Idly, Dosa Powder (presently called as Chilli chutney powder);(iii)Tamarind Mix (presently called as tamarind rice powder) were the subject matter of investigation by issuance of show causenotice dated 27.11.1995 and 24.04.1996, against which thepetitioner moved W.P.No.7029 of 1996. The said writ petition wasdisposed of by quashing the show cause notice relating to articlesincluded in 0903.00 making it clear that if there is any otheritem manufactured by the petitioner not coming within the saidentry, it would be open to the opposite party to proceed inaccordance with law. The said order is reported in 2002 (140)E.L.T. 77 (Madras) [P.C.Duraisamy vs. Assistant Commissioner ofCustoms & Central Excise, Erode-1]. Two other connected writpetitions, viz., W.P.Nos.7162 and 7163 of 1995 were also disposedof along with the above said writ petition.2(b). According to the petitioner, the three items, whichwere subject matter of the previous writ petitions, viz., (i) Dal https://hcservices.ecourts.gov.in/hcservices/ Mix; (ii) Idly, Dosa Powder; and (iii) Tamarind Mix have merelyundergone a change in English name without altering the contentsand the current English names of the above products are, (i) Dalrice powder; (ii) Chilli Chutney powder; and (iii) Tamarind ricepowder. According to the petitioner, by virtue of the earlierorder stated above, the present impugned show cause notice inrespect of the above three items suffers lack of jurisdiction.2(c). It is the further case of the petitioner that basedon the observations made in the above writ petitions, therespondents have also dropped further proceedings in respect ofother two show cause notices relating to the manufacture of soapnut powder and the trading of cleaning powder apart from the abovethree items and the order of this Court has become final.2(d). The remaining three items, viz., (i) Garlic Mix(presently called as garlic rice powder); (ii) Lemon rice powder;and (iii) Bajji Bonda powder, did not form part of the earlierlitigation. In June and July,1998, the Government imposed levy onspices and the petitioner applied for registration and theregistration certificate was given in favour of the petitioner inCE 250151 5186 Sl.No.7/98 and the petitioner has filed theclassification list in terms of the then existing Rule 173B of theCentral Excise Rules, 1944 and all the above said six productswere classified by the petitioner under Chapter 9 and the same wasaccepted by the Department.2(e). The petitioner by its letter dated 02.06.1998, hasproposed to use the packing materials belonging to M/s.Sakthi DeviSpices Private Limited, having brand name "SANTHI" for packingbajji bonda mix and has agreed to discharge the duty of excise andthe same was acknowledged by the respondents and returns have beenfiled for the month of June and July,1998. The Government, byNotification No.17/98, has exempted levy of excise duty witheffect from 18.07.1998. Accordingly, the petitioner has filedrefund claim, which was sanctioned by the Assistant Commissioner,Erode Division in the order dated 06.01.2000, after obtainingapproval from the Assistant Commissioner (Technical) in the Officeof the Commissioner of Central Excise, Coimbatore dated28.12.1999. Therefore, according to the petitioner, the remainingthree items, viz., (i) Garlic Mix (presently called as garlic ricepowder); (ii) Lemon rice powder; and (iii) Bajji Bonda powder wereclassified by the petitioner under Chapter 9, which was acceptedby the respondents without any contest and in spite of that,invoking the same under the present impugned show cause notice iswithout jurisdiction. The petitioner is stated to have obtainedmany awards for their manufacturing process.2(f). It is the case of the petitioner that the impugnedshow cause notice seeks to reclassify the six products, out ofwhich three, viz., (i) Dal Mix (presently called as Dal ricepowder); (ii)Idly, Dosa Powder (presently called as Chilli chutney https://hcservices.ecourts.gov.in/hcservices/ powder); and (iii)Tamarind Mix (presently called as tamarind ricepowder), were the subject matter of the earlier show cause noticedated 27.11.1995 and 24.04.1996, which was already quashed by thisCourt and the said order has become final. In respect of otherthree products, viz., (i) Garlic Mix (presently called as garlicrice powder); (ii) Lemon rice powder; and (iii) Bajji Bondapowder, the petitioner has filed a statutory declaration underRule 173B on 02.06.1998 stating that the said products are fallingunder Chapter 9 and brought to Central Excise duty for a veryshort period of two months and declaration of the said products inSl.No.07, 10 and 22 under Chapter 9 in the brand name of "Sakthi"has been approved by the Excise Department through the RangeSuperintendent of Central Excise and the closing stock position ofvarious finished goods have duly been approved by the CentralExcise Officer on 02.06.1998 and returns were filed as per Rule173G of the erstwhile Central Excise Rules,1944 for the twomonths, viz., July and August,1998 and the same was acknowledgedby the Superintendent of Central Excise. 2(g). The spices falling under Chapter 9 were brought toduty by Notification No.5/98 dated 2.6.98 and thereafter, it waswithdrawn by Notification No.17/98 dated 18.7.98. Therefore, thepetitioner, who has remitted the amount for two months has filedrefund application. According to the petitioner, all the sixitems have already been classified as spices and statutorydeclaration has been approved, and therefore, the impugned showcause notice seeking to demand duty for the period fromSeptember,2002 to October,2006, served on the petitioner on08.10.2007, invoking the extended period of limitation of fiveyears under the proviso to Section 11A of the Act,1944, is withoutjurisdiction and the same is without any authority of law.2(h). The impugned show cause notice is challenged onvarious grounds including that when the earlier show cause noticehas been set aside, subsequent proceedings on the same issuecannot be initiated on the basis of alleged suppression of factsand by invoking the extended period of limitation; that theearlier decision of this Court, viz., [P.C.Duraisamy vs. AssistantCommissioner of Customs & Central Excise, Erode-1 (2002 (140) ELT77 (Mad.)] is binding on the respondents in respect of threeitems; that in respect of remaining three items which were not thesubject matter of earlier writ petition the petitioner has alreadyfiled statutory declaration under Rule 173B under erstwhileCentral Excise Rules,1944, which was approved and acknowledged;that the brand "Sakthi" was also disclosed in the said declarationand therefore, there was no suppression of any material fact toenable the respondents to initiate proceedings under extendedperiod of five years as per Proviso to Section 11A; that thespices were originally brought under duty and subsequentlyexempted by notification No.17/98-CE dated 18.7.98, since thepetitioner has remitted the duty for whole of July,1998, a refund https://hcservices.ecourts.gov.in/hcservices/ claim was made, which was sanctioned on 06.01.2000; that evenotherwise, under Section 11A, the respondents are permitted toinitiate proceedings only for a period of five years, whereas theimpugned notice proceeds for the demand from April,2002 toOctober,2006 and the show cause notice was served on 08.10.2007and calculating the period till date of service, it is more thanfive years and therefore, the impugned show cause notice is voidab initio. It is admitted by the petitioner that it has not chosento submit on the merits as to whether the impugned products wouldfall under Chapter 9 or 21, which is not within the realm of thisCourt.3. It is the case of the respondents in the counteraffidavit that the petitioner is a Private Limited Companyregistered under the provisions of the Companies Act,1956incorporated in the year 1998, having their factory and office inthe place mentioned in the writ petition, viz., No.6Mamarathupalayam, Erode 638 004 and is engaged in the manufactureof various edible preparations, spice powders, masala powders,etc. and the products are marketed in the brand name "SAKTHI" andcopyright owned Logo "STC". The Managing Director of thepetitioner Company is one P.C.Duraisamy and his family members arethe share-holders. 3(a). It is also the case of the respondents that the saidP.C.Duraisamy is also a Director of M/s.Sakthi Hi-Tech Foods IndiaPvt. Ltd. and M/s.Santhi Devi Spices Pvt. Ltd. and other similarfamily concerns and he is also the proprietor of M/s.SakthiTrading Company. All the concerns are situated in the samepremises. 3(b). In the year 2005, the respondents came to knowthrough intelligence that the petitioner is indulging in theevasion of excise duty in respect of Sakthi Brand foodpreparations without registration with the Central ExciseDepartment and without payment of excise duty under law andwrongly classifying and availing duty exemption meant for SmallScale Industries by using the brand name "Sakthi" and logo "STC",which belong to P.C.Duraisamy, as proprietor of M/s.Sakthi TradingCompany.3(c). The second respondent, based on report, has visitedthe premises of the petitioner on 13.10.2005 and took statementsfrom various persons, including one D.Senthil, Director of thepetitioner Company; Nachiappan, Manager and P.C.Duraisamy,Managing Director. Since the petitioner has failed to furnish therequisite complete information relating to the ingredients oftheir products, the second respondent had to issue the impugnednotice based on the available records.3(d). It was, because of the suppression of variousmaterial facts, Section 11A(1) of the Central Excise Act,1985 wasinvoked for extended period, by claiming the amount as stated in https://hcservices.ecourts.gov.in/hcservices/ the impugned show cause notice. The petitioner, instead ofreplying to the impugned show cause notice, has chosen to file thewrit petition, which according to the respondents is notmaintainable.3(e). According to the respondents, the only Company whichhad registration certificate was one M/s.Sakthi Trading Company,which is a proprietary concern with P.C.Duraisamy, as itsproprietor and using the said registration he has been clearingall disputed items in various names and manufacturing the goods inthe same premises, viz., No.6, Mamarathupalayam, Erode. Thecertificate was issued in the name of M/s.Sakthi Trading Company,to the proprietor P.C.Duraisamy and no certificate has beenobtained by the present petitioner, which is a Company registeredunder the Companies Act. 3(f). The writ petition, viz., W.P.No.7029 of 1996,mentioned by the petitioner, in which order was passed andreported in P.C.Duraisamy vs. Assistant Commissioner of Customs &Central Excise, Erode-1 (2002 (140) ELT 77 (Mad.) relates toM/s.Sakthi Trading Company, which is a proprietary concern and notthe present petitioner Company. The earlier show cause noticedated 24.04.1996 was issued to M/s.Sakthi Trading Company inrespect of Turmeric Powder, Chilli Powder, Coriander Powder,Masala Powder, Sundavathal, washing and cleaning preparations,such as soap nut powder and cleaning powder by the saidproprietary concern. It was, based on the stand taken by therespondents in the counter affidavit in the said writ petition inrespect of M/s.Sakthi Trading Company in respect of three items,the show cause notice was quashed, however, giving liberty to therespondents to proceed in accordance with law, if there is anyother item manufactured by the petitioner not coming under thesaid Entry. Other writ petitions were also filed byP.C.Duraisamy, as proprietor of M/s.Sakthi Trading Company inrespect of the goods manufactured by the proprietorship.Therefore, according to the respondents, on the factual position,the judgement given in the said case is not relating to thepresent petitioner at all and the question of applicability of thesaid judgement in respect of three items, which are covered in thepresent impugned show cause notice does not arise.3(g). According to the respondents, the productsmanufactured by the present petitioner are different and they aresold in different names without registering themselves with therespondents. The Department's registration stood only in the nameof P.C.Duraisamy of M/s.Sakthi Trading Company and the saidcertificate of registration was issued on 02.06.1998 for thepurpose of manufacturing excisable goods regarding branded spicesfalling under sub heading No.0903.00 and if the petitionermanufactures any other thing, it does not fall under Chapter 9 andif the petitioner fails to inform the same and file return, itamounts to suppression of facts and therefore, the respondents are https://hcservices.ecourts.gov.in/hcservices/ entitled to invoke Section 11A(1) of the Central Excise Act,1944.3(h). The petitioner in this writ petition has notregistered themselves with the respondents and no returns havebeen filed and therefore, it is not correct for the petitioner tostate as if the respondents were already aware of the operation ofthe petitioner. It is also the further case of the respondentsthat by making claim from September,2002 to October,2006, theyinvoked the extended period of five years limitation and notbeyond that period. According to the respondents, it is thepetitioner, who has misrepresented and misled by filing of thewrit petition against the show cause notice which is a clear abuseof process of law.3(i). According to the respondents, M/s.Sakthi TradingCompany, which is the petitioner in the earlier writ petition hasproduced three products, which were disputed therein, wherein thecontents of spices in the goods were ranging from 55% to 90% andtherefore, classified under Chapter 9 of the Act. However, inrespect of the products manufactured by the petitioner, the spicecontents was ranging from 15% to 20%. Even as per the statementgiven by the Director and Managing Director of the petitionerCompany, it warrants classification under Chapter 21. Simplybecause the petitioner is using the brand name and logo ofM/s.Sakthi Trading Company, the concession extended to the saidproprietary concern cannot be extended to the petitioner, which isa different entity altogether.3(j). It is the case of the respondents that even in theearlier writ petition, this Court has given liberty to therespondents to proceed in accordance with law if any other itemswere manufactured. Apart from the fact that the petitionerCompany has not registered with the Central Excise Department formanufacture, the claim of the petitioner is incorrect on theground that the mixture of spices once mixed, the individualspices lose its essential characteristics and therefore, theycannot be classified under Chapter 9 as spices, as per thejudgement of the Supreme Court in A.P.Products Ltd. vs. State ofAndhra Pradesh (2007 (214) ELT 485 (SC). 3(k). The point raised by the petitioner in the writpetition that the Dal mix, Idly dosa mix and Tamarind mix havemerely undergone a change in name in English without anyalteration in its contents, is denied. It is also the case of therespondents that the petitioner has a right of appeal against theorder of the second respondent and even thereafter, alternativeremedy is available under the Act. When the statutory remediesare available in fiscal statute, it is only proper for the partiesto seek such remedy. It is also denied that the impugned noticelacks jurisdiction. It is only after investigation that spicecontents were found to be different, the impugned notice came tobe issued. The finality attained in respect of three products wasin relation to the products manufactured by P.C.Duraisamy, https://hcservices.ecourts.gov.in/hcservices/ proprietor of M/s.Sakthi Trading Company, which is not the subjectmatter in the above writ petition. 3(l). It is also stated that the percentage of spicecontents is a test for the purpose of bringing it either underChapter 9 or 21. It is also stated that as decided by the SupremeCourt, the essential characteristics of spices are lost when theyare mixed and a new product emerges and therefore, the process ofmixing would amount to manufacturing. It is also stated that evenearlier in a case filed before this Court by M/s.Sakthi TradingCompany, there was no decision on classification of the goods andthe decision was merely based on the contents of the counteraffidavit filed by the Department and even then this Court hasgiven liberty to the respondents to proceed in the event ofdifference in the manufacture. It is also stated that theremaining three items, viz., Garlic mix (presently called garlicrice powder); lemon rice powder and bajji bonda powder have notformed part of the previous litigation.4. Mr.N.Venkataraman, learned counsel appearing for thepetitioner would contend that even under the earlier show causenotice, which was quashed by this Court, three items of sameproducts were questioned which is conceded by the respondents inthe counter and therefore, the respondents are not entitled toreagitate the issue by the impugned show cause notice. He wouldalso submit that based on the order passed by this Court, therefund order has been passed by the Department on 06.01.2000. Hewould rely upon the judgement of the Supreme Court in East IndiaCommercial Co.Ltd., Calcutta vs. Collector of Customs, Calcutta[1983 E.L.T.1342 (SC)] to substantiate his contention. As per theConstitution of India, the law declared by the highest Court inthe State is binding on authorities or tribunals under itssuperintendence and they cannot ignore it either in initiating aproceeding or deciding on the rights involved in such aproceeding. Therefore, according to the learned counsel, byvirtue of the earlier judgement passed by this Court inP.C.Duraisamy vs. Assistant Commissioner of Customs & CentralExcise, Erode-1 (2002 (140) E.L.T. 77 (Mad.), it is not open tothe respondents to issue a fresh show cause notice on the sameissue.4(a). In respect of the remaining three items he wouldalso reiterated that in respect of those items, the returns wereassessed and refund granted admitting that they are spices.Therefore, having given exemption in respect of the six products,it is not open to the respondents now to invoke Section 11A of theAct for the purpose of applying the extended period of five yearsbeyond one year. According to the learned counsel, there was nosuppression at all and monthly returns have been regularly filedand the goods have been well documented and therefore, it is notopen to the respondents now to say that they are not spice https://hcservices.ecourts.gov.in/hcservices/ condiments. To substantiate his contention that extended periodunder Section 11A of the Act cannot be invoked, learned counselwould also rely upon various judgements of the Supreme Court,viz.,(i) 2003 (153) E.L.T. 14 (SC) [ P&B Pharmaceuticals (P) Ltd., vs.Collector of Central Excise ] ;(ii) 2004 (164) E.L.T. 236 (SC) [ ECE Industries Limited vs.Commissioner of Central Excise, New Delhi ];(iii) 2004 (166) E.L.T. 151 (SC) [ Hyderabad Polymers (P) Ltd.,vs. Commissioner of Central Excise, Hyderabad ]; and(iv) 2006 (197) E.L.T. 465 (SC) [ Nizam Sugar Factory vs.Collector of Central Excise, A.P. ].He would also submit that mere change of opinion cannot be aground for the purpose of invoking the extended clause underSection 11A of the Act.5. On the other hand, Mr.Velayuthan Pichiya, learnedcounsel appearing for the respondents would submit that theearlier judgement reported in P.C.Duraisamy vs. AssistantCommissioner of Customs & Central Excise, Erode-1 (2002 (140)E.L.T. 77 (Mad.) has no bearing for the simple reason that itrelated to the proprietary concern, viz., M/s.Sakthi TradingCompany, whereas the present petitioner Company is incorporatedunder the Companies Act and therefore, the question ofapplicability of various judgements referred to by the learnedcounsel for the petitioner does not arise. He would also statethat the earlier show cause notice and the returns were filed bythe proprietary concern, viz., M/s.Sakthi Trading Companyrepresented by P.C.Duraisamy as its proprietor and therefore,M/s.Sakthi Trading Company is not a petitioner before this Courtin this writ petition. According to the learned counsel, theconstituents of the spices and their character in the manufacturedgoods are different, as found in the investigation. He would alsorely upon the judgement of the Supreme Court in 2007 (214) E.L.T.485 (SC) [A.P.Products vs. State of Andhra Pradesh]. Hiscontention is that the petitioner is carrying on manufacturing ofvarious goods in different names and the only registered companyis M/s.Sakthi Trading Company and all other manufacturing unitshave been suppressed and therefore, the respondents are entitledto invoke Section 11A of the Act.6. I have heard learned counsel for the petitioner andrespondents and perused the entire records and given my anxiousthoughts to various issues involved in this case.7. At the outset it is relevant to note that the earlierjudgement rendered by this Court and reported in P.C.Duraisamy vs.Assistant Commissioner of Customs & Central Excise, Erode-1 (2002 https://hcservices.ecourts.gov.in/hcservices/ (140) E.L.T. 77 (Mad.) relates to the manufacturing of goods bythe petitioner in the said writ petition, viz., P.C.Duraisamy, asproprietor of M/s.Sakthi Trading Company. That was a caserelating to the show cause notice issued by the respondentsregarding the manufacturing of edible preparations like TurmericPowder, Chilly Powder, Coriander Powder, Masala Powder,Sundavathal and washing and cleaning preparations, such as soapnut powder and cleaning powder, coming within the ediblepreparations as classified under Central Excise Tariff sub heading2108.90. In that case, which was by the proprietary concern ofM/s.Sakthi Trading Company, the respondents have filed counteraffidavit and in the counter affidavit it was specifically statedby the respondents as follows:"..... all the goods manufactured by thepetitioner except branded soap-nut powder,branded sundavathal, branded appalam and un-branded Turmeric are classified under sub-heading No.0903.10 as spices and the same hassince been approved."It was based on the contents of the counter affidavit, this Court,having decided that practically the respondents have admitted thecase of the petitioner, has quashed the impugned show cause noticewithout directing the petitioner therein to resort to alternativeremedy. The operative portion of the said judgement is asfollows:"7. It is true that where alternative remediesavailable, ordinarily the High Court should notentertain the matter under Article 226. Similarly evenif the High Court has entertained the writ petitionseeking to quash the show cause notice, it is open tothe person concerned to file show cause so that thematter can be determined by the appropriate authority.While these cannot be any dispute relating to such wellaccepted principles, in the present case, in view of thestand taken by the respondent practically accepting thecontention of the petitioner, I do not think any usefulpurpose would be served by directing the petitioner toundergo the process of filing show cause and pursuingthe statutory remedies. In view of the stand taken inthe counter affidavit itself, the show cause notice sofar as it relates to articles included in 0903.00 isquashed. It is however made clear that if there is anyother item manufactured by the petitioner not comingwithin the aforesaid entry, it would be open to theopposite party to proceed in accordance with law.Subject to the aforesaid observation, the writ petitionis disposed of without any order as to costs." https://hcservices.ecourts.gov.in/hcservices/

8. A reading of the said judgement makes it abundantly clearthat M/s.Sakthi Trading Company is a proprietary concern withMr.P.C.Duraisamy as its proprietor. Further, the operativeportion of the judgement of this Court as enumerated above, hasonly resulted in quashing of the show cause notice based on thecontents of the counter affidavit and no legal principle has beenlaid down or any law has been declared. It is also on record thatthe earlier case was filed by only M/s.Sakthi Trading Companyrepresented by its proprietor P.C.Duraisamy, which has beenregistered as per the provisions of the Central Excise Act and thepresent writ petitioner is M/s.Sakthi Masala Private Limitedrepresented by its Manager M.Nachiyappan, which is admittedly aPrivate Limited Company registered under the Indian Companies Actand not registered under the Central Excise Act. The show causenotice issued earlier was not to the petitioner, but to M/s.SakthiTrading Company, however the address of the petitioner as well asM/s.Sakthi Trading Company remains the same, viz., No.6,Mamarathupalayam, Erode 638 004. In such circumstances, thereliance placed on by the learned counsel for the petitioner,viz., judgement of the Supreme Court in East India CommercialCompany Ltd., Calcutta vs. Collector of Customs, Calcutta [ 1983E.L.T. 1342 (SC)] relating to the binding nature of law declaredby the highest Court in the State on the authorities or tribunalsunder its superintendence, has no application to the facts andcircumstances of the present case. 9. The necessary consequence is that the judgement in theabove said case which relates to three items, viz., (i) Dal mix(Dhal rice powder); (ii) Idly, Dosa powder (Chilly chutney powder)and (iii) Tamarind mix (tamarind rice powder) cannot be stated tobe binding on the respondents in respect of manufacturing of thesaid goods by the petitioner herein. It is the specific case ofthe second respondent as seen in the show cause notice that in thesame address, viz., No.6, Mamarathupalayam, Erode 638 004, theproducts are manufactured under different names either asM/s.Sakthi Trading Company, which is the proprietary concern or asM/s.Sakthi Masala Private Ltd., (SMPC), which is a Private LimitedCompany registered under the Indian Companies Act, in which thesaid P.C.Duraisamy is a Managing Director and his wifeMrs.D.Shanthi, is functioning as Director or as M/s.SakthiAromatic Masala Private Ltd., started by his son D.Senthil Kumar,in which the said Shanthi and her son are Directors. 10. It is also seen that another Company by name M/s.SakthiHitech Food India Pvt. Ltd., with P.C.Duraisamy and his sonD.Senthilkumar and Smt.D.Shanthi as Directors. That apart, theyhave started M/s.Santhidevi Spices (P) Ltd., with P.C.Duraisamy https://hcservices.ecourts.gov.in/hcservices/ and his son are Directors and the registered address of all thecompanies is No.6 Mamarathupalayam, Erode. However, it is onlyM/s.Sakthi Trading Company which has been registered under theCentral Excise Act and various goods like Dal powder, Idly, DosaPowder, Chilly Powder, lemon rice power, bajji bonda mix, whichhave been manufactured and sold directly to buyers outside arecleared in wholesale to the sister concern like M/s.SakthiAromatic Masala Pvt. Ltd., which was found out on investigationand the various constituent legal personalities, which arefunctioning in the same address have not been registered and itwas in those circumstances, after obtaining the statement fromvarious persons, the impugned show cause notice came to be issued.11. Whether M/s.Sakthi Trading Company, which is stated tohave been founded by P.C.Duraisamy as its proprietor hassubsequently become a Private Limited Company in the name ofpetitioner Company is a matter, which has to be decided on thefacts, especially under the circumstances that the impugned showcause notice speaks about the constitution of various Companies inthe same address with the said P.C.Duraisamy, his wife and son asDirectors and these issues cannot be decided under the writjurisdiction based on affidavit as it is held by this Court in2008 TIOL 55 HC Mad.CX [ Madura Coats Limited, Madurai vs. TheCommissioner of Central Excise, Madurai ] by K.Raviraja Pandianand Chitra Venkataraman,JJ. In a similar circumstance theDivision Bench, after analysing the various judgements of the ApexCourt on the issue, including the judgement in Siemens Ltd., vs.State of Maharashtra and others (2006 (12) SCC 33); State of H.P.and others vs. Gujarat Ambuja Cement Ltd., and another (JT 2005(6) SC 298) apart from the judgement in U.P.State BridgeCorporation Ltd., vs. U.P.Rajya Setu Nigam Karmachari Sangh (1998(4) SCC 268); and L.K.Verma vs. H.M.T. Ltd., and another (2006 (2)SCALE 90) it was held by the Division Bench that if there is aspecific remedy available under the statute or in case where thefactual issues are to be ascertained, writ petition cannot beentertained under Article 226 of the Constitution of India.Ultimately, the Division Bench has held as follows:"7. In this case, as already stated, so manyviolations, which are factual in issue, have beenalleged against the appellant and the appellant was onlyrequired to submit his explanation to the allegedviolations, it is not expected a writ Court on the basisof an affidavit and counter affidavit, resolve thedisputed questions of fact. Furthermore, what isimpugned is only a show cause notice calling upon thepetitioner to submit its reply. It is not a finaldetermination. The respondent would have very welldropped the proceedings, if the cause to be shown by the https://hcservices.ecourts.gov.in/hcservices/ petitioner are well founded. Hence, we are not able toappreciate the argument of the learned counsel Mr.SriramPanchu that the appellant need not undergo the ordeal ofreplying to the show cause notice. "12. Applying the dictum laid down based on hierarchy ofjudgements of the Supreme Court as stated above to the facts andcircumstances of the present case, as per the contents of theimpugned show cause notice, there is no difficulty to come to theconclusion that the matter requires deep appreciation of factsabout the various constituents and the same cannot be decided bythis Court while exercising jurisdiction under Article 226 of theConstitution of India. 13. As per Section 11A of the Central Excise Act,1944, therecovery of duties not levied or not paid or short-levied orshort-paid or erroneously refunded can be done by the CentralExcise Officer within one year from the relevant date, however,the proviso of the said section contemplates that where the excisehas not been levied or paid or has been short-levied or short-paidor erroneously refunded due to the reason of fraud, collusion orany wilful mis-statement or suppression of facts or contraventionof any of the provisions of the Act, the recovery can be made fora period of five years. The explanation to the said Section alsostates that in cases where the service of notice is stayed by theCourt, then the period of such stay shall be excluded for theabove determination of period of one year or five years as thecase may be. For proper appreciation of the legal position,Section 11A(1) is extracted hereunder:"11A. Recovery of duties not levied or not paid orshort-levied or short-paid or erroneously refunded.-(1) When any duty of excise has not been levied orpaid or has been short-levied or short-paid or[erroneously refunded, whether or not such non-levy ornon-payment, short levy or short payment or erroneousrefund, as the case may be, was on the basis of anyapproval, acceptance or assessment relating to the rateof duty on or valuation of excisable goods under anyother provisions of this Act or the rules madethereunder], a Central Excise Officer may, within [oneyear] from the relevant date, serve notice on the personchargeable with the duty which has not been levied orpaid or which has been short-levied or short-paid or towhom the refund has erroneously been made, requiring himto show cause why he should not pay the amount specifiedin the notice:Provided that where any duty of excise has not beenlevied or paid or has been short-levied or short-paid or https://hcservices.ecourts.gov.in/hcservices/ erroneously refunded by reason of fraud, collusion orany wilful mis-statement or suppression of facts, orcontravention of any of the provisions of this Act or ofthe rules made thereunder with intent to evade paymentof duty, by such person or his agent, the provisions ofthis sub-section shall have effect,Explanation.- Where the service of the notice isstayed by an order of a court, the period of such stayshall be excluded in computing the aforesaid period of[one year] or five years, as the case may be."14. The claim made under the impugned show cause notice isfor the period from September,2002 to October,2006. By computingthe same the period come to only four years. However, the case ofthe petitioner is that the petitioner has received notice on04.10.2007 and therefore, it goes beyond five years. Again, it isa matter which cannot be decided on affidavit. The question as towhether there is misrepresentation or deliberate suppression ofmaterial facts has to be decided by the authority only after thepetitioner explains in its reply to the show cause notice andafter the respondents going through the explanation submitted bythe petitioner. What is impugned in this writ petition is only ashow cause notice, which directs the petitioner to make itssubmission.15. The judgement of the Supreme Court relied upon by thelearned counsel for the petitioner in ECE Industries Ltd., vs.Commissioner of Central Excise, New Delhi [2004 (164) ELT 236(SC)] to substantiate his contention that extended period oflimitation is not invokable to the facts and circumstances of thepresent case is also not applicable. In that case, in earlierproceedings the same subject matter was decided under the earliershow cause notice for demand of duty and imposition of penalty forwrong availment of Modvat credit and its non-reversal and in suchcircumstances, the Supreme Court has held that when the issue hasalready been decided, the extended period under Section 11A of theAct has no application. The facts of the present case cannot becompared to the said judgement of the Supreme Court at all.16. Again, the judgement relied on by the learned counsel forthe petitioner in Hyderabad Polymers (P) Ltd., vs. Commissioner ofCentral Excise, Hyderabad [2004 (166) E.L.T. 151 (SC)], has noapplication at all. That was a case, wherein in an identicalcircumstance in respect of earlier notice, amount demanded wasdropped and therefore, the subsequent notice on the basis ofsuppression of material fact was not entertained under Section 11Aof the Central Excise Act,1944. The Supreme Court in that casehas held as follows: https://hcservices.ecourts.gov.in/hcservices/ "6. The Collector has given a categoric finding thatthe earlier Show Cause Notice raised a demand on asimilar issue and for an identical amount. That ShowCause Notice had been dropped. In our view the Tribunalwas wrong in still holding that there was suppression offact or material. This Court has in the case of ECEIndustries Limited vs. Commissioner of Central Excise,New Delhi reported in 2004 (164) E.L.T. 236 (S.C.) heldas follows:-"4. In the case of M/s.P&BPharmaceuticals (P) Ltd. vs. Collector ofCentral Excise reported in 2003 (153) E.L.T.14 (S.C.) = 2003 (2) SCALE 390, the questionwas whether the extended period of limitationcould be invoked where the Department hasearlier issued show cause notices in respectof the same subject-matter. It has been heldthat in such circumstances, it could not besaid that there was any wilful suppression ormis-statement and that therefore, the extendedperiod under Section 11A could not be invoked.5. In our view, the principles laid downin above case fully apply here. As earlierproceedings in respect of same subject-matterwere pending adjudication it could not be saidthat there was any suppression and theextended period under Section 11A was notavailable."On the ratio laid down in this judgement it must be heldthat once the earlier Show Cause Notice, on similarissue has been dropped, it can no longer be said thatthere is any suppression. The extended period oflimitation would thus not be available. We are unableto accept the submission that earlier Show Cause Noticewas for a subsequent period and/or it cannot be takeninto consideration as it is not known when that ShowCause Notice was dropped. If the Department wanted totake up such contentions it is for them to show thatthat Show Cause Notice was not relevant and was notapplicable. The Department has not brought any of thosefacts on record. Therefore, the Department cannot nowurge that findings of the Collector that that Show CauseNotice was on a similar issue and for an identicalamount is not correct."17. Equally, the judgement of the Supreme Court relied on bythe learned counsel for the respondents rendered in A.P. Productsvs. State of Andhra Pradesh [2007 (214) E.L.T. 485 (S.C.)], has https://hcservices.ecourts.gov.in/hcservices/ also no application on the facts and circumstances of the presentcase. In that case, it was held that in the preparation of masalapowder, when the grinding and mixing of various spices andcondiments in certain proportion was involved, after grinding andmixing, the ingredients lost their identity/character into adifferent name in the commercial world. However, in respect ofthe impugned show cause notice issued in the present case, such adecision cannot be arrived at at this stage by the respondentsthemselves unless and until the petitioner Company comes forwardwith its reply to the impugned show cause notice. 18. It is also stated that the point of classification is notraised. It is well settled that the question of classificationrelates to disputed question of facts and that cannot be decidedin the writ petition and the High ,Court while exercising itsjurisdiction under Article 226, should be very slow in interferingwith the fiscal statute. A Division Bench of this Court in WritAppeal No.771 of 2000 dated 19.07.2007 (The Superintendent ofCentral Excise, Range I "D" Division, Chennai and others vs. MayilMark Nilayam, A Partnership Firm rep. By its Managing Partner,Chennai) while allowing the appeal filed by the Department hasheld as follows:"4. Further, in respect of classification, in thecase of Assistant Commissioner of Sales Tax, Kerala vs.P.Kesavan & Co. reported in 1996(81) E.L.T.7 (S.C.),the Supreme Court affirmed its view that the revenueauthorities are in better position to seek andappreciate necessary evidence to determine whether aparticular product would fall under a particular entryor not and Courts ought not entertain the writ petitionson such issues and rather direct the writ petitioner toagitate their grievances before the statutoryauthorities even where sufficient evidence is placedbefore the writ court for an unambiguous conclusion upontechnical matters. Yet another decision of the SupremeCourt is in the case of State of Goa vs. Leukoplast(India) Ltd. Reported in 1997(92) E.L.T. 19 (S.C.). TheSupreme Court has decided that the writ jurisdiction notexercisable to decide disputed questions of fact such aswhether surgical dressings and bandages were "drugs ormedicines" for purposes of assessment of sales tax.Further the Supreme Court also has observed that theHigh court should not have allowed the assessees to by-pass statutory appellate remedies and entertain theirwrit petition. Another decision of the Supreme Court isin the case of Southern Engg. Industries vs.Superintendent of Central Excise reported in 1991 (52)E.L.T. 373 (Mad.) wherein the Supreme Court has held https://hcservices.ecourts.gov.in/hcservices/ that when statutory remedies are available, in a fiscalstatute, it is proper for the parties to seek suchremedies. 5. It is also well settled and establishedprinciple of law that in respect of a fiscal statute,the High Court shall seldom or very slow to entertain awrit petition unless or otherwise it is establishedbefore the Court that the action of the respondent isperverse and no prudent person would take such course.In the light of the above Judgements, we are of theconsidered view that whether the activity of theassessee could be regarded as a manufacture or not andwhether the product dealt with by the assessee wouldcome within a particular tariff entry or not is a matterto be considered by the authorities only and it cannotbe decided by means of an affidavit and counteraffidavit. The order impugned in the writ appeal ishereby set aside and the respondent is hereby giveneight weeks' time from the date of receipt of a copy ofthis order for giving reply to the show cause noticedated 26.06.1998 and thereupon the appellants aredirected to proceed further by following the due processof law and pass appropriate orders in accordance withlaw. The writ appeal is allowed. No costs.Consequently, connected miscellaneous petition isclosed.In view of the above said facts and on the basis that what isimpugned in this writ petition is a show cause notice, whichrequires factual assertion of material facts, I am of theconsidered view that the writ petition is not maintainable. Inview of the same, the writ petition fails and the same isdismissed. No costs. Connected miscellaneous petitions areclosed.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.kh https://hcservices.ecourts.gov.in/hcservices/ To1. The Commissioner of Central Excise No.1, Foulks Compound Anaimedu, Salem 636 001.2. The Directorate General of Central Excise, Intelligence, Chennai Zonal Unit, C-3, "C" Wing, "Rajaji Bhavan" Besant Nagar, Chennai 600 0090.1 cc to Mr.R.G. Narendiran, Advocate, Sr. 185441 cc to Mr. Velayutham Pichaiya, Advocate, SR. 18285 W.P.No.35544 of 2007 KG (CO)kk 4/4