By TIOL News Service

CHENNAI, SEPT 19, 2016: THE appellant is engaged in the manufacture of Nylon Filament Yarn, falling under Chapter 54 of the Central Excise Tariff Act, 1985. During the relevant period, the appellant, manufacturing and clearing Nylon Filament Yarn, with low tenacity, claimed exemption, under Central Excise Notification No.08/1996 dated 23.07.1996. Based on the test report, the exemption was denied and duty was demanded. The appeal filed by the assessee was rejected by the CESTAT. Hence, this appeal.

The respondent raised a preliminary objection with regard to the maintainability of the instant appeal, in view of the bar under Section 35G of Central Excise Act 1944. It was contended that mere perusal of the substantial questions of law, would clearly show that the appellant has raised questions of law pertaining to the claim of exemption, under the Exemption Notification. However, as per Section 35G of the Act, an appeal to High Court shall lie, provided it is not an order relating among other things, to the determination of any question relating to the rate of duty of excise or to the value of goods for purposes of assessment and therefore, instant appeal is not maintainable.

After hearing both sides, the High Court held:

++ Section 35G makes it clear that an appeal to High Court shall lie, provided it 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 purpose of assessment. In the instant appeal, the issue relates to the claim for exemption under the exemption notification, whether applicable to the appellant or not. The conditions in the notification for the tolerance limit of nylon yarn have not been fulfilled by the appellant. Therefore, any dispute relating to rate of duty, cannot be decided under Section 35G of the Act.

++ The second limb of contention of the appellant, as the appeal is pending for a period of 10 years, the same need not be dismissed, for want of jurisdiction now. If the Court proceeds with the merits of the case, having no jurisdiction to entertain an appeal, then the judgment passed by this Court, would amount to nullity.

++ Principles of law has been settled in various decisions, by the Hon'ble Apex Court, as well as this Court that where there is a lack of inherent jurisdiction of the Court, the decree is then said to be a 'nullity'. Hence, the contention of the appellant that the instant appeal can be entertained, since it is pending before this Court, for a period of ten years is not acceptable. Further, the substantial questions of law raised by the appellant relates to the rate of duty. In view of the above, the substantial questions of law framed in the instant appeal, with regard to the maintainability of the instant appeal under Section 35G of the Central Excise Act, 1944, is answered against the appellant.

(See 2016-TIOL-2155-HC-MAD-CX)