Gauhati High Court
The Commissioner Of Central Excise And ... vs M/S S C Johnson Products Private Limited on 12 November, 2025
Author: M. Zothankhuma
Bench: Michael Zothankhuma
Page No.# 1/11
GAHC010027432025
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THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : C.Ex.App./1/2025
THE COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX
GUWAHATI, NOW THE PRINCIPAL COMMISSIONER, CGST AND CENTRAL
EXCISE, GUWAHATI, GST BHAWAN,KEDAR
ROAD,MACHKHOWA,GUWAHATI, ASSAM781001
VERSUS
M/S S C JOHNSON PRODUCTS PRIVATE LIMITED
UNIT 06, DAGNO.13KA, BAMUNIMAIDAM, INDUSTRIAL AREA, GUWAHATI
781021 ASSAM
Advocate for the Petitioner : MR. S C KEYAL,
Advocate for the Respondent : MR. S SHARMA, MS. P TALUKDAR
Linked Case : C.Ex.App./2/2025
COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX
(NOW THE PRINCIPAL COMMISSIONER)
GUWAHATI
SETHI TRUST BUILDING
5TH FLOOR
G.S. ROAD
BHANGAGARH
GUWAHATI-781005.
VERSUS
M/S. S.C. JOHNSON PRODUCTS PRIVATE LIMITED
UNIT-4
L-27
BONDA INDUSTRIAL ESTATE
Page No.# 2/11
VILL.- BONDA
NARENGI
GUWAHATI-781026.
------------
Advocate for : MR. S C KEYAL
Advocate for : MR. S SHARMA appearing for M/S. S.C. JOHNSON PRODUCTS
PRIVATE LIMITED
BEFORE
HONOURABLE MR. JUSTICE MICHAEL ZOTHANKHUMA
HONOURABLE MRS. JUSTICE MITALI THAKURIA
ORDER
12.11.2025
(M. Zothankhuma, J)
1. Heard Mr. S.C. Keyal, learned counsel for the appellants in both the
appeals. Also heard Mr. D. Sen, learned counsel for the respondents in both the
appeals.
2. The 2 (two) appeals are being decided by this common order.
3. The two appeals have been filed by the Commissioner of Central Excise
& Service Tax against the impugned common judgment and order passed by the
Hon'ble CESTAT, Kolkata, vide Final orders No. 76556-76557 of 2024 dated
06/08/2024 concerning Excise Appeal No. 71476/2013 and 71477/2013.
4. The issue is with regard to whether the respondents are eligible to be
given the special rate of value addition for their manufactured products, in
terms of the Area Based Exemption granted under Notification No. 32/99-CE
dated 08/07/1999, as amended by Notification No. 17/2008-CE dated
27/03/2008 and Notification No. 31/2008-CE dated 10/06/2008 ( hereinafter
referred to as the Exemption Notifications).
5. The respondent, in both cases is M/S. S.C. Johnson Products Private
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Limited, a manufacturer of 'Mosquito Repellents' and 'Cleaning Preparations'
having Unit-IV and Unit-VI in Dag No. 13KA, Bamunimaidam Industrial Area,
Guwahati, Assam.
6. The appellant's contention revolves around the issue of fixation of the
special value addition rate for the financial year 2010-2011, inasmuch as, the
learned CESTAT, vide the above impugned order, had held that the methodology
for arriving at the sale value from the audited Financial Statements of the
respondent company, by apportioning the same to the respective Units on the
basis of stock transfer ratio had been correctly done and the special rate of
value addition had been fixed as per the Exemption Notifications.
7. The learned CESTAT, Kolkata thereafter set aside the original orders of
the Commissioner dated 20.06.2013 in relation to Unit-IV and Unit-VI. The
learned Commissioner had rejected the respondent's application for fixation of
special rate representing the actual value addition under the Exemption
Notifications.
8. The respondent's Unit-IV and Unit-VI thereafter filed two separate
appeals before the Hon'ble CESTAT, Kolkata. Excise Appeal No. 71476/2013
pertained to Unit-IV and Excise Appeal No.71477/2013 pertained to Unit-VI.
9. The learned counsel for the appellants submits that the special rate of
value addition, as provided in the Exemption Notifications, required separate
applications to be made by the respondent company. Instead, the respondent
company had submitted a consolidated application for the two different Units,
for availing the exemption benefits provided in the Exemption Notifications.
10. The learned counsel for the appellants has also raised three Substantial
Questions of Law, which are as follows :
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1. Whether the Appellate Tribunal was legally correct, in holding that the
issue involved in these appeal is as to whether fixation of special rate
can be rejected merely because the sale value is arrived at from the
audited financial statements of the company by appropriating the same
to respective units in the basis of their stock transfer ratio or not?
2. Whether the appellate Tribunal was legally correct, in holding that the
issue is no longer res-integra as this Tribunal has decided the same
issue in the case of M/s Hindustan Unilever Ltd. V Commissioner of
Central Excise & Service Tax, Dibrugarh (2023 (10) TMI-CESTAT,
Kolkata?
3. Whether the Appellate Tribunal was legally correct, under the facts
and circumstances of the case, in holding that the methodology for
arriving at the sale value from the audited financial statements of the
company by appropriating the same to the respective units on the basis
of stock transfer ratio has been accepted and special rate has been
fixed accordingly?
11. The learned counsel for the respondent company, on the other hand
submits that a bare perusal of the orders of the Commissioner dated 20.06.2013
relating to Unit-IV and Unit-VI clearly shows that separate applications had been
submitted by the respondent, for grant of special rate of value addition in terms
of the Exemption Notifications.
12. The learned counsel for the respondent further submits that the present
two appeals are not maintainable, on account of Section 35G of the Central
Excise Act, 1944, (hereinafter referred to as "the CEA 1944"), as the issue
pertains to a question having a relation to the value of goods for the purpose of
assessment. He thus submits that the issue raised in the present appeals will
have to be agitated/lie directly to the Hon'ble Supreme Court under Section 35L
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of the CEA, 1944, as the issue pertains to the quantum of exemption available
to the respondent company under the Exemption Notifications.
13. The learned counsel for the respondent further submits that the
proposed Substantial Question of Law Nos.1 & 3, have a relation to the issue of
the quantum of exemption available to the respondent company under the
Exemption Notifications and as such, Section 35G and 35L of the CEA, 1944
would apply. With respect to the Substantial Question of Law No.2, he submits
that when the appellant has not annexed a copy of the said order or produced
the same in the Court today, he has got no comments to make on the same.
However, there does not appear to be any infirmity with the Hon'ble CESTAT
following a covered matter, as it is bound by judicial discipline to follow a
decision of a Coordinate Bench. He however submits that the earlier decision of
the Ld. CESTAT, as provided in Substantial Question of Law No.2, cannot
override the provisions of Section 35G and 35L of the CEA, 1944.
14. We have heard the learned counsels for the parties.
15. Section 35G and 35L of the CEA, 1944 are reproduced hereinbelow as
follows:-
"35G. Appeal to High Court. - (1) An appeal shall lie to the High Court
from every order passed in appeal by the Appellate Tribunal on or after the
1st day of July, 2003 (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 purposes of assessment), if the High Court is
satisfied that the case involves a substantial question of law.
(2) The[Principal Commissioner of Central Excise or Commissioner of Central
Excise] or the other party aggrieved by any order passed by the Appellate
Tribunal may file an appeal to the High Court and such appeal under this
sub-section shall be -
(a) filed within one hundred and eighty days from the date on which
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the order appealed against is received by the [Principal Commissioner
of Central Excise or Commissioner of Central Excise] or the
other party;
(b) accompanied by a fee of two hundred rupees where such appeal is
filed by the other party;
(c) in the form of a memorandum of appeal precisely stating therein
the substantial question of law involved.
[(2A) The High Court may admit an appeal after the expiry of the period of
one hundred and eighty days referred to in clause (a) of sub-section (2), if it
is satisfied that there was sufficient cause for not filing the same within that
period.]
(3) Where the High Court is satisfied that a substantial question of law is
involved in any case, it shall formulate that question.
(4) The appeal shall be heard only on the question so formulated, and the
respondents shall, at the hearing of the appeal, be allowed to argue that the
case does not involve such question :
Provided that nothing in this sub-section shall be deemed to take away or
abridge the power of the Court to hear, for reasons to be recorded, the
appeal on any other substantial question of law not formulated by it, if it is
satisfied that the case involves such question.
(5) The High Court shall decide the question of law so formulated and deliver
such judgment thereon containing the grounds on which such decision is
founded and may award such cost as it deems fit.
(6) The High Court may determine any issue which -
(a) has not been determined by the Appellate Tribunal; or
(b) has been wrongly determined by the Appellate Tribunal, by reason
of a decision on such question of law as is referred to in sub-section
(1).
(7) When an appeal has been filed before the High Court, it shall be heard
by a bench of not less than two Judges of the High Court, and shall be
decided in accordance with the opinion of such Judges or of the majority, if
any, of such Judges.
(8) Where there is no such majority, the Judges shall state the point of law
upon which they differ and the case shall, then, be heard upon that point
only by one or more of the other Judges of the High Court and such point
shall be decided according to the opinion of the majority of the Judges who
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have heard the case including those who first heard it.
(9) Save as otherwise provided in this Act, the provisions of the Code of Civil
Procedure, 1908 (5 of 1908), relating to appeals to the High Court shall, as
far as may be, apply in the case of appeals under this section.]"
"35L. Appeal to the Supreme Court -[(1)]An appeal shall lie to the Supreme
Court from -
[(a) any judgment of the High Court delivered -
(i) in an appeal made under section 35G; or
(ii) on a reference made under section 35G by the Appellate Tribunal
before the 1stday of July, 2003;
(iii) on a reference made under section 35H,
in any case which, on its own motion or on an oral application made by or on
behalf of the party aggrieved, immediately after passing of the judgment, the High
Court certifies to be a fit one for appeal to the Supreme Court; or].
(b) any order passed [before the establishment of the National Tax Tribunal] by
the Appellate 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.
[(2) For the purposes of this Chapter, the determination of any question having a
relation to the rate of duty shall include the determination of taxability
or excisability of goods for the purpose of assessment.]"
16. As is abundantly clear in the above two provisions of law, an order which
is relatable to the determination on the question having a relation to the rate of
duty of excise or to the value of goods for the purpose of assessment, would
have to be decided by the Hon'ble Supreme Court, as an appeal with regard to
the said issue cannot be decided by the High Court. The present issue raised by
the appellant pertains to grant of rate of exemption in terms of the Exemption
Notifications. When the issue at hand relates to an order passed in appeal by
the Hon'ble CESTAT in relation to determination of a question having a relation
to the value of goods for rate of value addition, we are of the opinion that the
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said order of the Appellate Tribunal would be governed by Section 35G and 35L
of the CEA, 1944. The rejection of the respondent's application by the
Commissioner was on the ground that the sale value used by the respondents
for determining the value addition was not actual, but estimated through
internal apportionment and that in the absence of actual sale values attributable
to individual Units, the real extent of value addition could not be accurately
determined. The Commissioner had accordingly concluded that the conditions
necessary for fixation of a special rate of value addition had not been fulfilled.
The same had been put to challenge before the Hon'ble CESTAT. The learned
CESTAT had however opined otherwise in respect of the claim for special rate of
value addition by the respondents.
17. The stand of the appellants is that the learned CESTAT had erred in
allowing the appeals, despite the lack of actual unit wise sale data, which was
essential for calculating the true value addition and determining eligibility under
the Exemption Notifications. On a consideration of the issues that have been
raised before the Commissioner and the learned CESTAT, we find that the issue
pertains to the exemptions pertaining to the rate of value addition, in terms of
the Exemption Notifications. As such, we are of the view that the impugned
order being a determination of a question having relation to the rate of value of
goods for the purpose of assessment, the present appeals are not maintainable
before this Court, in terms of Section 35G and 35L of the CEA, 1944.
18. In the case of Commissioner of Customs, Bangalore-I vs.
Motorola India Limited, reported in (2019) 9 SCC 563, the Supreme Court,
while considering Section 130 and 130E of the Customs Act, 1962 (prior to its
amendment by the Finance Act, 2018), which is in pari materia to Section 35G
and 35L of the CEA, 1944, has held at paragraph 11 and 18, as follows :
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"11. Upon a conjoint reading of the aforesaid provisions, it could thus be
seen that an appeal shall lie to the High Court against every order passed
in appeal by the Appellate Tribunal, if the High Court is satisfied that the
case involves a substantial question of law. The only exception carved out
is that an appeal shall lie before this Court and shall not lie before the
High Court against the order relating, amongst other things, to the
determination of any question having relation to the rate of duty of
customs or to the value of goods for the purposes of assessment.
18. We are of the considered view that the legislature has carved out
only following categories of cases to which it has intended to give a
special treatment of providing an appeal directly to this Court.
"(i) determination of a question relating to a rate of duty;
(ii) determination of a question relating to the valuation of goods for
the purpose of assessment;
(iii) determination of a question relating to the classification of
goods under the Tariff and whether or not they are covered by an
exemption notification;
(iv) whether the value of goods for purposes of assessment should
be enhanced or reduced having regard to certain matters that the
said Act provides for."
19. In the case of Commissioner of Central Excise, Customs and
Service Tax, Siliguri vs. M/s Zydus Healthcare, reported in 2025(5) TMI
62, the Sikkim High Court was seized of a matter in which the learned CESTAT
had held that the respondent was entitled to special rate of value addition
@73.5%, which was based on the actual value of the cost of raw materials and
inventory reflected in the audited financial statement. The Commissioner of
Central Excise, Customs and Service Tax, on the other hand was of the view
that the decision of the learned CESTAT was incorrect and bad in law. The
Sikkim High Court held that it had no jurisdiction to entertain, try and determine
the issue relating to an order which related among other things, to the
determination of any question having a relation to the rate of duty of excise or
Page No.# 10/11
to the value of goods for the purpose of assessment, in view of Section 35G(1)
of the CEA, 1944.
20. In the case of Commissioner of Central GST & Central Excise,
Jammu vs. Sun Pharma Laboratories Limited, reported in 2019 (12) TMI
229, the Jammu and Kashmir High Court was ceased of an issue involving
interpretation of the Exemption Notifications which would have an effect or
valuation of goods for the purpose of levy of duty. The Jammu and Kashmir
High Court thereafter held that the issue involving interpretation of the
Exemption Notifications which would have an effect or valuation of goods for
the purpose of levy of duty would not be maintainable in the High Court in view
of Section 35G of the CEA, 1944, as the question of exemption was directly or
proximately related to the rate of duty for the purpose of assessment of excise
duty payable by the assessee. The Jammu and Kashmir High Court, after
considering the decision of the Supreme Court in Navin Chemicals MFG and
Trading Co. Ltd. Vs. Collector of Customs [1993 (68) ELT 3(SC)] and
decision of the Division Bench of Uttarakhand High Court in the case of
Commissioner of Central Excise & ST vs. Tirupati LPG Industries Ltd.
reported in 2017 (351) ELT 149 (Uttarakhand) had held in paragraph
20 of the said judgment, as follows :
"20. From the above referred judgments, it is evident that the consistent
opinion of the Courts is that the dispute, as to whether or not the
assessee is covered by the exemption notification, relates directly or
proximately to the rate of duty applicable thereto for the purpose of
assessment, hence, High Court will not have jurisdiction to entertain
appeal pertaining to that, it being in exclusive jurisdiction of Hon'ble the
Supreme Court."
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21. On considering the fact that the issue herein pertains to whether the
special rate of value addition could be granted to the respondent in terms of the
Notifications, we are in respectful agreement with the decision of the other High
Courts that the issue raised in these appeals cannot be decided by us. Further, it
is seen that the respondent had been given exemptions by way of the
Exemption Notifications for the year 2009-2010 by the Commissioner, by using
the same methodology for claiming the said exemptions. However, the same
was denied for the year 2010-2011.
22. With regard to Substantial Questions of Law formulated by the
appellants, we find that the Substantial Question of Law Nos.1 & 3 is directly
and proximately related to the determination of a question having a relation to
the value of the goods for the purpose of assessment. With regard to the
Substantial Question of Law No.2, the learned counsel for the appellant has not
produced the said judgment stated therein, i.e. M/s Hindustan Unilever Ltd.
vs. Commissioner of Central Excise & Service Tax, Dibrugarh , reported
in 2023 (10) TMI-CESTAT, Kolkata, even though these appeals have been
listed before this Court on seven earlier occasions. In any event we are of the
view that the present appeals are not maintainable, as the issue raised attracts
Section 35G and 35L of the CEA, 1944.
23. In view of the reasons stated above, the appeals are not maintainable
before this Court. The same are accordingly dismissed.
JUDGE JUDGE
Comparing Assistant
