Customs, Excise and Gold Tribunal - Mumbai
Larsen And Toubro Ltd. vs Commissioner Of Customs And Central ... on 13 March, 2000
Equivalent citations: 2000(69)ECC532, 2001(135)ELT344(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. These three appeals are proposed to be disposed for reasons given below, after waiving deposit.
2. Three appeals were filed by the appellant against the three orders of the Asstt. Commissioner denying Modvat credit on the ground that Central Excise invoice of which one was "pre-anthenticated, i.e. signature of designated officer bearer of the Company put on a blank invoice, as required by law, and the other two held to be items not capital goods within the meaning of Rule 57Q of the Central Excise Rules. The stay application was filed alongwith each appeal. The appellant was heard by the Commissioner (Appeals) on the stay applications. Subsequently an order on each of the appeals, came to be passed not by the Commissioner (Appeals), but by the Superintendent in the office, directing 35% of deposit in cash and execution of bank guarantee for the remaining amount. This order was not complied with. The assessee instead of depositing 35% in cash debited the Modvat account. The Commissioner thereupon dismissed the appeal for non-compliance with the provisions of Section 35F of the Act.
3. The ground taken before the Tribunal on appeal from this order by the assessee was that the stay application filed before the Commissioner had not been disposed of by the Commissioner but by the Superintendent. The Tribunal accepted the contention and remanded the matter to the Commissioner (Appeals) to considering afresh as also the stay application.
4. The Commissioner has now passed orders on the three stay applications, which were passed without hearing the appeal. He has asked for deposit of the entire amount. This was not complied with. He has therefore dismissed the appeals again not being complied with Section 35F of the Act.
5. The Commissioner's view expressed in each of his orders, each of which is identically worded from beginning to end except for the numbers of orders in original is that he was not required to give a hearing to the assessee before him disposing of the stay application in the light of the Supreme Court judgment in UOI v. Jesus Sales Corporation . He has however totally ignored the direction contained in that judgment that the opinion of the authority considering the stay application must be formed objectively on relevant considerations and its discretion must be exercised in a reasonable and rational manner taking into consideration relevant facts and circumstances of a particular case. Each of the Commissioner's order is remarkable. I have already said each of them is identically worded. Further none of them even touches upon a single aspect of the facts in issue. As I have indicated earlier, the issues in each appeal were different. Each stay application would require a separate consideration. It would be no exaggeration to say that the Commissioner's order, in the manner that it is phrased, could be used in any stay application before him. It also entirely ignores the fact that two-third of the revenue has been secured by bank guarantee. Each of the orders has been passed without any application of mind. Failure of pre-authentication of documents is prima facie in the facts of the case an insignificant procedural infraction. It has not been alleged the invoice in question was not issued by the person purported to have issued.
6. I therefore waive duty demanded and stay its recover. The bank guarantee executed in the case is to be discharged and returned to the applicant forthwith.
7. The question in the Appeal E/4387/99 is whether wires and cables and are capital goods within the meaning of Rule 57Q. The credit on the wires and cables was taken in Jan. 1996. The appellant's case would prima facie be covered by the decision of the Larger Bench of the Tribunal in Jawahar Mills v. CCE 1992 (32) ELT 379. The goods are used in the applicant's factory for distribution of electricity to various plants and machinery, which will not function without it. It is therefore difficult prima facie to say that they are not used for producing or processing in the goods or bringing about change in the substance. In my view the applicant has established a prima facie case and deposit of duty was not required and hereby waive the deposit of duty and recovery stayed. The bank guarantee executed withregard to this appeal also discharged and returned herewith.
8. The question in the third appeal is whether components of machinery used to grind cement clinker and coals are capital goods. Credit was taken in November 1996. By this time, Rule 57Q has been amended and specified the items of machinery which was to be considered capital goods. There was no requirement in the Rule, as it then stood, that the goods must be used for a particular purpose. It would then follow prima facie that as long as the items in question were specified in table to Sub-rule (1) they would be capital goods. The goods in question appear prima facie to be covered within the scope of Clause (d) of table to Rule 57Q(1), which specified components, spares and accessories and the goods specified against the previous items Clause (a) Clause (1) of explanation includes 84.71 is machinery inter alia for crushing, grinding mineral substance. I therefore accordingly waive duty demanded in this case too and stay its recovery.
9. While I am normally reluctant to comment on conduct of department officers, it would be unfair on the facts of this case not to do so. The appellant has already gone through two rounds of litigation and considerable expenses. With each of these rounds, expense to the department and avoidable inconvenience to its officers is also caused. These rounds could have been avoided if the Commissioner (Appeals) sufficiently applied his mind to the facts of the each case if not at the first time, failing that on the second round. The method of disposal of the Commissioner does not serve anybody's interest. Neither the appellant nor the department is benefited. The appellant is obviously put to inconvenience and difficulty there being a no decision on his appeal. The department is also put to difficulty. Passing orders without application of mind will result in a situation where an order which could be confirmed in favour of the department on merits is not so confirmed. Such disposal in short, serves no purpose except for purposes of statistics. It must be emphasized the office of Commissioner (Appeals) is one of great importance and significance and when assessees approach the Commissioner (Appeals), they come with the expectation of being heard with reasonable attention and patience and the matter dealt with by application of mind. It is to be hoped that this will be done when the matter goes back to the Commissioner (Appeals).
10. The Commissioner shall give the appellant reasonable opportunity of being heard and dispose of the appeal within three months from the receipt of this order.
11. This being the position, the appeals are allowed, and the impugned orders set aside. The Commissioner (Appeals) shall dispose of the appeal before him on merits without insisting on any deposit.