Custom, Excise & Service Tax Tribunal
Mumbai V vs Domino S Pizza (I) Ltd on 6 September, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: E/3051/2006
[Arising out of Order-in-Appeal No: CPA(620-624)77-81/MV/2006 dated 6th July 2006 passed by the Commissioner of Central Excise (Appeals), Mumbai Zone I.]
For approval and signature:
Honble Shri Ramesh Nair, Member (Judicial)
Honble Shri C J Mathew, Member (Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
No
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Commissioner of Central Excise
Mumbai V
Appellant
versus
Dominos Pizza (I) Ltd
Respondent
Appearance:
Shri, Advocate for the appellant Shri, Superintendent Commissioner (AR) for the respondent CORAM:
Honble Shri Ramesh Nair, Member (Judicial) Honble Shri C J Mathew, Member (Technical) Date of hearing: 06/09/2016 Date of decision: 05/01/2017 ORDER NO: ____________________________ Per: C J Mathew:
This is a peculiar dispute reminiscent of enforcement activism on the part eager officers appointed under the Central Excise Act, 1944 that was so rampant many decades ago. Notice was issued to outlets of M/s Dominos Pizza India Ltd at Vile Parle, Lokhandwala, Malad and Esselworld for alleged evasion of central excise duty on the alleged manufacture of pizzas at these outlets. The thrust of the case was that heading no 2001 10 and 1601 10 of the Schedule to the Central Excise Tariff, 1985 is a precise description of the food served at these outlets of M/s Dominos Pizza India Ltd and, these being put up in unit containers, are chargeable to duty owing to note in section IV; and that the use of the brand name Dominos on all the containers would deprive them of the benefit of small-scale exemption rendering each of the outlets to be liable to duty. The demand was restricted to non-vegetarian pizzas and chicago wings which, being preparations of meat (1601 10) were dutiable at 16% during the period from 2000-10 to 2004-05 with preparations of vegetables (2001 10) and preparation of sauces (2103 10) not being subject to effective rate of nil. Owing to the dutiability of only some of the many offerings at each outlet and their lack of systemic capacity to isolate the value of dutiable goods, data of the Vile Parle outlet for April 2005 was made available. Further, overall sale pattern of the various offerings as a proportion of total sale was also produced; according to these 22.03% of sales was of non-vegetarian pizza and 0.71% was of chicago wings and, by applying this proportion to the total sales of each of the outlets, the duty allegedly evaded was computed at Rs 38,50,044.
2. In adjudication by the original authority, it was held that non-vegetarian pizzas, comprising, as they do, of meat less than 20% by weight, is also classifiable under heading 1905 90 and not under heading 200110 as alleged in the notice. Likewise, vegetarian pizzas were also held to be classifiable under heading1905 90. The adjudicating authority held that chicago wings are classifiable under heading 1601 10. Holding that cheesy dip and jalapeno dip being repacked, and hence deemed to be manufactured at retail store, were liable to duty also under heading 2103 10, total duty of ` 1,20,602 was ordered to be recovered, with interest thereon, and penalty of Rs 1,20,602 was imposed under section 11AC of Central Excise Act, 1944. Penalty was also imposed on Shri Ravi Shankar Gupta.
3. In appeal, the matter was remanded back to the original authority pointing out various flaws in the adjudication order. In short, the credibility of the findings was questioned as careful consideration of the various submissions that could lead to a different classification of the three items did not appear to have been undertaken, the submissions on the actual process of making smaller packs was not examined and the adoption of total value of sales appeared to be unreliable owing to the sales being primarily of home deliveries.
4. Learned Authorized Representative urged us to decide the matter on the lines suggested by the competent Committee of Commissioners. He placed reliance on the decision of the Tribunal in Commissioner of Central Excise, Goa v. Costa & Co Pvt Ltd [2004 (173) ELT 394 (Tri-Mumbai)], Surya Agro Oils Ltd v. Commissioner of Central Excise, Indore [2000 (116) ELT 514 (Tribunal)] and of the Honble Supreme Court in Collector of Central Excise, Hyderabad v. Bakelite Hylam Ltd [1997 (91) ELT 13 (SC)].
5. Undoubtedly, the decisions cited by Learned Authorized Representative lay down important principles and should necessarily be considered when the merit of classification and dutiability are in question. However, a perusal of the grounds of appeal filed by Revenue shows it to be entirely about acceptance of the submissions made to the first appellate authority and does not question the authority of the first appellate authority to remand the matter. A remand order does not imply acceptance of the contention of assessee but is a direction to pass an order after taking into consideration various aspects pointed out by the appellate authority. In the absence of jeopardy to interests of Revenue and in the face of the specific observations on the unreliability of data adopted to compute duty liability, the remand cannot be objected to. Further, duties of central excise are assessed on goods that are manufactured; the value adopted for such levy of duty has not only to be enunciated unambiguously but such assessment is required to conform to section 4 of Central Excise Act, 1944 and the rules framed to enable such valuation. The original authority is conspicuously silent on this.
6. The appeal also errs in questioning the invalidation of the computation of assessable value on the ground of fresh evidence having been brought to bear which is alleged to be in contravention of rule 5(1) of Central Excise (Appeals) Rules, 2001. While the respondent may, indeed, have led fresh evidence before the appellate authority, the finding in the impugned order flows from perceptible non-compliance with section 4 which is a legal issue that can be raised at any time. We do not find any impropriety in the impugned order.
7. The maintainability of this appeal must also be discussed. The value in dispute is less than the threshold of Rs 10,00,000 prescribed in the instruction of 17th December 2015 issued in F No 390/Misc/163/2010-JC of Government of India in Department of Revenue. By instruction dated 1st January 2016, the said threshold was made applicable to pending appeals. Much as Learned Authorized Representative contends that the dispute pertains to classification, which is excluded for implementation of the above instruction, we cannot concur with that proposition.
8. The appeal is against the remand ordered by the first appellate authority; that authority has not settled the classification dispute but has merely directed that the classification needs to be considered afresh along with other aspects such as valuation. The exclusion of classification from the instruction to withdraw pending appeal is intended to ensure that discriminatory treatment is not meted out in applying the appropriate rate of duty. Remand does not open up such a possibility and, hence, the issue before us is the propriety of the remand which is not excluded from applicability of the new litigation policy.
9. In view of the above, we find no merit in the appeal and dismiss it.
(Pronounced in Court on 05/01/2017) (Ramesh Nair) Member (Judicial) (C J Mathew) Member (Technical) */as 6 2