Customs, Excise and Gold Tribunal - Tamil Nadu
Transformers And Electricals Kerala ... vs Collector Of Central Excise on 28 November, 1991
Equivalent citations: 1992(42)ECR168(TRI.-CHENNAI)
ORDER
V.P. Gulati, Member
1. E/Ref/Stay/423/91/MAS : Since we propose to dispose of the Reference Application itself today, we dismiss the stay application.
Transformer and Electricals Kerala Ltd. V. CCE Cochin E/Ref/86/91/MAS
2. This Reference Application arises out of the order of the Tribunal No. 132/1991 dated 14.2.1991. The facts of the case have been set out in detail in the order of the Tribunal. The following questions of law have been posed in the context of this order:
1. Whether on the facts and in the circumstances of the case and in the absence of any fixation of normal production under Rule 173E of the Central Excise Rules, 1944, the Collector had jurisdiction to estimate or was justified in estimating the production of laminates from CRGO sheets.
2. Whether there was sufficient evidence or materials on record to justify the finding of the Collector that the Company had produced and cleared more laminations than was revealed in its accounts and records.
3. Whether on the facts and in the circumstances of the case the Collector was justified in estimating the production of laminations from CRGO sheets based purely on theoretical weights and transformer designs.
4. Whether in any event the mere failure to account for CRGO sheets as alleged justified the assumption of unaccounted production and clearance of laminations.
5. Whether on the facts and in the circumstances of the case the imposition of penalty of Rs. One lakh upon the Company was legally justified.
6. Whether the demand of duty made by the Collector was barred by limitation in the facts and circumstances of the case.
3. The learned Advocate for the applicants pleaded that the Tribunal had remanded the matter for de novo adjudication with direction that the issue of CRGO sheets and the use of the same in the factory with reference to the factory records, wastage arising during the course of manufacture and accountal of the laminations etc. have to be taken into consideration. He pleaded that this could not be done unless the norms under Rule 173E of the Central Excise Rules had been fixed. He further pleaded the question of time bar also arises and the reference should be made on the point whether the demand was time barred. He, however, made no specific pleas as to on what facts the question of time bar could be considered. He stated that even though the question of time bar was not argued before the Tribunal nor any findings had been given, in terms of the ruling of the Judgment of the Supreme Court in the case of Commissioner of Income-tax, Bombay v. Scindia Steam Navigation Co. Ltd. a copy of which was filed, any question of law on point which could have a bearing on the outcome of the issue before the Tribunal could be raised even at the stage of reference.
4. Heard the learned SDR.
5. We observe that the applicants had manufactured transformers etc. to specific designs and copies of these designs as given by the management were taken into consideration by the Collector while arriving at his conclusion. He, however, had not taken all the relevant aspects before coming to his conclusion and the Tribunal had, therefore, remanded the matter. We observe that so far as Rule 173E is concerned it is an enabling provision under which the authorities can fix the quantum of production that can be considered as normal for a unit and in case there is any shortfall from this production, the assessees can be called upon to explain the shortfall and in case this shortfall is not accounted for to the satisfaction of the authorities the duty can be assessed on the best of Judgment based on the normal production. In fact what the Tribunal has ordered is on the lines of Rule 173E and the Collector has been directed to arrive at the applicants' production taking into account their factory records regarding issued of the raw material, the manufacturing process, wastage arising therefrom based on the records maintained in the factory, etc. We do not see how the applicants are prejudiced by the order of the Tribunal and how it is contrary to the provisions of Rule 173E. In any case Rule 173E, as mentioned earlier, is only an enabling provision and dows not debar from arriving at the applicants' production based on any other rational method taking into consideration the evidence available. The applicants have been charged with having removed clandestinely laminations and transformers and a basis exist for such a charge and the Tribunal has ordered for the reckoning of the production of the laminations and transformers based on the factory records and the use of the raw materials, etc. We, therefore, hold that no question of law in this context arises. In regard to the point of limitation, the learned Advocate cited the Judgment of the Supreme Court in the case of Commissioner of Income-tax, Bombay v. Scindia Steam Navigation Co. Ltd. . This Judgment was delivered by Their Lordships S.K. Das, J.L. Kapur, M. Hidayatullah, J.C. Shah and T.L. Venkatarama Aiyar. While Justice J.C. Shah has observed that a concrete question of law having a direct bearing on the rights and obligations of the parties which might be founded on the decision of the Tribunal was one which arose out of the order of the Tribunal even if it was not raised or argued before the Tribunal at the hearing of the appeal, whereas the other Hon'ble Judges have held in majority Judgment that when a question of law was neither raised before the Tribunal nor considered by it, it would not be a question arising out of its order notwithstanding that it might arise on the findings given by it. This majority view has been reiterated in the Judgment of the Supreme Court in the case of Commissioner of Gift-Tax, Bombay v. Smt. Kusumben D. Mahadevia and now the settled law is that a question of law can be said to arise out of the order of the Tribunal only if it is dealt with by the Tribunal or is raised before it though not decided by the Tribunal and a question of law not raised before the Tribunal and not dealt with by it in its order cannot be said to arise out of its order, even if on the facts of the case stated in the order the question fairly arises. Therefore the Judgment cited by the learned Advocate docs not advance the plea of the learned Advocate in regard to limitation as the plea was neither raised before the Tribunal nor was it considered by the Tribunal while passing the impugned order. Moreover no facts have been placed before us as to how the question of limitation in law arises for consideration. As it is no plea has been made before the Tribunal in this regard nor any facts have been brought on record in this regard. We, therefore, hold that no question of law arises for consideration of the plea of limitation. In the above view of the matter we dismiss the Reference Application.