Customs, Excise and Gold Tribunal - Mumbai
Reliance Industries Ltd. vs Commissioner Of Central Excise on 4 October, 2006
ORDER Archana Wadhwa, Member (J)
1. After hearing both sides duly represented by Shri J.C. Patel, Id. Advocate and Shri P.K. Katiyar, Id. SDR, it is seen that the Commissioner (Appeals) has not doubted the correctness of the impugned order of the Assistant Commissioner, on merits. He has, however, set aside the same and remanded it to the original adjudicating authority on the sole ground that since there was an audit objection, the adjudicating authority should not have decided the issue and should have kept it pending till the audit objection is resolved.
2. Being aggrieved with the said order, the appellant has preferred the present appeal.
3. For better appreciation, I re-produce the relevant portion of the impugned order of the Commissioner (Appeals).
I have gone through the case records and considered the contentions raised in the appeal and cross-objections. The only contention of the Revenue in the appeal is that as per the CBEC Circular dated 14-12-95 and 30-3-98, the matter should not have been adjudicated and kept pending in the call book. The authorities working under CBEC are bound by the instructions issued by the CBEC and in this sense, the impugned order does not suffer from any infirmity. However, the Assistant Commissioner was also bound by the Circulars dated 14-12-95 and 30-3-98 requiring him to keep the issue pending in the call book. On this limited ground, the impugned order is set aside with direction to re-adjudicate the case after finalisation of the audit objection.
4. As is clear from the above, there is no dispute on merits i.e. the appellants entitlement to benefit of Modvat credit in respect of the capital goods. Ld. Advocate has submitted that in a subsequent Circular No. 674/65/2002-C.X., dated 1-11-2002, the Board has observed that no show cause notices should be issued on the basis of CERA objection, which are contrary to the Board's Circulars/instructions. As such, it is the appellant's contention that inasmuch as the CERA objection was admittedly against the Board's instructions on the point of availability of Modvat credit, there was no requirement to keep the matter pending in call book.
5. I fully agree with the above contention of the Id. Advocate. Board's in its subsequent Circular dated 1-11-2002 has observed as under :
The matter has been re-examined by the Board. It is observed that the field formations continue to issue protective demands on the basis of the objections raised by CERA which are contrary to Board's circulars instructions (not issued under Section 37B). Since the settlement of audit objection takes time, the protective demands go on piling up. In this regard, it is the consistent view of the Apex Court Collector of Central Excise, Patna v. Usha Martin Industries that the instructions/circulars too have legal backing as these are part of the technical junctions which are performed under the statute by Board. Therefore, the raising of protective demands contrary to Board's circulars/instructions shows inherent inconsistency. The Apex Court has also held in the case of Ranadey Micronutrients v. Collector of Central Excise that "...Consistency and discipline are of far greater importance than the winning or losing of Court proceedings" . In view of above, it has become imperative to modify earlier instructions on the subject. Accordingly, it has been decided that wherever Board's instructions or circulars (whether issued under Section 37B or not) exist on a particular issue, no protective demands should be raised on the basis of CERA objection if the objection is contrary to such Board's instructions or circulars.
6. Inasmuch as the matter stands settled, in favour of the appellants on merits, the Commissioner (Appeals)'s view that the matter should have been kept pending, is contrary to the above circular, which even debars raising of demands on the basis of CERA objection, which are contrary to the Board's Circular. As such, I set aside the impugned order and restore the order of the Assistant Commissioner. The appeal is allowed in above terms.
(Dictated in Court)