Custom, Excise & Service Tax Tribunal
Cce, Chennai vs M/S. Sree Vishnu Electronics on 9 September, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No. E/604/2002
(Arising out of Order-in-Appeal No. 96 & 97/2002 (M-II) dated 23.7.2002 passed by the Commissioner of Central Excise (Appeals), Chennai)
CCE, Chennai Appellant
Vs.
M/s. Sree Vishnu Electronics Respondents
Appearance Shri V.V. Hariharan, Jt. CDR for the Appellant Shri V. Balasubramanian, Advocate and Shri M. Somasundaram, Consultant for the Respondents CORAM Honble Dr. Chittaranjan Satapathy, Technical Member Honble Shri D.N. Panda, Judicial Member Date of Hearing: 09.09.2009 Date of Decision: 09.09.2009 Final Order No. ____________ Per Shri D. N. Panda Revenue has come in appeal against the order passed by the learned Commissioner (Appeals) allowing relief to the assessee on merits, waving penalty and interest levied under Section 11AC of the Central Excise Act, 1944 (hereinafter referred to as the Act) read with Rule 173Q, Rule 209A of the Central Excise Rules, 1944 and Section 11AB respectively.
2. Principal grievance of Revenue is that the learned Commissioner (Appeals) without having material to discard two sets of invoices maintained by the respondents causing prejudice to revenue proving clandestine removal of goods, entertained mere pleadings of respondent and allowed relief to them. He discarded the second set of invoices issued by the respondents recovered in the course of investigation and has also discarded the statement recorded under Section 14 of the Act. The statement recorded from proprietrix and chief executive of the respondent although were worth of evidence and such statement being recorded without any coercion or undue influence did not receive consideration of learned Commissioner (Appeals). Respondents argument weighed heavily before him for which he held that Revenue has failed to discharge onus of proof. There is not only an error of law but a grave injury caused to Revenue.
3. While grievance of Revenue was as above, the Respondents represented by the learned counsel Shri V. Balasubramaniam made a preliminary objection stating that appeal was filed by learned Chief Commissioner, without being the same filed by the respective Commissioner, that is not maintainable. According to him, an appeal under Section 35(2) of the Act can only be filed by a Commissioner. In absence of a proper appeal being filed, that is not maintainable. In support of his argument he relied on the following decisions:
(i) Commissioner of Customs, Chennai Vs. Biomed Hi-Tech Industries Ltd. 2009 (235) ELT 293 (Tri. Chennai)
(ii) Commissioner of Central Excise, Kolkata Vs. Naffar Chandra Jute Mills Ltd. 2008 (230) ELT 244 (Tri. Kolkata)
(iii) Commissioner of Central Excise, Mumbai Vs. Bombay Switchgear 2001 (134) ELT 658 (Tri. LB)
3. Assailing the arguments of the learned counsel on the above preliminary issue, learned Jt. CDR Shri V.V. Hariharan and Shri Agrawal submitted that a Chief Commissioner being a Central Excise officer is also entitled to exercise the powers of his subordinate in terms of Rule 3 of Central Excise Rules, 2002 and exercising such power the appeal under Section 35B(2) of the Act was filed by him, which is well within his domain of jurisdiction. They argued that Revenue cannot be denied to file an appeal by the Chief Commissioner when a Commissioner is subordinate to him and as a superior he is expressly given power by law to exercise the powers of his subordinate under him.
5. Aforesaid rival submissions of both sides, compelled us to go into details of Powers and Jurisdiction of the Authority filing the appeal. We noticed that Revenue has exercised its right of appeal duly and nothing malafide as to filing of appeal by the Chief Commissioner has been brought on record by the respondents to appreciate that a Commissioner was ousted to exercise his Jurisdiction and Power. It is only technicality of filing by a person is disputed by the Respondent. We have carefully looked into the provisions of Rule 3 of Central Excise Rules, 2002 and noticed that a Chief Commissioner is a statutory authority who has been, by express provision of law, permitted to exercise the power of the Commissioner by statute itself. Such express grant of statutory power may be well appreciated from the angle of removing hardship in the event of contingency. By the above Rule, Legislature has not permitted a subordinate to exercise the powers of a superior authority and that they have consciously not permitted. Intent and purpose of Rule 3 of the Central Excise Rules, 2002 sought to be achieved can be appreciated when provision of that Rule is read into the provision of Section 35B(2) of the Act to make the grant of express power effective. A Chief Commissioner thus can no way be less than a Commissioner by virtue of his hierarchical position and wisdom. Therefore, had there been any intention of the legislature to preclude a Chief Commissioner to exercise power of a Commissioner, they would have expressly barred exercise of such power by express provision of law. Reading of the text of the law as a whole no way leads us to notice that a Chief Commissioner is denuded of his powers to act as Commissioner to meet a contingency. Therefore, learned counsels reliance in the case of Biomed Hi-Tech Industries Ltd. (supra) does not provide any support since that decision was in a different context of Customs Act, 1962. Learned counsels reliance on para 32 of the decision in Naffar Chandra Jute Mills Ltd. (supra) case also does not help him since, by law, a Chief Commissioner is permitted to exercise powers of a Commissioner by Rule 3 of Central Excise Rules, 2002. There is no circumstance brought out by the learned counsel to say whether by provisions of Section 35B(2) of the Act, a Chief Commissioner was prevented to exercise power of a Commissioner, by law, for the purpose of that section. Further reliance by the respondent in the case of Bombay Switchgear (surpa), also does not come to its rescue in the absence of any malafide alleged. Remedy of appeal sought by Revenue clearly establishes that Union of India was conscious of its right of appeal to exercise the same through any of its officers without naming the Govt. In view of the aforesaid statutory sanction by law, Rule 3 of the Central Excise Rules, 2002 is to be read into Section 35B(2) of the Act to achieve the object sought to be achieved by that section. For the above reasons, there is no legal force to hold Revenues appeal is not maintainable. Even if the contention of the respondent is considered for a moment, the defect pointed out by the respondents is also a curable defect. When procedural defect in the course of appeal is challenged, that gives rise to a curable defect since remedy to appeal is substantial right to which is undeniable unless otherwise expressly bound by law. For no bar to appeal, present appeal is maintainable. Therefore, we hold that the respondents preliminary objection as to maintainability is unsustainable.
6. Learned Jt. CDR appearing on behalf of Revenue submits that when the matter was before the adjudicating authority that authority had examined the matter thoroughly and found appellants involvement in questionable clearance of the goods for which the demand was raised. But the learned lower appellate authority without properly appreciating the evidence on record went by the respondents submission only and allowed relief for no rhyme or reason. Without assigning any reason in support of his decision, he held that the adjudication proceeding was time-barred. But such submission of Revenue was repelled by the learned counsel for the Respondents on the ground that the learned lower appellate authority had properly examined the issue and considering relevant facts allowed the relief to the assessee. Further, Revenue has no ground to his effect in their appeal.
7. Heard both sides and perused the records.
8. We have noticed that learned adjudicating authority has examined plethora of evidence in pages 2 to 7 of the Order-in-Original and made his finding considering submissions of the assessee. Allegation of clearance of excisable goods using bogus (second/parallel) set of invoices of a dummy unit namely M/s. STT came to light during investigation and that was established according to scope and manner of examination in adjudication. Goods were also undervalued and cleared to M/s. TVS Electronics Ltd. Pleas raised by the Respondent before the adjudicating authority was not acceptable to him for no merits therein for which he held that the assessee failed to defend the main charge of clandestine removal, evading duty. He has also brought to record that the assessee has knowingly acted in defiance of law stating to be unaware of consequence thereof. Consequently, duty liability of the assessee was bound to arose with other consequences of law followed.
9. We are surprised to note how the learned Commissioner (Appeals) without evaluating the evidence on record, both oral and documentary, could safely rely on the submission of the assessee when evidence on record self-speak the nature of the allegation and gravity thereof. When Respondent stated that parallel set of documents were prepared by them for producing before bank to get bank loan, learned appellate authority has failed to examine veracity thereof and its impact on public revenue without testing such material with evidence on record. He presumed innocence of the Respondent. He proceeded on different aspects holding that there was no contrary evidence in relation to receipt of raw material, transport goods, version of buyers and correlation of stock. He further viewed that no statement was recoded from workers. All these suppositions enabled him to grant relief to the assessee. Precisely, we may state that weight of evidence on record was given go bye by the learned Commissioner (Appeals) with scanty regard to the principles of preponderance of probability.
10. The question of time-bar being a mixed question of fact and law, conduct of the assessee shall only decide its motive of evasion of duty to come to the decision on time-bar aspect. Once motive is determined, the time-bar is also determinable according to the ingredients of Section 11A of the Act.
11. Having noticed some of the legal infirmities in the order passed by the learned Commissioner (Appeals), as aforesaid, it would be proper to remit back the matter for reappraisal and evaluation of evidence giving regard to the weight of evidence, he shall come to rational conclusion. When governing facts and surrounding circumstances suggest fate of the fact, there is no question of any assumption or presumption which are sworn enemies of justice. Therefore, learned Commissioner (Appeals) after granting fair opportunity to both the sides shall properly consider weight of evidence and pleadings of both sides and pass a reasoned and speaking order on both the aspect of merit as well as on limitation issue, which have emanated from cause of action.
12. In the result, we remand the matter to the learned lower appellate authority to pass appropriate order in accordance with law. The appeal is allowed by way of remand.
(Reason of decision and the decision pronounced
in open court in the course of hearing)
(D. N. Panda) (Dr. Chittaranjan Satapathy)
Judicial Member Technical Member
Rex
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