Custom, Excise & Service Tax Tribunal
M/S Perfect Pottery Company (Madhya ... vs Cce, Indore on 5 March, 2010
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R. K. Puram, New Delhi. Date of hearing/decision: 05.03.2010 For approval and signature: Honble Shri Justice R.M.S. Khandeparkar, President Honble Shri Rakesh Kumar, 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. 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether Their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Excise Appeal No. 510 of 2007 [Arising out of Order-in-Original No. 53/COMMR/CEX/IND/2006 dated 17.11.2006 (19.10.2006) passed by the Commissioner of Central Excise, Indore]. M/s Perfect Pottery Company (Madhya Bharat) Limited Appellant Vs. CCE, Indore Respondent
AND Excise Appeal No. 511 of 2007 [Arising out of Order-in-Original No. 53/COMMR/CEX/IND/2006 dated 17.11.2006 (19.10.2006) passed by the Commissioner of Central Excise, Indore].
Sh. Mukund Das Maheshwari, Ex-Chairman
M/s Perfect Pottery Company (Madhya Bharat) Limited Appellant
Vs.
CCE, Indore Respondent
AND
Excise Appeal No. 512 of 2007
[Arising out of Order-in-Original No. 53/COMMR/CEX/IND/2006 dated 17.11.2006 (19.10.2006) passed by the Commissioner of Central Excise, Indore].
Smt. Chitra Devi, Managing Director M/s Perfect Pottery Company (Madhya Bharat) Limited Appellant Vs. CCE, Indore Respondent Appearance: Rep. by Sh. L.P. Asthana, Advocate for the appellants. Rep. by Sh. Anil Khanna, DR for the respondent. Coram: Honble Sh. Justice R.M.S. Khandeparkar, President Honble Sh. Rakesh Kumar, Member (Technical) Oral order No._____ Per: Shri Justice R.M.S. Khandeparkar:
Heard. Since the common questions of law and facts arise in all these three appeals, they were heard together and are being disposed of by this common order.
2. The appellants are manufacturer of stoneware and some other items having its manufacturing units at Ratlam. The appellants were availing the benefit of Notification No. 175/86-CE dated 01.03.1986 as amended and Notification No. 1/93-CE dated 28.02.93 and Notification No. 16/96-CE dated 01.04.1997 during the relevant period. There was dispute as to whether the product in the nature of stoneware were salt glazed or slip glazed and the same was answered by the adjudicating authority in favour of the Department and against the assessee. Being dissatisfied, the appellants had carried the matter in appeal before the Tribunal and the Tribunal by its order No. 130/36/06-Ex dated 09.12.2005 delivered in Appeal Nos. E/2299 to 2304/03 had set aside the order of the Commissioner in that regard and had remanded the matter for reconsideration with the following observations:-
9. Clearly, the adjudicating authority has not examined the dispute from all the relevant aspects and record. The report of the Central Glass and Ceramic Research Institute states that the experiment of coating with GERU suspension is not a satisfactory method as it does not give proper glaze to the surface. The Chemical Examiners opinion about the methods used for glazing would appear to be more theoretical than a finding as to what actually was carried out by the appellant in regard to the goods cleared as salt glazed. The Commissioner has also not considered the contemporary records about the manufacture, raw materials used and technology and machinery available with the appellant. As also the commercial identity (salt glazed or slip glazed) of the pipes cleared to various parties. In these circumstances, this issue is required to go back to the Commissioner for a detailed re-consideration.
3. The Commissioner by impugned order dated 07.10.2006 again answered the issue in favour of the Department and against the assessee and hence the present appeal.
4. Though the impugned order is sought to be challenged on various grounds, it is not necessary to address to all the grounds and suffice to refer to only two grounds namely failure on the part of the Commissioner to comply with the specific directions issued by the Tribunal while remanding the matter and secondly failure of the Commissioner to comply with the basic principles of natural justice.
5. Since the contention on behalf of the appellants are that the Tribunal by the said remand order had specifically directed the Commissioner to take into consideration all the contemporary records about manufacture of raw materials used by the appellants and the technology and the machinery available with the appellant and in that regard to examine the dispute from all relevant aspects and record, in order to enable the appellants to assist that adjudicating authority to comply with the said order, according to the appellants they had applied for inspection of the documents which were seized by the Revenue authorities in the course of the investigation, however, the same was unjustifiably rejected by the Commissioner.
6. Upon hearing the learned Advocate for the appellants and learned DR for the respondent and on perusal of the records it is seen that under letter dated 28.09.2006 the Department had clearly informed the appellants that the Commissioner had rejected their request for inspection of the said documents on the ground that the appellants have already submitted their reply to the show cause notice.
7. Once the matter was remanded by the Tribunal to the lower authority with the specific direction regarding the materials which are required to be considered while deciding the matter on remand, it was always necessary for the lower authority to comply with such direction in letter and spirit. The Tribunal having clearly observed that adjudicating authority was required to examine the dispute from all relevant aspects and records, the adjudicating authority in that regard had to consider all the contemporary records regarding the manufacture including the raw materials used by the manufacturer and the technology adopted in the process of manufacture as also the machinery available with the manufacturer. It was necessary for the adjudicating authority to ascertain the same by referring to the records. When the appellants themselves had asked for inspection of the documents in the custody of the authority in that regard so as to place the same before the adjudicating authority to assist such authority to decide the matter, it was but expected from the authority to allow the manufacturer to inspect such documents and to place them on record in the matter. Indeed the letter dated 28.09.2006 discloses total non-application of mind by the concerned authority while rejecting the request for inspection.
8. Merely because the assessee had filed his reply to the show cause notice, it could not have been said that he was not entitled to inspect the documents which are in custody of the Department pursuant to the seizure thereof. It is not the case that the documents were of some secret nature or that the inspection thereof would have prejudiced the public interest. Mere filing of the reply to the show cause notice can never be justification for rejection of request for inspection of the documents by the assessee.
9. In the case in hand, as already observed above, such inspection would have definitely helped to the Commissioner himself to comply with the direction issued by the Tribunal under order in remand. The remand order clearly directed the adjudicating authority to peruse all the records.
10. Perusal of the impugned order discloses the observation by the Commissioner as under:-
32. They had also submitted the copies of statements submitted to their Hqrs. regarding purchase of raw materials, which indicate that they had purchased salt required for salt glazing besides other materials. In this connection, it is found that they had neither raised this point at initial stage of investigation nor during the course of earlier adjudication proceedings. Had such details were available with them at the relevant point of time, they should have presented before the investigation agency. Therefore, in the circumstances of the case, the possibility of recasting of record cannot be ruled out. They had also not submitted any documentary evidence regarding literature of machinery/ kiln used for the manufacture of salt glazed stoneware pipes. Hence, this plea of the Noticee fails.
33. At last the Noticee in their defence relied upon the final order No. 42/2001-D dated 29.01.2001 of Honble Tribunal in the case of M/s Perfect Stoneware Pipes Jabalpur vs. CCE Bhopal, wherein the Tribunal held that stoneware pipes of Chapter 69 were not slip glazed pipes and were actually salt glazed pipes with exemption from duty vide Notification No. 37/97-CE. In this connection, I have gone through the said order of the tribunal and observed that the ratio of the same cannot be applied to the present case, as the facts of the present case are distinguishable from that case. In the case of M/s Perfect Stoneware Pipes Jabalpur, the samples tested by the Chemical Examiner, Central Revenue Control Laboratory, New Delhi was found to be salt glazed. However, in the instant case of the noticee, the samples were reported to be slip glazed stoneware pipes. Further, the locations of both the units are different as one is situated at Jabalpur while other is at Ratlam. Therefore, the use of raw material, machinery etc may differ in both the units. In view of this, I am unable to accept the plea of the noticee.
34. The noticee have also submitted that the classification list submitted by them claiming exemption on A.R. Bricks as clay bricks and salt glazed stoneware pipes, were duty approved by the Department. They had not suppressed any facts or made willful misstatement. Therefore demand dated 10.12.97 proposing demand of duty relating to period 12/92 to 8/97 is barred by limitation. This plea of the Noticee is not acceptable in view of the fact that they had not declared the critical raw material used in the manufacture of stoneware pipes in their declarations from the department and Department had not opportunity to verify the claim of the Noticee. In the present scenario of economic liberty, it is always believed and expected from the assessee to give true and correct information, which they failed to do so. The fact of manufacture of slip-glazed stoneware pipes were came to the knowledge when a visit of the officer of the Anti-Evasion was made and sample was drawn and tested. Therefore, the charge of suppression of facts stands.
35. From the discussion as above, it can easily be concluded that the stoneware pipes which were manufactured and cleared, as salt glazed stoneware pipes were infact slip glazed which were removed under the guise of salt glazed. Since, the Noticee No. 3 had suppressed and mis-declared the facts and availed benefit of exemption Notification that in fact was not available to them. Therefore, the duty not paid on the slip Glazed stoneware pipes is, therefore, correctly recoverable from the Noticee No. 3 M/s Perfect Sanitary Wares, Ratlam, in terms of proviso to section 11A(ii) of the Central Excise Act, 1944.
11. Perusal of the above paras discloses that on the one hand the Commissioner has blamed the appellants for failure to produce the documentary evidence and at the same time the same authority had refused inspection of the documents which were seized by the Department from the appellants. This clearly discloses on the one hand non application of mind to the matter in issue, and on the other hand denial of the principles of natural justice to the party.
12. As already observed above, the directions under remand order was specific to the effect that the matter was required to be decided after taking into consideration all the relevant aspects and records. The impugned order does not disclose consideration of all the records. Furthermore, there is denial of opportunity to the assessee to point out even the documents which are in the custody of the respondent. On this ground itself, the impugned order is to be set aside and matter required to be remanded to the Commissioner for reconsideration thereof after taking into consideration all the materials on record and after allowing the party to take inspection of the documents seized from the assessee.
13. The appeals are accordingly allowed with the above directions. Considering the fact that the matter relates to the period from 1992-97, the Commissioner shall expedite the disposal of the hearing and the appellants are expected to give necessary co-operation in that regard. In any case, matter should be disposed of on or before 31.12.2010 and compliance report of this direction should be filed in the Registry of CESTAT in the first fortnight of January 2011 which shall be placed before the Tribunal for an appropriate order if any on receipt of such record. The appeals are accordingly disposed of.
[Justice R.M.S. Khandeparkar] President [Rakesh Kumar] Member [Technical] /Pant/ ??
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