Punjab-Haryana High Court
Commissioner Of Customs vs Jyoti Industries Ltd. on 17 September, 2004
Equivalent citations: 2004(174)ELT315(P&H)
Author: N.K. Sud
Bench: N.K. Sud, S.S. Grewal
ORDER N.K. Sud, J.
1. Revenue has filed this reference application under Section 130A of the Customs Act, 1962, seeking a direction to the Customs, Excise and Gold (Control) Appellate Tribunal (for short "the Tribunal") to refer the following questions of law, arising out of its order dated 24-11-2000, for the opinion of this Court :-
"(i) Whether a misinterpretation of fact which is also an error apparent from the record is not covered Under Section 129B(2) of the Customs Act, 1962?
(ii) Whether such facts which the Appellate Tribunal has failed to appreciate but apparent from record and brought to its notice for rectification/correction fall within the purview of Section 129B(2) ibid?"
2. Assessee was issued two show cause notices dated 4-3-1995 and 27-3-1995 demanding duty of Rs. 12,51,783/- on the ground that it had wrongly claimed the benefit of Notification No. 34/88 in respect of BE No. 243 dated 19-9-1994. Another show cause notice dated 22-8-1995 was issued demanding a duty of Rs. 12,01,228/- on account of misdeclaration of the description of goods in respect of BE No. 82 dated 26-5-1994. Assessee furnished replies to both the show cause notices. After considering the replies, the Commissioner of Customs vide his order dated 25-11-1997 issued on 15-1-1998 accepted the explanation about charge of misdeclaration in BE No. 82 and dropped the proceedings in respect thereof. However, he confirmed the demand of duty for Rs. 12,51,783/- in respect of BE No. 243. Both the Revenue as well as the assessee filed cross appeals before the Tribunal. Revenue's appeal was directed against the dropping of proceedings for misdeclaration in BE No. 82 whereas the assessee's appeal was against the confirmation of demand of Rs. 12,51,783/- in respect of BE No. 243. During the pendency of the appeals, the assessee made a declaration under the Kar Vivadh Samadhan Scheme (for short "the KVSS") by filing a declaration under Section 89 of the Finance (No. 2) Act, 1998 in respect of disputed demand of Rs. 12,51,783/-. On the basis of the same, the Designated Authority issued certificate dated 6-11-1998 under Section 92 of the Finance (No. 2) Act, 1998.
3. The assessee's appeal before the Tribunal was disposed of vide order dated 4-1-1999. The Tribunal took note of the statement of the Counsel for the assessee that since it had paid the determined amount in terms of the KVSS, the appeal stood automatically elapsed. When the Revenue's appeal came up for hearing before the Tribunal, no one appeared on behalf of the assessee. However, a letter was filed on its behalf s'tating therein that the matter had already been settled under the KVSS and, as such, the appeal was liable to be dismissed as in-fructuous. On the basis of this letter, the Tribunal dismissed the appeal as infructuous vide order dated 29-10-1999.
4. Against the order of the Tribunal dated 29-10-1999, the Revenue moved an application for rectification pointing out that its appeal had been wrongly dismissed as infructuous as the dispute raised in the said appeal was not covered by the declaration made by the assessee under the KVSS. It was explained that the declaration pertained to the demand of Rs. 12,51,783/- which was in dispute in assessee's appeal whereas in the Revenue's appeal, the dispute related to the demand of Rs. 12,01,228/- in respect of BE No. 82 dated 26-5-1994.
5. The Tribunal rejected the said application vide order dated 24-11-2000 holding that there was no mistake apparent from the record as the issue raised by the Revenue involved an elaborate process of arguments.
6. It is in this backdrop of the factual position that we have to consider the present petition.
7. A perusal of the order of the Tribunal dated 29-10-1999 dismissing the Revenue's appeal as infructuous shows that it had decided the matter merely on the basis of the letter of the assessee without making any verification from the record. Even when in the rectification application, it was brought to the notice of the Tribunal that the declaration filed by the assessee pertained only to demand of Rs. 12,51,783/- in respect of BE No. 243 and not to the demand of Rs. 12,01,228/- in respect of BE No. 82, which was in dispute in the Revenue's appeal, the Tribunal did not make any attempt to verify the factual position.
8. Since the Tribunal had failed to verify the facts from the record, we directed the Counsel for the assessee to submit a chronological list of events leading to the filing of the present petition. From the list submitted by the Counsel for the assessee, the following factual position emerges :-
(i) Two show cause notices dated 4-3-1995 and 27-3-1995 were issued to the assessee alleging that it had wrongly availed the benefit of Notification No. 34/88 in respect of BE No. 243 dated 19-9-1994 and, therefore, it was proposed to demand duty of Rs. 12,51,783/- on account of short levy under Section 28 of the Customs Act, 1962.
(ii) Another show cause notice dated 22-8-1995 was issued in respect of BE No. 82 dated 26-5-1994 alleging misdeclaration of description of goods and, accordingly, duty of Rs. 12,01,228/- was demanded.
(iii) The Commissioner of Customs vide his order dated 25-11-1997 issued on 15-1-1998 accepted the explanation of the assessee in respect of charge of misdescription of goods in respect of BE No. 82 dated 26-5-1994 and dropped the proceedings in respect thereof. However, he confirmed the demand of Rs. 12,51,783/- in respect of BE No. 243 dated 19-9-1994.
(iv) The assessee filed an appeal against the order of the Tribunal on 13-4-1998 against the demand of Rs. 12,51,783/- and consequential penalty and interest, etc. Revenue also filed an appeal against the dropping of proceedings in respect of BE No. 82 against which demand of Rs. 12,01,228/- had been created.
(v) During the pendency of the appeal before the Tribunal, the assessee filed a declaration under the KVSS on 11-9-1998 in respect of disputed demand of Rs. 12,51,783/- against which the appeal was pending before the Tribunal.
9. It is, therefore, clear that, the declaration filed by the assessee under the KVSS pertained to the duty of Rs. 12,51,783/- only demanded in respect of BE No. 243 dated 19-9-1994. Had the declaration pertained lo both the bills, the disputed demand would have been shown at Rs. 24,53,011/- (Rs. 12,51,783/- + Rs. 12,01,228/-).
10. It is, thus, clear that the declaration pertained only to BE No. 243 dated 19-9-1994 whereby duty of Rs. 12,51,783/- was demanded. Even otherwise, as per the original KVSS, there was no provision for making a declaration in respect of the amount disputed in the departmental appeal. It was only after the Delhi High Court vide its judgment dated 17-11-1998 [1998 (104) E.L.T. 595 (Del.)] had struck down the proviso to Clause 92 that the Board had issued a press release dated 26-11-1998 extending the benefit of the KVSS to the disputes raised by the department before the various appellate authorities. Thus, the declaration filed by the assessee on 11-9-1998 could not possibly have pertained to the departmental appeal. It is true that in column No, 2 of Para 5 of the declaration form, a reference has been given to show cause notices in respect of both the bills. However, from the other columns, as discussed above, it is clear that the declaration pertained only to levy of duty of Rs. 12,51,783/- in respect of BE No. 243 dated 19-9-1994.
11. In view of the above factual position, it is clear that the Tribunal, which is the final fact finding authority, had not bothered to verify the factual position even when it was being vehemently contended before it that the declaration pertained to only one notice and not to two notices.
12. We are, therefore, satisfied that the Tribunal was not justified in rejecting the application for rectification moved by the Revenue. It has been wrongly observed that there was no mistake apparent from the record or that an elaborate process of arguments was required to see whether the declaration pertained to one bill or two bills. We are, therefore, satisfied that the present petition deserves to succeed.
13. Accordingly, we hold that the questions of law proposed by the Revenue arise out of the order of the Tribunal dated 24-11-2000.
14. Normally, we would have directed the Tribunal to draw up a statement of the case and refer the aforesaid questions for the opinion of this Court. But, according to us, that would only entail unnecessary litigation and expenditure and also wastage of time. The only point for determination in the rectification application was as to whether the declaration filed by the assessee under the KVSS pertained to one bill or two bills. We have already made verification from the record and find that the declaration pertained to only demand of Rs. 12,51,783/- in respect of BE No. 243 dated 19-9-1994. We, therefore, proceed to answer the questions at this stage itself.
15. In view of the above, we hold that there was a mistake apparent from the record in the order of the Tribunal dated 29-10-1999 in dismissing the appeal on the ground that the dispute raised in that appeal had already been settled under the KVSS. Accordingly, the Tribunal was not justified in rejecting the application of the Revenue for rectification of the said order. Both the questions are, accordingly, answered in favour of the Revenue and against the assessee. The net result would be that the Tribunal's orders dated 24-11-2000 and 29-10-1999 shall stand vacated and the appeal of the Revenue will stand restored to it for final disposal.
16. Parties, through their Counsel, are directed to appear before the Tribunal on 25-10-2004, for further proceedings in the matter.