Customs, Excise and Gold Tribunal - Delhi
Commissioner Of C. Ex. vs Mangalam Cement Limited on 13 October, 2000
Equivalent citations: 2001(128)ELT258(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. The Revenue has filed one ROM and one reference application for making a refert nee stating that a point of law arises. Both ROM and Reference application were heard together and are disposed of by this common order.
2. The facts of the case are that the respondent s herein are engaged in the manufacture of different products. They are availing the credit of duty taken on the inputs and capital goods under Modvat srheme. The department alleged that in respect of certain inputs and capital goods Modvat credit was not admissible to the respondents. The respondents represented before the Asst. Commissioner who disallowed the Modvat crecit on certain items and ordered for recovery thereof under Rule 57-1 for inputs, and under Rule 57U for capital goods. Being aggrieved by this order of the Asst. Commissioner, the respondents filed appeals before the Commissioner (Appeals). The Commissioner (Appeals) held that the cases decided by the Asst. Commissioner were beyond his competence as Modvat credit involved in these cases was above Rs. 50,000/-. Against this order of the Commissioner (Appeals), the respondents filed appeals before the Tribunal. The Tribunal under :ts final order No. A/83-85/98-NB dated 29-1-98 dismissed the appeals holding that the Asstt. Commissioner has powers to adjudicate cases involving duty of excise without limit. For so holding the Tribunal had relied on Noting ation Nos. 8-CX dated 2-9-44 and 93/59 dated 28-11-59. The Revenue has, therefore contended that a point of law arises. The point of law formulated is 'Whether the Tribunal's observations regarding Board's Circular No. 3/92-CX. 6 dated 14-5-92 amending the powers of adjudication with regard to the proviso to Section 11A in cases of fraud, suppression etc. which did not curtail any powers of the Assistant Commissioner for adjudication as envisaged in the Board's Instructions F. No. 267/104/87-CX. 8 dated 15-12-87 is correct?"
3. Under Rules 57-1 and 57U, the proper officer may within six months from the date of irregular credit, serve notion upon the manufacturer and after considering the representation, if any, mad 2 by the manufacturer or the assessee, on whom the notice is served, shall determine the amount of credit disallowed. However as per Rule 2(14) of the (jlentral Excise Rules, 1944, "proper officer" means the officer in whose jurisdiction, the land or premises of the producer of any excisable goods, or of any pei son engaged in any process of production of, or trade in such goods, or containers thereof, whether as a grower, curer, wholesale dealer, broker or commission agent, or manufacturer, or intended grower, curer, wholesale dealer, broker, commission agent or manufacturer are situated. In the instant case the factory of the respondents falls within the jurisdiction of the Asst. Commissiorier, Kota, therefore, under Rule 2(14), the Asst Commissioner, Koto is the proper officer to decide the notices issued for the recovery of irregular credit taken under Rule 57-1 for inputs and under Rule 57U for capital goods.
4. Rule 4 of the Central Excise Rules, 1944 provides that the CBEC shall appoint such person as it thinks fit to be a central excise officer, or to exercise all, or any of the powers conferred by the Central Excise Rules, 1944 on such officer.
5. Rule 5 provided that the Commissioner of Central Excise may authorise any officer subordinate to him to exercise throughout his jurisdiction or in any specified area therein all or any of the powers of the Commissioner under Central Excise Rules, 1944.
6. The CBEC vide their letter R No. 267/104/87-CX-8 dated 15-12-87 decided mat all SCNs for disallowing Modvat credit, except in the cases, where Modvat credit is wrongly availed with an intent to evade excise duty, would be decided by the Asst. Commissioner.
7. The Jaipur Commissionerate's Instruction No. 73/95-CE (17-MOD), issued under F. No. IV (10) 51/Policy/95 dated 21-7-95 has further clarified that the SCN in the normal course under Rule 57-1 and 57U of the Central Excise Rules, 1944 shall be issued and adjudicated by the jurisdictional Asst. Commissioner except where the credit has been taken on account of suppression of facts, wilful mis-statement etc.
8. It was, therefore contended by the Revenue that the Asst. Commissioner, Kota had not exceeded his jurisdiction in deciding the cases. It was also contended that there are conflicting decisions of the Tribunal in some cases it has been held that the Asst. Commissioner has unlimited power for disallowance of Modvat credit under Rule 57-1 and 57U whereas in some other cases, it has been held that he cannot exceed his power as enumerated in Board's Circular No. 3/92, dated 14-5-92.
9. Heard the submissions of the ld. JDR for the applicant. None is present for the respondents. On careful consideration of the submissions made and explanation furnished in the reference application, we find that there are conflicting decisions of the Tribunal. We, therefore hold that a point of law arises. In the circumstances, we allow the reference application.
10. We have also examined the ROM application. We find that there is no mistake in the order of the Tribunal and, therefore ROM application is rejected.
11. The matter is, therefore referred to the Hon'ble Rajasthan High Court at Jaipur for its considered view on the question of the 'Tribunal's observations regarding Board's Circular No. 3/92 dated 15-5-1992 amending the powers of adjudication with regard to the proviso to Section 11A in cases of fraud, suppression, etc. which did not curtail any powers of the Asst. Commissioner for adjudication as envisaged in the Board's Instructions F. No. 267/104/87-CX. 8, dated 15-12-87 is correct."