Custom, Excise & Service Tax Tribunal
Xal Engineering (I) Pvt.Ltd vs Cce Mumbai - V on 18 January, 2019
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: E/1605/2010
[Arising out of Order-in-Original No: 125/04/V/2010/COMMR/KS
dated 3rd June 2010 passed by the Commissioner of Central Excise,
Mumbai - V.]
For approval and signature:
Hon'ble Shri C J Mathew, Member (Technical)
Hon'ble Shri Ajay Sharma, Member (Judicial)
1. Whether Press Reporters may be allowed to see the
Order for publication as per Rule 27 of the : Yes
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of
CESTAT (Procedure) Rules, 1982 for publication : Yes
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy
: Seen
of the Order?
4. Whether Order is to be circulated to the
: Yes
Departmental authorities?
XAL Engineering (I) Pvt Ltd ... Appellant
versus
Commissioner of Central Excise
Mumbai - V ...Respondent
Appearance:
Ms Anjali Hirawat and Shri Rajesh Ostwal, Advocates for appellant Shri S J Sahu and Shri Anil Choudhary, Assistant Commissioners (AR) for respondent E/1605/2010 2 CORAM:
Hon'ble Shri C J Mathew, Member (Technical) Hon'ble Shri Ajay Sharma, Member (Judicial) Date of hearing: 02/01/2019 Date of decision: 18/01/2019 ORDER NO: A/85137 / 2019 Per: C J Mathew In this appeal of M/s XAL Engineering (I) Pvt Ltd against order in original no. 125/04/V/2010/COMMR/KS dated 3rd June 2010 of Commissioner of Central Excise, Mumbai-V which has confirmed differential duty of central excise amounting to `13,17,479, along with applicable interest, and imposed penalty of like amount under section 11AC of Central Excise Act, 1944, it is contended that the terms of remand by Tribunal on the previous occasion, which was limited to determination of the utilisation of advance received from the customer, had been exceeded by the adjudicating authority.
2. Learned Counsel for appellant took us through the backdrop of the dispute relating to the advance secured from M/s Cipla Ltd for supply of machinery designed for its exclusive use. It is her submission that the appellant had not utilised this advance for any purpose and had appropriated the amount towards the payment due upon supply of machinery. Consequently, she contends that the E/1605/2010 3 notional interest that Revenue claims to be includable in the assessable value would not arise in the light of the affirmation of the Hon'ble Supreme Court to the decision of the Tribunal in Hero Honda Motors Ltd [2006 (205) ELT 1050 (Tri-Del)]. It was pointed out that the remand order of the Tribunal had been rendered on the submission of the appellant that they would be able to produce the evidence of such retention without utilisation and that the adjudicating authority, though required, in terms of the remand order, to merely evaluate the contents of the evidence, chose to extend the scope of the re- adjudication.
3. Learned Authorised Representative places reliance on the decision of the Tribunal in GAIL India Ltd v. Commissioner of Central Excise, Gwalior [2011 (264) ELT 393 (Tri-Del)] which has held that such certificates could corroborate, but only as supplement to, the main evidence that the appellant was obliged to furnish.
4. We take note that this dispute is before us for the second time and that, on the former occasion, the appellant had submitted that they would be able to establish, with certificate of Chartered Accountant, that the advance had not earned any, or indeed even notional, interest. On this submission, the Tribunal had directed the original authority to consider such certificate and decide the matter afresh. It is seen from the records that the appellant did produce the required certificate which, however, did not appear to be to the satisfaction of the E/1605/2010 4 adjudicating authority who directed them to furnish all the documents on the basis of which the Chartered Accountant had issued the said certificate. It also appears from the records that the appellant had failed to in this and had gone to the extent of placing the onus of obtaining of these documents on the adjudicating authority.
5. It is clear that the appellant had fulfilled the directions of the Tribunal. However, we cannot, in the light of the decision in re GAIL India Ltd, accept the contention of the appellant that the certificate would suffice for determination of the includability of notional interest on the advance in the assessable value. Whether the documents sought for by the adjudicating authority would have thrown light or would have enabled ascertainment of the correctness of the certificate issued by Chartered Accountant is not an issue to be resolved by us; such is also not the contention of the Learned Counsel. Having been directed to furnish those documents, it was incumbent upon the appellant to do so; only then could any adverse findings arising therefrom be resolved by us. As the adjudicating authority was unable to come to a conclusion based on the limited documentation furnished by the appellant and has rendered a finding that the remand order of the Tribunal could not be interpreted in such a narrow manner as to deny Revenue of its authority, and its obligation, to ascertain the elements that should comprise the assessable value, it is the appropriateness of that finding which concerns us.
E/1605/2010 5
6. According to the adjudicating authority, the certificate furnished by the Chartered Accountant contradicted the earlier submissions of the appellant; to arrive at this conclusion, he has referred not only to the reply to the show cause notice but also to the finding in the order that had been set aside by the Tribunal before remanding the matter back to the original authority. This reliance cannot be sustained in law as the decision to remand also included the erasure of the order impugned in that proceeding. A reference to such non-existent order vitiates the present order. The adjudicating authority is within his powers to accept or reject the contention of the certificate of the Chartered Accountant on the basis of available, or requisitioned, material. That would have been the conclusion of the adjudicating authority on applying his own mind. Borrowing from an erased order cannot be construed as proper application of mind.
7. For the above reason, we set aside the impugned order and direct the matter to be considered afresh by the adjudicating authority. Needless to say, the appellant should, in its own interest, provide such additional material sought for by the adjudicating authority.
8. Accordingly, we dispose of the appeal by remand.
(Pronounced in Court on 18/01/2019)
(Ajay Sharma) (C J Mathew)
Member (Judicial) Member (Technical)
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