Custom, Excise & Service Tax Tribunal
M/S. Inox Air Products Ltd vs C.C.E. Ghaziabad on 30 July, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. II
Appeal No. E/58583/2013-EX(DB)
[Arising out of Order-in-Appeal No. 20/COMM/GZB/2007 dated 29.03.2007 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Ghaziabad].
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
Hon'ble Shri B. Ravichandran, 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?
M/s. Inox Air Products Ltd. .Appellants
Vs.
C.C.E. Ghaziabad .Respondent
Appearance:
Shri Somnath Shukla & Shri Alok Yadav, Advocate for the Appellants Shri Pramod Kumar, DR for the Respondent CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial) Hon'ble Shri B. Ravichandran, Member (Technical) Reserved on: 14.07.2015 Pronounced on: 30.07.2015 FINAL ORDER NO. 52366/2015-EX(DB) Per Ashok Jindal:
Appellants namely M/s. Inox Air Products are in appeal against the impugned order gist of which is reproduced here as under:
2. The facts of the case are that M/s. Rathi Ispat Ltd. (RIL) was issued a show cause notice dated 21.03.2000 for evasion of duty of Rs.2,67,00,348/- and proceedings were initiated against M/s. RIL and Shri Anil Rathi, Director thereof. An Adjudication order was passed on 29.03.2007 as stated in para 1 here in above. The said order was challenged by M/s. RIL before this Tribunal and the appeal filed against the impugned order was dismissed for non compliance of the provision of Section 35F of Central Excise Act 1944. The appellant have also challenged the impugned order on the premise that the appellant had entered with M/s. RIL in two lease agreement dated 17.12.2003 and 16.05.2003 for maintenance and operation of plant and equipments at the site of M/s. RIL, as dispute arose between M/s. RIL and appellant, the appellant suspended the maintenance activity on 22.08.2006. Thereafter, M/s. RIL on 29.08.2006 requested the appellant to remove plant and machinery installed therein and dispute between M/s. RIL and appellant continued. Therefore, the appellant filed a suit before Honble High Court of Delhi which was dismissed on 29.09.2006 on the grounds of lack of territorial jurisdiction. Against said order, an appeal was filed before the Division Bench of Honble High Court and Honble High Court vide order dated 16.03.2007 directed the parties to the suit to pursue for remedy as per arbitration clause in their lease agreement. In pursuant to that, the sole arbitrator was appointed and who vide order dated 05.09.2007 gave interim relief for sealing of said plant and machinery leased out to M/s. RIL. Thereafter, the appellant issued public notice on 07.11.2007 declaring its ownership over the plant and machinery. On 14.03.2012, the arbitration proceedings were finalized and it was held that appellant is entitled to remove plant and machinery leased out to M/s. RIL installed in factory thereon. On 30.09.2011, the appellant sought a meeting with the respondent and seek permission for removal of plant and machinery and also sent representation dated 18.11.2011 contending with the said plant and machinery which has been installed in the factory premises of M/s. RIL belongs to appellant and sought removal thereof. The respondent vide their letter dated 16.12.2012 inform that since the plant and machinery have been confiscated and their ownership rests with Government of India, therefore, request cannot be acceded to. The appellant further vide order dated 29.03.2012 asked the respondent to release plant and machinery within 10 days. Thereafter, the appellant filed a writ petition no. 630/2012 before the Honble High Court of Allahabad seeking release of plant and machinery. At that time, the appellant came to know that the show cause notice was issued to M/s. RIL have been adjudicated in 2007 and copy of the impugned order was served on the appellant on 29.05.2012. Thereafter, the Honble High Court vide order dated 05.04.2013 dismissed the writ petition relegating the petitioner to file the appeal against the order-in-original dated 29.03.2007 passed by Central Excise Commissioner before this Tribunal. Hence this appeal.
3. The Ld. Counsel for the appellant submits that they have filed this appeal as per the direction of the Honble High Court of Allahabad and are aggrieved person from the impugned order. It is also submitted that as per section 35 B of the Central Excise Act qua the appellant is a person aggrieved and have a right to challenge the impugned order before this Tribunal. Therefore, the appellant is having sufficient locus standi to approach before this Tribunal as an aggrieved person. To support this contention he relied on the decision of Northern Plastic Ltd. Vs. Hindustan Photo Films Mfg. Co. Ltd.-1997 (91) ELT 502 (SC) and in the case of Lubrizol India Pvt. Ltd. Vs. Designated Authority-2005 (187) ELT 402 (Tri-Del). He also submitted that as there is no dispute to the facts that the title of plant and machinery confiscated by the department pursuant to the impugned order from the premises of M/s. RIL in fact belong to the appellant. Even M/s. RIL has admitted the fact that the ownership of plant and machinery in question vests with the appellant. It is also submitted that the impugned order and subsequent confiscation of plant and machinery in question has jeopardized the proprietary interest of the appellant. This has caused legal injury. He also drew our attention to the findings of the Honble High Court of Allahabad in para 12 that of the impugned order directing confiscation does not exclude the plant and machinery owned by the appellant, clearly establish fact that the appellant though was not a party to the original proceedings of impugned order is clearly an aggrieved person since proprietary right qua plant and machinery has been affected by the impugned order. He further submits that without prejudice, this Tribunal order has jurisdiction to revisit the impugned order in it affects the right of the appellant being aggrieved third party. To support this contention he relied on the following decisions:
i. State of Madras Vs. Maurai Mills Co. Ltd.-AIR 1967 SC 681 ii. Kunhayammed Vs. State of Kerala-2001 (129) ELT 11 (SC) iii. Maruti Udyog Ltd. Vs. CCE-2002 (146) ELT 37 (SC) iv. Commissioner of Sales Tax Vs. Vijai International Udyog-AIR 1985 SC 109 v. CCE Vs. Ultratech Cement Co. Ltd.-2009 (236) ELT 480 (Tri) vi. CCE Vs. Nav Bharat Steel Re-rolling-2012 (285) ELT 529 (Tri) vii. Smt S. Kalawati Vs. DUrga Prasad & Anr.-AIR 1975 SC 1272 viii. Chandi Prasad and Ors Vs. Jagdish Prasad and Ors.-2004 (8) SCC 724 ix. Raja Mechanical Co. (P) Ltd. Vs. CCE Delhi-2012 (279) ELT 481 (SC) x. Kaizen Organics Pvt. Ltd. Vs. UOI-2013 (293) ELT 326 (Raj) xi. CIT Bombay Vs. Amritlal Bhogilal & Co.-AIR 1958 SC 868 xii. Rani Choudhary Vs. Lt. Col Suraj Jit Choudhary-AIR 1982 SC 1397 xiii. CIT Vs. Eurasia Publishing House (P) Ltd.-1998 232 ITR 381 (Del)
4. He further submits that plant and machinery belonging to the appellant cannot be confiscated but merely it lies in the possession of the defaulter at the time of confiscation relying on the decision of CCE Aurangabad Vs. Sant Eknath Rolling Mills Pvt. Ltd.-2008 (227) ELT (156) and Gaurishankar Amarchand Jalan Vs. CC-1990 (46) ELT 273 (Tri). He further submits that as per section 142 of the Act, read with Customs (Attachment of property of defaulters for Recovery of Government Dues) Rules 1995 and Circular No. 365/81/97-Central Excise dated 15.12.1997 only the property owner by defaulting party can be confiscated pursuing to the said provision. He further submits that post 2001 Rule 173Q of the Rules were amended, therefore, respondent no longer has power to confiscate the plant and machinery in the said Rule as per the decision of Kotak Mahindra Bank Ltd. Vs. District Magistrate-2011 (267) ELT 614 (Guj), in the case of Harish Lamba Vs. CCE Mumbai-2008 (227) ELT 286 (Tri-Mumbai), and in the case of Choice Ceramic Tiles Pvt. Ltd. Vs. CCE-2010 (258) ELT 283 (Tri-Ahmd). He further submits that impugned order is violation of principle of natural justice as plant and machinery belongs to the appellant and they have been confiscated without even been given notice or an opportunity to being heard to the appellants. Therefore, impugned order qua confiscation of the impugned goods be set aside.
5. On the other hand, Ld. AR oppose the contention of the Ld. Counsel and submits that the appellant is not aggrieved party from the impugned order and he was neither part of show cause notice nor participated in the proceedings before the lower authorities. Therefore, he has no locus standi to file the appeal before this Tribunal. He also submits that appeal of M/s. RIL has already been dismissed by this Tribunal. Therefore, the impugned order has merged with the order of this Tribunal. Moreover, appellant never sought to participate in the proceedings before the lower authorities. Therefore appeal is to be dismissed.
6. Heard the parties. Considered the submission.
7. In this case the appellant has challenged only part of the order that is reproduced here as under:
8. As per the impugned order the adjudicating authority has confiscated land, building, plant and machinery, material, etc of M/s. RIL used in connection with manufacture, production, storage, removal or disposal of impugned goods. From the order, nowhere the properties of the appellant have been confiscated. Only the properties which are owned by M/s. RIL have been confiscated. By filing this appeal, the appellant is claiming to be the owner of plant and machinery confiscated in the impugned order on the basis of the litigation between RIL and the appellant which was decided in arbitration on 14.03.2012, consequent to the arbitration proceedings, the appellant claims to be owner of the plant and machinery. The respondent are also claiming that said plant and machinery has been confiscated and there ownership rest with Government of India. Although this Tribunal has powers to entertain the appeals against the order passed by Commissioner of Central Excise / Commissioner (A) under Central Excise Act but this Tribunal has no jurisdiction to decide the ownership of the goods. Moreover, in the impugned order only plant and machinery owned by M/s. RIL has been confiscated. If appellant is claiming to be the owner of said plant and machinery it is a dispute of civil in nature and this Tribunal is not the proper forum to seek remedy for that. Moreover, it is the claim of the appellant in their written submission that they have approached to the respondent on 30.09.2011 first time to seek the permission of removal of its plant and machinery it is also a claim of the appellant that they were not knowing that any departmental proceedings are pending against RIL by issuance of the show cause notice dated 20.03.2000 which was adjudicated vide order dated 20.03.2007. When the proceedings of the respondent against M/s. RIL were not known to the appellant, question arises how the appellant came to know about the confiscation of the plant and machinery. Further, the appellant has written to the respondent to seek permission on 30.09.2011 why the appellant had not brought this fact in the knowledge of the Arbitrator. This act of the appellant creates doubts on the bonafides of the appellant. Therefore, the appellant has not come with clear hands. Further, during the course of arguments the Ld. AR has produced the letter to show that the dispute of ownership is pending before the Honble Apex Court in civil appeal no. 2196/2012 as the issue of ownership is seized with the Honble Apex Court, therefore, this Tribunal have no jurisdiction to decide the ownership of the impugned goods.
9. In these terms appeal filed by the appellant is dismissed.
(Order pronounced in the open court on 30.07.2015) (B. Ravichandran) (Ashok Jindal) Member (Technical) Member (Judicial) Bhanu 2 E/58583/2013-EX(DB)