Custom, Excise & Service Tax Tribunal
Kmf Automotive Private Ltd vs Commissioner Of Customs on 14 July, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH
CHENNAI
Appeal No.C/41082/2015
[Arising out of Order-in-Appeal No.177/2015 dt. 25.2.2015 passed by the Commissioner of Customs (Appeals-II), Chennai]
KMF Automotive Private Ltd. Appellant
Versus
Commissioner of Customs,
Chennai-III Respondent
Appearance:
Shri Harihara Kumar A.S. For the Appellant Shri M.Balamurugan, AC (AR) For the Respondent CORAM :
Honble Shri P.K. Choudhary, Judicial Member Honble Shri C.J. Mathew, Technical Member Date of hearing / decision : 14.07.2016 FINAL ORDER No.41139/2016 Per P.K. Choudhary The present appeal is filed against the order of the Commissioner of Customs (Appeals) wherein he has set aside the OIO dated 30.08.2007 passed by the Asst. Commissioner of Customs (SVB), Chennai and remanded the matter to that authority to revisit the issue afresh to pass necessary orders in de novo on determination of value on the imports made from related overseas firm. While remanding the case, the Commissioner (Appeals) has also directed the appellant to pay EDD at the equivalent of 1% of the invoice value and also directed the AC (SVB) to take into consideration the factual circumstances to conclude whether there is a condition of sale and nexus with the imported goods. Therefore, the appellant's appeal is limited only to the impugned order relating to 1% of EDD.
2. Ld. Advocate reiterated the grounds of appeal and submits that they have preferred appeal against the OIO and when the order is set aside and remanded denovo the Commissioner (Appeals) has no jurisdiction to direct the appellant to pay 1% EDD of the invoice value till the issue of denovo order. Under Section 128 A of the Act, the Commissioner (Appeals) has power to modify/annul/ remand with directions if any. He further submits that the directions can be limited to only on the proceedings and cannot order 1% EDD when the order was set aside and remanded to the adjudicating authority. He relied on the Hon'ble High Court Order in the case of Terumo Penpol Ltd. Vs. CC - 2015-TIOL-1423-HC-MAD-CUS, where the Hon'ble High Court has set aside that portion of the order directing 5% EDD. He also relied on the Hon'ble High Court Order in the case of National Oxygen Ltd., Vs. CC, Chennai - 2008 (231) ELT 410 (Mad.) = 2008-TIOL-368-HC-MAD-CUS. He submits that in the above case on identical issue the Hon'ble High Court held that while remanding the case to the lower authority, the Tribunal cannot impose any pre-condition. He submits that the same ruling applies to the Commissioner (Appeals) also.
3. Ld. D.R reiterates the impugned order.
4. After hearing both the sides, we find that the lower appellate authority in the impugned order set aside the OIO passed by the AC (SVB) and remanded the matter to the adjudicating authority to pass fresh orders for examining the case afresh on merits. The Commissioner (Appeals) has also directed the appellant to pay EDD at the equivalent of 1% of the invoice value till the issue of fresh orders. The limited issue in this appeal is whether the Commissioner (Appeals) while remanding the appeal has power to direct the lower authority to put pre-condition to decide the case in de novo. In this regard, we find that the Hon'ble High Court Order in the case of Terumo Penpol Ltd. (supra) and in the case of National Oxygen Ltd., (supra) on identical issue wherein Hon'ble High Court set aside the portion of the Commissioner (Appeals) order directing 1% EDD. The relevant portion of the Hon'ble High Court order in the case of Terumo Penpol Ltd. (supra) is reproduced below:-
"4. This Court although finds some merit in the argument advanced by the learned counsel for the respondents that there is an effective alternative remedy available, as provided under Section 129A of the Customs Act, the ultimate conclusion reached by the appellate Authority directing the petitioner to pay EDD equivalent to 5% of the Assessable value till the issue of the fresh order, in my considered opinion, is not maintainable for the reason that when the matter is remanded back to the file of the original authority, all the issues are to be adjudicated afresh, without being influenced by any of the observation. While so, viewing the impugned order, direction given to pay EDD equivalent to 5% of the assessable value, against the petitioner, in my view will prejudice the mind of the original authority while deciding the issue. Therefore, this Court, deleting only that portion of the order directing the petitioner to pay EDD equivalent to 5% of the assessable value, directs the adjudicating authority to determine the issue after giving reasonable opportunity to the petitioner.
The Hon'ble High Court Order in the case of National Oxygen Ltd. (supra) is reproduced below:-
16. The Tribunal by an elaborate order after discussing the issues raised before it recorded a finding that the appeal before it was a fit case for remitting back to the original authority. The basis for recording such a finding is also stated as that the order appealed against before it was not a speaking order; that it has not answered the plea raised by the appellant; and that it has not discussed the relevant material i.e., the Chartered Engineer's certificate to find out whether the price mentioned therein was the price in respect of machine manufactured in the year 1965 or 1994. After reaching such a conclusion, the only power that could be exercised by the Tribunal is, to refer the case back to the authority, which passed such decision or order with such direction as the appellate Tribunal may chink fit for afresh adjudication or decision, as the case may be, after taking additional evidence, if necessary. Rightly, in this case, certain directions were given by the Tribunal to the adjudicating authority how to proceed with the de novo adjudication as extracted in paragraph No.3 above. But the imposition of pre-condition for setting aside the order i.e., directing the appellant to deposit 50 per cent of the differential value on or before particular date is, in our view, not in accordance with the statutory provision. The statutory provision does not empower the Tribunal to impose such a condition for setting aside the order appealed and remit back to the adjudicating authority. It is needless to say that the Tribunal is a creation of the statute and it has to perform its function in accordance with the power conferred on it. Giving direction to the original authority while remitting back the matter is one thing to which it is empowered but imposing a pre-condition is a different thing with which no power has been vested with the Tribunal.
The above Hon'ble High Court Orders squarely applies to the facts of the present case as in this case the lower appellate authority has not decided the issue on merits but decided to remand the matter to the lower authority. While doing so, he has put the precondition of 5% EDD till the issue of fresh orders by the adjudicating authority. This amounts to imposing precondition which will prejudice the mind of adjudicating authority. The Ld. AR relying on the Tribunal's decision in the case Doosan Infracore India Pvt. Ltd. (supra) is not relevant to the facts of the present case, as the said order is only an interim order on different facts, where the Commissioner (Appeals) has decided the case on merits."
The above Hon'ble Madras High Court's order is also followed in the case of Sungwoo Hitech India Ltd. Vs CC Chennai 2016-TIOL-547-CESTAT-MAD.
6. By respectfully following the Hon'ble High Court's Orders above, we set aside that portion of the Commissioner (Appeals) order imposing 1% EDD. The appeal is allowed in the above terms.
(Operative part of the order pronounced
in open court on 14.07.2016)
(C.J. MATHEW) (P.K. CHOUDHARY)
TECHNICAL MEMBER JUDICIAL MEMBER
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