Custom, Excise & Service Tax Tribunal
M/S Birla Corporation Ltd vs Commissioner Of Central Excise, Pune-I on 29 June, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. E/915/09 (Arising out of Order-in-Appeal No. P-I/VSK/113/2009 dated 30.4.2009 passed by the Commissioner of Central Excise (Appeals), Pune-I). For approval and signature: Honble Shri S.K. Gaule, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No 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 : Yes CESTAT (Procedure) Rules, 1982 for publication 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 Departmental : Yes authorities? ====================================================== M/s Birla Corporation Ltd. Appellant Vs. Commissioner of Central Excise, Pune-I Respondent Appearance: Ms. Anjali Hirawat Advocate for Appellant Shri A.K. Prabhakar JDR for Respondent CORAM: SHRI S.K. GAULE, MEMBER (TECHNICAL) Date of Hearing: 29.06.2011 Date of Decision: 29.06.2011 ORDER NO. WZB/MUM/2011 Per: S.K. Gaule
The appellant filed this appeal against the Order-in-Appeal No. P-I/VSK/113/2009 dated 30.4.2009 whereby the Commissioner (Appeals) has set aside the lower adjudicating authoritys order and remanded the case back to the lower adjudicating authority for re-examining the whole issue.
2. Briefly stated facts of the case are that the appellants are engaged in the manufacture of excisable goods namely Autorims falling under Chapter 87 of the Central Excise Tariff Act, 1985. They also availed CENVAT credit. The proceedings were initiated against them on the ground that they have availed CENVAT credit on defective capital goods and goods were not used in the factory of production. The above proceedings were confirmed by the lower authorities. The appellant challenged the same before the Tribunal and the Tribunal vide its order dated 5.11.2007 decided the case in favour of the appellant. Consequent upon this, the appellant filed a refund claim. The lower adjudicating authority sanctioned the refund claim of Rs.2,18,893/- through CENVAT credit since the reversed was made through CENVAT credit. The appellant challenged the same before the Commissioner (Appeals). The learned Commissioner (Appeals) remanded the matter to the lower adjudicating authority for de novo consideration. Hence, the appeal.
3. Both learned Counsel and learned JDR have agreed that the power of remand has been taken away from the Commissioner (Appeals) by amending Section 35A and in the light of decision of the Honble Supreme Court in the case of Mil India Ltd. Vs. Commissioner of Central Excise, Noida 2007 (210) ELT 188 (SC).
4. I have carefully considered the submissions and perused the records. The learned Commissioner (Appeals) in this case has recorded his findings as under:-
I find that in this case the original show-cause notice issued for recovery of CENVAT credit availed on defective capital goods on the premise that transit insurance for damages was claimed by the appellants. The department was of the view that in view of the fact that transit insurance was claimed for damage, the defective capital goods could not have been used in the factory of production. This is in turn made the appellants ineligible to avail CENVAT credit in terms of the eligibility criteria laid down in CENVAT Credit Rules. The original adjudicating authority allowed the refund but by way of credit in the CENVAT account in terms of the Tribunal order.
From perusal of the Tribunal Order, I find that the Honble Single Member Bench had allowed the availment of CENVAT credit without going into the eligibility criteria on the grounds that there was no legal provision at the time of the issue of the notice for recovery of CENVAT credit availed even if it was purportedly erroneously availed. In other words, the Tribunal had held that the notice had invoked provisions of erstwhile Rule 57I and 57U of the Central Excise Rules, 1944 which were not in vogue at the time of issue (in this case on 08.04.2000). Therefore, on this ground the Tribunal had opined that the recovery could not be made under the said provisions and consequently allowed availment of the CENVAT credit. I also find that the SDR in the case before the Tribunal had submitted that the provisions contained in the erstwhile Rule 57I and 57U were saved by the provisions of Section 38A of the Central Excise Act, 1944 even when the old Rules were superseded and substituted by the new MODVAT Rules. It is pertinent to mention that the MODVAT Rules were amended by Notfn. No. 11/2000-CE(NT) dated 01.03.2000. These rules were called the Central Excise (Second Amendment) Rules, 2000 and came into force with effect from 01.03.2000 and these rules were further amended by Notfn. No. 27/2000-CE(NT) dated 31.03.2000 and were effective from 01.04.2000. Both the changes discussed above were basically amendments carried out in exercise of powers conferred by Section 37 of the Central Excise Act, 1944. In other words, Rules 57A to 57J were substituted by Rule 57 AA to Rule 57AK by way of amendments in exercise of the powers conferred by Section 37 of the Central Excise Act. Section 38A of the Central Excise Act saved all amendments, repeal, supercession, and substitution of Rules. Therefore, assessees contention that the substitution of Rules was not saved by Section 38A is incorrect because this substitution was effected by way of amendment which is duly saved by Section 38A of the Central Excise Act, 1944. Therefore, I find that in this case the Honble Member of the Tribunal (Single Bench) while recording his finding has not considered the relevant provisions of law which was submitted before him and appears not to have taken cognizance of the same. The conclusion of the single Member that the recovery provisions under erstwhile Rules 57I and 57U were not saved under the new MODVAT Rules is contrary to the provisions of law. I, therefore find that this is a fit case to invoke the principle of SUB SILENTIO which was outlined by the Special Bench of the Tribunal in the case of CCE, Rajkot vs. Surgichem reported in 1987 (27) ELT 548 (Tribunal). I therefore relying on this principle, come to the conclusion that the judgment of the Honble Tribunal in this case, did not set a binding precedent as the recovery provisions under Rule 571 and 57U were available at the time of issue of notice by virtue of the saving clause under Section 38A of the Central Excise Act. The availment of credit on the defective capital goods would therefore have to be decided on the basis of the eligibility criteria. And, the learned Commissioner (Appeals) remanded the case to the lower adjudicating authority to examine the issue keeping in view the above directions.
5. The issue before the learned Commissioner (Appeals) was whether refund can be sanctioned through cash or by credit in CENVAT Credit account. However, instead of deciding the issue he sat over the Tribunals aforesaid order, which is clear form the above finding. It is no ones case that the department has challenged the said order at any stage. In case of any grievance against the said order, nothing prevented the department to approach the higher fora. It is pertinent that new argumentative novelty or submissions sparkling with creative ingenuity presented with high pressure advocacy cannot undo or compel reconsideration of the orders, if not challenged and reversed. The Commissioner (Appeals) remanded the case to the lower adjudicating authority unmindful to the fact that the power of remand of Commissioner (Appeals) has been taken away by the amendment of Section 35A of Central Excise Act, 1944 and Hon'ble Supreme Courts decision in the case of MIL India Ltd. (supra).
6. In view of the above, the order of the Commissioner (Appeals) is not sustainable as he has not appreciated the issue involved. Therefore, the issue requires reconsideration. Accordingly, I remand the case to the learned Commissioner (Appeals) to decide the case as per the show-cause notice issued in the case. Needless to say, that a reasonable opportunity of hearing should be given to both sides for presenting their case. Appeal is allowed by way of remand.
(Dictated and pronounced in Court) (S.K. Gaule) Member (Technical) Vks/ 1