Custom, Excise & Service Tax Tribunal
) M/S. Nalari Ferro Alloys Pvt. Ltd vs Commr. Of Central Excise, Shillong on 3 November, 2015
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EAST REGIONAL BENCH : KOLKATA
Excise Appeal Nos. : E/649,650,651,652,653/2010
(Arising out of the Order-in-Original No. 05/SR/2010 dated-07/06/2010, (M/s.Nalari Ferro Alloys), 04/SR/2010 dated-02/06/2010 (Satyam Alloys), 06/SR/2010 dated 28/06/2010 (Jai Kamakhya Alloys Pvt. Ltd. ), 07/SR/2010 dated 09/07/2010 (Khasi Alloys Pvt. Ltd.) 03/SR/2010 dated 02/06/2010 (Bimala Ispat & Alloys (P) Ltd.) passed by the Commissioner of Central Excise, Shillong)
For approval and signature of:
DR. D.M. MISRA, HONBLE JUDICIAL MEMBER
SHRI H.K. THAKUR, HONBLE TECHNICAL MEMBER
======================================================
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 ?
1) M/s. Nalari Ferro Alloys Pvt. Ltd.
2) M/s. Satyam Alloys
3) M/s. Jai Kamakhya Alloys Pvt. Ltd.
4) M/s. Khasi Alloys Pvt. Ltd.
5) M/s. Bimala Ispat & Alloys (P) Ltd.
APPELLANT(S)
VERSUS
Commr. of Central Excise, Shillong
RESPONDENT(S)
APPEARANCE
Sri Nihar Dasgupta, Advocate &
Miss Paulami Sikdar, Advocate
FOR APPELLANT(S)
Sri K. Choudhari, Supdt. (A.R.)
FOR THE RESPONDENT(S)
CORAM:
DR. D.M. MISRA, HONBLE JUDICIAL MEMBER
SHRI H.K. THAKUR, HONBLE TECHNICAL MEMBER
DATE OF HEARING & DECISION : 03/11/2015
ORDER NO : ..
Per DR. D.M. MISRA
1. These Appeals are filed against respective Orders-in-Original passed by the Commissioner of Central Excise, Shillong by the afore-mentioned Appellants. Since the issue involved is common in all these Appeals, these are taken up together for hearing and disposal.
2. Briefly stated facts of the case are that the Appellants are engaged in the manufacture of excisable goods having their factory situated in the North-Eastern Region. They have claimed benefit of exemption Notification No.32/99-CE dated 08.07.1999, as amended. In claiming the exemption, the above-mentioned Appellants, filed necessary Applications with the Commissioner of Central Excise involving delay from the due date ranging from 82(eighty two) days to 176(one hundred and seventy six) days as recorded in the respective Orders-in-Original, mentioned below:-
Sl.
No. Appeal No. Name of the Assessee Scheduled date for submission of claim as per Notification Date of receipt of balance sheet and the certificate from the statutory Auditor to Com. Office Total number of days delay Date of commencement of commercial production
1.
EA-649/10 M/s.Nalary Ferro Alloys Pvt.Ltd.
30.09.2009 25.03.2010 VA 83.41% 176 days 10.03.2003
2. EA-650/10 M/s.Satyam Alloys 30.09.2009 21.12.2009 VA 94.42% 82 days 22.02.2006
3. EA-651/10 M/s.Jai Kamakhya Alloys Pvt.Ltd.
30.09.2009 05.01.2010 VA 89.82% 97 days 01.06.2007
4. EA-652/10 M/s.Khasi Alloys Pvt.Ltd.
30.09.2009 25.03.2010 VA 90.10% 176 days 05.10.2004
5. EA-653/10 M/s.Bimala Ispat & Alloys Pvt.Ltd.
30.09.2009 05.01.2010 VA 90.12% 97 days 01.08.2002
3. The principal ground on which the Ld. Commissioner rejected their applications seeking benefit of said Notification No.32/99-CE dated 08.07.1999 as amended, was that the Appellants had failed to submit their applications as stipulated under the said Notification, neither by 30th of September of the respective financial year i.e. 2009 nor within the condonable period of 30(thirty) days, as allowed under the said Notification, even though they have commenced commercial production prior to the said financial year 2009-10. Aggrieved by the said order, the appellants are in Appeal before this Tribunal.
4. Learned Advocate Shri Nihar Dasgupta, assisted by Miss Paulami Sikdar, Advocate submitted that even though the stipulated time prescribed under the said Notification is 30th September to claim benefit of said Notification No.32/99CE, since the value addition certificate as well as balance sheet of the preceding financial year was not ready, therefore, the required Application in claiming the benefit could not be filed by due date of 30.09.2009 nor within condonable period of 30(thirty) days thereafter. He submits that since they had complied with other conditions of the Notification, the delay was unintentional and the lapse being of technical in nature, ought to have been condoned by the adjudicating authority. In support, the ld. Advocate referred to the judgements in the case of Lallubhai Amichand Ltd. 2014 (311) ELT 929(GOI), Mangalore Chemicals & Fertilizers Ltd. v. Deputy Commissioner 1991 (55) ELT 437 (SC), Sambhaji Vs. Gangabhai 2009 (240) ELT 161(SC), UOI v. Suksha International & Nutan Gems & Anr. 1989 (39) ELT 503(SC), Commr. of Cus. & C.Ex. v. J.S. Gupta and Sons 2015 (318) ELT 63 (All.).
5. Per contra, ld.AR for the Revenue on the other hand submitted that the condition of the Notification is specific. In the said Notification at para 2.1 it has been clearly laid down that an Application in writing should reach to the Commissioner not later than 30th day of September in a financial year, and under the first proviso, discretion has been conferred on the Commissioner, to extend the due date by a further period of 30(thirty) days on showing sufficient cause by the assessee. It is his contention that to avail the benefit of Notification, the conditions laid down therein should be strictly complied and if any of the conditions are not adhered to, then benefit of the Notification cannot be extended to the assessee. In support, the ld.AR referred to the judgement of this Tribunal in the cases of Commissioner of C.Ex., New Delhi v. Hari Chand Shri Gopal 2010 (260) ELT 3(SC), Commissioner of Central Excise, Pondicherry v. Honda Siel Power Products Ltd. 2015 (323) ELT 644(SC) and M/s.Meridian Industries Ltd. v. Commissioner of Central Excise 2015 (325) ELT 417(SC). Further, the ld.AR for the Revenue has submitted that the Commissioner is not vested with the power to condone the delay beyond 30(thirty) days as the upper cap for accepting the application has been prescribed under the said Notification. In support, the ld.AR referred to the decision of this Tribunal in the case of Zenith Computers Ltd. vs. UOI 2004 (164) ELT 24(Bom.). Also drawing analogy, from similar provisions viz. Section 35A of Central Excise Act, 1944, the ld.AR submitted that now it is well-settled principle of law that once the upper statutory time limit for filing Appeal before the Commissioner(Appeals) is 60(sixty) days, as prescribed under Section 35A of Central Excise Act,1944 and on sufficient cause being shown could be condoned by another 30(thirty) days, any further delay beyond that period cannot be condoned by the Commissioner(Appeals) as he cannot travel beyond the statute. In support, he has referred to the decision of Honble Supreme Court in the case of Singh Enterprises v. CCE 2008(228) ELT 163(SC).
6. Heard both sides and perused the records. Before proceeding to analyze the issue of eligibility of benefit of Notification of 32/99-CE dt.08.07.1999,for delayed application claiming such benefit, it is necessary to visit the relevant clauses of the said Notification under dispute which reads as :-
2.1 [(1) Notwithstanding anything contained in paragraph 2A, the manufacturer shall have the option not to avail the rates specified in the said Table and apply to the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, having jurisdiction over the manufacturing unit of the manufacturer for fixation of a special rate representing the actual value addition in respect of any goods manufactured and cleared under this notification, if the manufacturer finds that the actual value addition in the production or manufacture of the said goods is at least 115 per cent of the rate specified in the said Table and for the said purpose, the manufacturer may make an application in writing to the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, not later than the 30th day of September in financial year for determination of such special rate, stating all relevant facts including the proportion in which the material or components are used in the production or manufacture of goods :
Provided that the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, may, if he is satisfied that the manufacturer was prevented by sufficient cause from making the application with the aforesaid time, allow such manufacturer to make the application within a further period of thirty days:
Provided further that the manufacturer supports his claim for a special rate with a certificate from his statutory Auditor containing a calculation of value addition, in the case of goods for which a claim is made, based on the audited balance sheet of the unit for the preceding financial year:
Provided also that a manufacturer that commences production on or after the 1st day of April, 2008 may file an application in writing to the Commissioner of Central Excise or Commissioner of Customs and Central Excise, as the case may be, for the fixation of a special rate not later than the 30th day of September of the financial year subsequent to the year in which it commences production.
7. Both sides agree that the appellants were required to file their applications for claiming the benefit of said Notification by 30.09.2009. However, it is pleaded that since Auditors Certificate and balance sheet of the previous year were not ready, there had been delay in filing the application before the Commissioner, claiming special rate, under Notification No.32/99-CE dated 08.07.1999. The moot question, therefore, to be addressed in the present appeals is: whether the Commissioner was right in rejecting the applications filed beyond the allowable limit of 30(thirty) days from the due date of 30.09.2009 or he should have condoned the delay and accepted the applications.
8. Needless to emphasize the principles of law governing the claim of an exemption Notification is well-settled by now. The Honble Supreme Court recently in Meridian Indus. Ltd.s case (supra), reiterating the principle, observed as:-
13. The appellant is seeking the benefit of exemption Notification No.8/97-C.E.. Since it is an exemption notification, onus lies upon the appellant to show that its case falls within the four corners of this notification and is unambiguously covered by the provisions thereof. It is also to be borne in mind that such exemption notifications are to be given strict interpretation and, therefore, unless the assesse is able to make out a clear case in its favour, it is not entitled to claim the benefit thereof. Otherwise, if there is a doubt or two interpretations are possible, one which favours the Department is to be resorted to while construing an exemption notification.
9. In Honda Siel Power Products Ltd.s case (supra), the Honble Supreme Court has observed that the condition of Notification should strictly be followed and in case of any doubt, the same should be resolved in favour of the department. In the said case, the exemption Notification No.10/2002-CE dated 01.03.2002 prescribed two conditions for availing the benefit of concessional rate of duty @4% against the applicable rate of 16%, the assesse fulfilled one of the conditions, but failed to comply with the second condition, resulting into denial of the benefit of the said Notification. The Honble Supreme Court had confirmed the denial of the said benefit, observing as follows:-
2.?It is not in dispute that the assessee fulfilled the first condition. The dispute pertains to second condition. The second condition mentioned above clearly spells out that to avail the benefit of this notification, duty was to be paid in cash or through account current. These are the only two modes of payment of duty which are specified. However, the assessee cleared the goods through utilization of Cenvat Credit which is not the prescribed mode mentioned as per condition (ii). To put it otherwise, it is an admitted case that duty was neither paid in cash nor through account current as the duty was paid through Cenvat Credit Account and therefore the assessee did not fulfill the second condition mentioned in the notification.
3.?It is trite that exemption notifications are to be construed strictly and even if there is any doubt same is to be given in favour of the Department.
4.?We find that the Tribunal has decided the case in favour of the assessee by observing that clearing of goods with payment of Excise duty with current account was only an error and the assessee had not violated the more substantial condition viz no Cenvat Credit should be taken in regard to the goods. This is clearly a faulty approach on the part of the Tribunal. It is stated at the cost of repetition that the assessee was required to fulfill the condition in stricto senso viz to pay the duty either in cash or through account current if it wanted to avail the benefit of exemption notification and not through adjustment of Cenvat Credit which is not the mode prescribed in the aforesaid conditions. Once we find that the conditions have not been fulfilled the obvious consequence would be that the assessee was not entitled to the benefit of this notification.
10. In the present Notification, inter alia, it is a condition that the assesse is required to file necessary application by 30th of September in the financial year and also under the first proviso to the said Notification, the Commissioner has been vested with the power to accept the application by condoning the delay to a maximum of 30(thirty) days on finding sufficient cause for the delay. Admittedly, the second condition has not been complied with by the Appellants. Therefore, in view of the aforesaid ratios the Appellants are not entitled to avail the benefit of the said Notification.
11. On the issue of condonation of delay beyond 30(thirty) days, we find that The Honble supreme Court in Singh Enterprises case(supra) while interpreting the power vested on the Commissioner(Appeals) to condone delay and answering the question whether it could be exercised for delay beyond the statutory limit of thirty days as stipulated under section amended 35A of CEA,1944 observed as:
8.?The Commissioner of Central Excise (Appeals) as also the Tribunal being creatures of Statute are vested with jurisdiction to condone the delay beyond the permissible period provided under the Statute. The period upto which the prayer for condonation can be accepted is statutorily provided. It was submitted that the logic of Section 5 of the Indian Limitation Act, 1963 (in short the Limitation Act) can be availed for condonation of delay. The first proviso to Section 35 makes the position clear that the appeal has to be preferred within three months from the date of communication to him of the decision or order. However, if the Commissioner is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of 60 days, he can allow it to be presented within a further period of 30 days. In other words, this clearly shows that the appeal has to be filed within 60 days but in terms of the proviso further 30 days time can be granted by the appellate authority to entertain the appeal. The proviso to sub-section (1) of Section 35 makes the position crystal clear that the appellate authority has no power to allow the appeal to be presented beyond the period of 30 days. The language used makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning delay only upto 30 days after the expiry of 60 days which is the normal period for preferring appeal. Therefore, there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days period.
12. We also find the principle laid down by the Honble Bombay High Court in the case of Zenith Computers Ltd.(supra) on similar question raised before it is applicable to the facts of the present case. It has been observed by the Honble High Court that an authority created under the statute cannot travel beyond the scope of the power delegated under the statute. Their Lordships held at para 16 & 17 of the judgment as :-
16. It is well settled that the statutory bodies cannot travel beyond the scope of power delegated to them under the statute under which they are created or authorized to act. Whenever a statute prescribes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said requirement leads to specific consequence, it would be difficult to hold that the requirement is not mandatory and the specified consequence should not follow. (vide : Sharif-ud-Din v. Abdul Gani Lone reported in AIR 1980 SC 303). A requirement of a particular form or manner of performance of an act is to be held as mandatory if the statutory provisions prescribe penalty for the failure to comply with such obligation (vide Banarsi Das v. Cane Commissioner, Uttar Pradesh and another reported in AIR 1963 (SC) 1417). Equally, it is well settled that when a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all. In fact in such cases, other methods of performance are necessarily forbidded (vide : State of Uttar Pradesh v. Singhara Singh and others reported in AIR 1964 Supreme Court 358 and A.K.Roy and Another v. State of Punjab and Ors. reported in AIR 1986 Supreme Court, 2060).
17. Bearing in mind the above well settled principles of law and the provisions of the said Rules to the facts of the case in hand, it is apparent that the authorities could not have allowed the applications filed by the Petitioners in exercise of their powers under Rule 6 as those applications were filed beyond the period of sixty days. The question of condonation of delay by the authorities could have arisen only if the applications were filed within the period of sixty days and not otherwise, as on expiry of the period of sixty days, the authorities have no power to condone the delay under Rule 6 of the said Rules.
In view of the above, we do not find any reason to interfere with the orders of the adjudicating authority. Accordingly, the orders are upheld and consequently the Appeals filed by the respective Appellants are dismissed. Appeals dismissed.
(Operative part of the order was pronounced in the open court.)
Sd/- 25/01/16 Sd/- 19/01/16
H.K.THAKUR) (D.M.MISRA)
MEMBER(TECHNICAL) MEMBER(JUDICIAL)
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