Custom, Excise & Service Tax Tribunal
Cce Chennai-I vs B.S.Barg on 23 September, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH, CHENNAI S.No. Application Appeal No. Appellant Respondent
1. E/COD/124/2012 E/103/2012 CCE Chennai-I B.S.Barg
2. E/COD/125/2012 E/104/2012 CCE Chennai-I R.Murali
3. E/COD/126/2012 E/105/2012 CCE Chennai-I Chandra Sekhar Sharma
4. E/COD/127/2012 E/106/2012 CCE Chennai-I R.Sanjay Ohja
5. E/COD/128/2012 E/107/2012 CCE Chennai-I Pawan Kumar Bansal
6. E/COD/129/2012 E/108/2012 CCE Chennai-I Vinod Kumar Bansal
7. E/COD/130/2012 E/109/2012 CCE Chennai-I R.Murali
8. E/COD/131/2012 E/110/2012 CCE Chennai-I GPV Rajasekharan
9. E/COD/132/2012 E/111/2012 CCE Chennai-I D.Nachiappan & Bros.
10. E/COD/133/2012 E/112/2012 CCE Chennai-I R.Sanjay Ojha
11. E/COD/134/2012 E/113/2012 CCE Chennai-I Chandra Sekhar Sharma
12. E/COD/135/2012 E/114/2012 CCE Chennai-I Gopal Ojha
13. E/COD/136/2012 E/115/2012 CCE Chennai-I Ranjith Kumar Ojha
14. E/COD/137/2012 E/116/2012 CCE Chennai-I A.Deenadhayalan
15. E/COD/138/2012 E/117/2012 CCE Chennai-I P.Sundar
16. E/COD/139/2012 E/118/2012 CCE Chennai-I Suresh Narayan Singh
17. E/COD/181/2012 E/119/2012 CCE Chennai-I Ram Goyal
18. E/COD/182/2012 E/120/2012 CCE Chennai-I R.Murali
19. E/COD/183/2012 E/121/2012 CCE Chennai-I GPV Rajasekharan
20. E/COD/184/2012 E/122/2012 CCE Chennai-I D.Nachiappan & Bros.
21. E/COD/185/2012 E/123/2012 CCE Chennai-I Jagadish Rai Bansal
22. E/COD/186/2012 E/124/2012 CCE Chennai-I Chandra Sekhar Sharma
23. E/COD/187/2012 E/125/2012 CCE Chennai-I Gopal Ojha
24. E/COD/188/2012 E/126/2012 CCE Chennai-I R.Sanjay Kumar Ojha
25. E/COD/189/2012 E/127/2012 CCE Chennai-I Ranjith Kumar Ojha
26. E/COD/190/2012 E/128/2012 CCE Chennai-I Ravi Kant Sharma [Arising out of Orders-in-Original No.1/2004, 2/2004 and 3/2004 dated 27.4.2004 passed by the Commissioner of Central Excise, Chennai-I] For approval and signature :
Honble Shri P.K. Das, Judicial Member Honble Shri Mathew John, 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 the Members wish to see the fair copy of the order? :
4. Whether Order is to be circulated to the Departmental authorities ? :
Appearance:
Shri S. Shankaravadivelu Advocate (Sl.No.1, 5, 6, 17) None (For Sl.No.2-4, 7-16, 18-26) For the Appellants Shri S. Rajagopalan, Special Counsel For the Respondent CORAM :
Honble Shri P.K. Das, Judicial Member Honble Shri Mathew John, Technical Member Date of Hearing : 25-06-2013 Date of Pronouncement : 23-09-2013 FINAL ORDER No.40389-40414/2013 Per Mathew John In this proceeding 26 applications filed by Revenue for condoning delay in filing 26 appeals are being considered together because the appeals and applications involve similar facts. The delay is stated to be more than 6 years in filing these 26 appeals.
2. Arguing for Revenue, the Ld. Special Counsel for Revenue submits that these appeals relate to three matters involving clandestine manufacture and clearance of steel products like M. S. round, M.S. Rectangular Bars and M. S. squares by three assessees namely, M/s Indian Steel and Allied Products (ISAP) and Indira Ispat Udyog (IIU) and Goyal Ispat Udyog (GIU) during the years 1994, 1995 and 1996.
3.1 One of the three Show Cause Notices was issued to Shri. B. S. Garg Proprietor of ISAP demanding duty amount of Rs. 1,64,38,943/- and three others who acted as brokers for selling the goods and those who actually sold the goods under cover of their invoices. The details of parties to whom SCN was issued were as under:
S. No Name of party Nature of involvement in the alleged offence 1 Shri. B. S. Garg Proprietor of M/s Indian Steel and Allied Products.
The manufacturer alleged to have manufactured the goods clandestinely 2 Shri. R. Murali Broker for selling the goods 3 Shri. Chander Sekhar Sharma Person who sold the goods to consumers under their invoices 4 R. Sanjay Kumar Ojha Person who sold the goods to consumers under their invoices 3.2. On adjudication of SCN issued to ISAP, the Commissioner confirmed demand of duty for Rs.1,96,425/- against ISAP and imposed a penalty of Rs. 20,000/- under 173Q of Central Excise Rules, 1944 by order dated 27-04-2004. The Rest of the proceedings were dropped.
4.1 Another SCN was issued to Indira Ispat Udyog (IIU) demanding duty demand of Rs. 2,20,41,065/-and consequent penalties. Further penalty was proposed on 13 others. The details of parties to whom SCN was issued were as under:
S. No Name of party Nature of involvement in the alleged offence 1 M/s Indira Ispat Udyog The manufacturer alleged to have manufactured the goods clandestinely 2 Shri. Pawan Kumar Bansal Partner of IIU 3 Shri. Vinay Kumar Bansal Partner of IIU 4 Shr. G. P. V Rajasekharan Broker
5.
Shri. R. Murali Broker
6. Shri D. Nachiappan and Bros. Broker
7. Shri. R. Sanjay Ojha Issued Bills for selling goods manufactured by IIU
8. Shri. Chandrasekhar Sharma Issued Bills for selling goods manufactured by IIU
9. Shri. Gopal Ojha Issued Bills for selling goods manufactured by IIU
10. Shri. Ranjit Kumar Ojha Issued Bills for selling goods manufactured by IIU
11. Shri. A. Deenadayalan Issued Bills for selling goods manufactured by IIU
12. Shri. P Sundar Issued Bills for selling goods manufactured by IIU
13. Shri. Suresh Narayanan Singh Issued Bills for selling goods manufactured by IIU 14 Shri. Sayed Sirajuddin. Purchased goods from IIU 4.2. On adjudication Duty demand of Rs. 97202/-out of Rs. 2,20,41,065/-demanded in SCN was confirmed. Further a penalty of Rs. 10,000/- was imposed on IIU under Rule 173 Q and Rs. 10,000/- was imposed on Shri V. K. Bansal partner of IIU under Rule 209A of Central Excise Rules 1944. The rest of the proceedings were dropped. 5.1 The SCN issued against Goyal Ispat Udyog demanded excise duty of 1,33,62,476/- was demanded from GIU and penalty was proposed. Further penalties were proposed on 10 other parties as shown in the following table :
S. No Name of party Role of the party 1 Goyal Ispat Udyog The manufacturer 2 Shr. Sri Ram Goyal Managing Director of the first noticee, presently known Shriram Ispat Pvt. Ltd.3
R. Murali Broker 4 SHri. G. P. V. Rajasekharan Broker 5 Shri. Nachiappan & Bros.
Broker 6 Shri Jagadish Rai Bansal Broker 7 Shri. Chandra Sekhar Sharma Issued Bills for selling goods manufactured by GIU 8 Shri Gopal Ojha Issued Bills for selling goods manufactured by GIU 9 Shri Sanjay Kumar Ojha Issued Bills for selling goods manufactured by GIU 10 Shrri. Ranjith Kumar Ojha Issued Bills for selling goods manufactured by GIU 11 Shri Ravi Kant Sharma Acted as broker and Issued Bills for selling goods manufactured by GIU 5.2 On adjudication of SCN issued to GIU, the Commissioner dropped the proceedings initiated against M/s GIU. The order is silent on proceedings against other noticees.
6. The Central Board of Excise and Customs exercising powers under section 35 E (1) of central Excise Act as it stood then reviewed the orders 1/2004, 2/2004 and 3/2004 dated 27-04-2004 issued by the Commissioner and by Review Order No.52-R/2005 dt. 23.3.2005, 88-R/2005 dated 19.4.2005 and 53-R/2005 dated 23.3.2005, directed the Commissioner as under (extracted from order relating to ISAP) :
5.20 In the instant case, evidences have been established by way of weighment certificates, tabulations prepared by the bill traders/brokers (were confronted with details of transaction recovered from Kerala buyers for getting statements which also enable to identify the manufacturer whose goods had been cleared under their bills (i.e. Bill Traders Bill) and consumption of excess power. Most importantly, it has been proved that they were habitually indulging in suppressing the production inasmuch as Commissioner in the Order, confirmed demand of Rs.1,96,425/- being the unaccounted clearance made during period January95 and the finding given by the Commissioner for unaccounted clearance of 99.58 MT during 1997 (which ultimately could not be demanded as per Commissioners finding because no duty was demanded on the said quantity in the notice). Hence, following the doctrine of admissibility of preponderance of probability, Commissioner should have confirmed entire demand along with appropriate penalty /interest.
6.0 Under these circumstances, it appears that the Commissioner ought to have confirmed the entire demand raised in the show cause notice along with appropriate penalty sought to be imposed.
7.0 The Board, therefore, under the provision of Section 35E (1) directs the Commissioner to apply to the Customs Excise and Service Tax Appellate Tribunal for correct determination of the following points arising out of the said order:
1. Whether after taking into consideration of the facts stated above, the order of the Commissioner is legally correct and proper?
2. Whether by an order passed under Section 35C, the Tribunal should modify the order passed by the Commissioner?
3. Tribunal would pass such order as may be deemed fit?
The orders passed by CBEC in the case of other two parties are similar and hence not re-produced.
7. Section 35(E) as it stood at the relevant time read as under:
Powers of Board or Commissioner of Central Excise to pass certain orders (1) The Board may, of its own motion, call for examine the record of any proceeding in which a Commissioner of Central Excise as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality propriety of any such decision or order and may, by order, direct such Commissioner to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order.
(2) The Commissioner of Central Excise may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Commissioner of Central Excise in this order.
(3) No order shall be made under sub-section (1) or sub-section (2) after the expiry of one year from the date of the decision or order of the adjudicating authority.
(4) Where in pursuance of an order under sub-section (1) or sub-section (2) the adjudicating authority or the authorised officer makes an application to the Appellate Tribunal or the Commissioner (Appeals) within a period of three months from the date of communication of the order under sub-section (1) or sub-section (2) to the adjudicating authority, such application shall be heard by the Appellate Tribunal or the Commissioner (Appeals), as the case may be, as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of sub-section (4) of section 35B shall, so far as may be, apply to such application.
8. As per the above directions of CBEC, the Commissioner filed three applications under section 35E(1) against M/s Indian Steel and Allied Products (ISAP) and Indira Ispat Udyog (IIU) and Goyal Ispat Udyog (GIU) as respondents. The names of other parties were not shown as respondents. Nor were applications filed against other parties as respondents along with applications against these three parties.
9. Sometime during the year 2012 Revenue realized that they should have challenged the orders of the Commissioner dropping penalty against the proprietor Shri. B. G. Grag of ISAP, the two partners of partners of IIU, Shri.Ram Goyal Managing Director of the first noticee, which is presently known Shriram Ispat Pvt. Ltd, the brokers and dealers by filing applications with those parties as respondents. So they filed these 26 appeals during Feb 2012 along with application for condoning of delay in filing these appeals. No such application is seen in respect of Shri. Sayed Sirajuddin who, according to the SCN, bought goods manufactured by M/s Indira Ispat Udyog under cover of invoices issued by dealers who were issuing invoices for such goods.
10. Arguing in support of the applications for condoning delay the Ld. Special Counsel submits that the appeals against the main respondents have been filed in time and what are now being filed are only supplementary appeals. He submits that the delay in filing the appeals happened due to oversight and is not intentional delay. He relies on the decision of South Zonal Bench of Tribunal in appeal Nos. E/151 and 152/2011relating to CCE Vs. Muralilal Santhali and another vide Misc Order Nos. 75-76/12 dated 2012.
11. Opposing the prayer, the Ld. Advocates appearing for the respondents argue that these are not supplementary appeals against the same parties. He argues that appeals can be considered as supplementary appeal only a main appeal is filed against one party and against the same party more appeals need to be filed for the reason that there were many other impugned orders, Show cause Notices etc for different periods etc.. In the appeals now being considered in this proceeding appeals are being filed against new parties who were under the impression that the proceedings against them have concluded and hence the appeals cannot be considered as supplementary appeals. The Ld. Advocates rely on the following decisions in this matter:
(i) CCE Vs. L.P. Shenoy-2003 (162) ELT 297 (Tri)
(ii) CCE Vs. N. A. Jayaram-2003 (161) ELT 412 (Tri-Bang)
12. We have considered arguments on both sides. We note that in the adjudication order passed against Goyal Ispat Udyog., there is no order passed in respect of proceedings initiated against the co-noticees. So strictly speaking there is no order to be appealed against.
13. In the case of co-noticees, in the case of other two manufacturers, the orders were to the effect that rest of the proceedings were dropped. It appears from the adjudication order that the copies of the order were not endorsed to the respondents against whom applications are now filed. This aspect was not argued by either side. This does not appear to be relevant because as per section 35E (4) applications were to be filed within three months from the date on which CBEC had passed the order under section 35E (1). So there is delay as mentioned in the application whether or not the order has been communicated to the respondents herein.
14. These applications are against new parties after considerable lapse of time of more than 6 years over and above the time limits then prescribed in statute giving a normal time of one year for CBEC to review the order plus three months to the Commissioner to file applications. Since no notices have gone to the respondents herein it is only reasonable that the respondents had a bonafide belief that the proceedings against them had concluded. The Hon Apex Court in the case of Ramchandra Shankar Deodhar & Ors. Vs The State Of Maharashtra & Ors-1974 AIR 259 observed as under:
It may also be noted that the principle on which the Court proceeds in refusing relief to the petitioner on ground of laches or delays is that the rights which have accrued to others by reasons of the delay in filing the petition should not be allowed to be disturbed unless there is reasonable explanation for the delay.
15. Similar View was expressed in Collector of Central Excise vs Speedway Rubber Co. 1993 (66) ELT 425 Tri Del. Para 7 is reproduced below:
7. Rights accrued to an assessee on account of the Revenue not preceding to file an appeal by accepting the order of Collector (Appeals) cannot later, after a lapse of time, be allowed to be snatched away from the assessee by permitting the Revenue to persue the appeal remedy by condoning the delay especially where there are serious latches and negligence on their part. The condonation of delay has to be exercised with due care and caution and in such a way as not to take away the rights accrued to the assessee or the Revenue as the case may be. In the circumstances of long delays, the cause shown should be sufficient meaning thereby that the party should show that there is no negligence and latches on his part in filing the appeal and in persuing their remedy. The party should show that such delay by condonation will not result in any damage or loss to the opposite side nor will it take away his rights accrued on account of non-filing of the appeal in time. The party should also show that status quo of rights had been maintained during the period of delay. This Tribunal had laid the guidelines for condonation of delay after examining the various citations of Supreme Court in the case of Mahabir Metal Converters, Thane v. Collector of Central Excise, Bombay - 1986 (7) ETR 375---
16. After lapse of a long period of over six years, it would become difficult for the respondents who have not been issued with notices regarding further proceedings to have retained evidences that they might have wanted to rely for their defence. Such long period of lapse creates a vested right for the respondents not to be dragged into further proceedings. In such circumstances, it will be against the principle laid down by the Hon Apex Court to condone such long delay against express provisions made in the statute. We note that the Tribunal has considered a similar matter in the cases of L. P. Shenoy (Supra) and N. A. Jayaram (supra) cited by the advocates for the respondents. In those cases the additional appeals were against the Director of the company against whom appeal was filed in time. Even in those cases the Tribunal did not condone such delay. The case of appeals against parties not connected (other than through the SCN) is on a much weaker footing. So we follow the same decisions and reject the applications for condoning of delay. Consequently, the 26 applications which are now treated as appeals in view of the amendments made in section 35E of Central Excise Act, also get rejected.
17. However, it is made clear that the liabilities, if any, that may fall on Shri. B. S. Garg as proprietor of M/s Indian Steel and Allied Products and Shri. Pawan Kumar Bansal and Vinay Kumar Bansal as partners of Indira Ispat Udyog and Shri Ram Goyal as partner of Goyal Ispat Udyog that may get decided in the applications filed in time cannot be affected in any way by this order.
(Pronounced on 23/09/2013) (MATHEW JOHN) (P.K.DAS) TECHNICAL MEMBER JUDICIAL MEMBER gs 1