Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Central Excise vs Radhaballabh Silk Mills Pvt. Ltd. on 10 February, 2004
Equivalent citations: 2004(169)ELT165(TRI-MUMBAI)
ORDER S.S. Sekhon, Member (T)
1. Revenue has filed this appeal contending that the letter dt. 04.09.2001 was not a decision or an order envisaged under Section 35A to call for a cognizance by CCE (Appeals) to have passed an order in detail and arrive at a classification of the product. They have termed this letter to he a 'communication letter' and not an appealable order. The Ld. DR relies upon a catena of decisions and submits that this letter was consequent to exercise of power vested in the proper officer under 2nd proviso to Rule 9B enabling the said officer to direct and resort to a provisional assessment and no appeal would lie against such communication.
2. The Ld. Advocate on the other hand contends that a reading of the letter in question reveals that if (sic) is a classification of the entity to be made in a particular manner and this impugnes and determines rights and liabilities, which as per the tests laid down by the Hon'ble Supreme Court in the case of Jaswant Sugar Mills Ltd. v. Lakshmi Chand {1963 Supp (1) SCR 242: AIR 1963 SC 677 (1963) 1 LLJ 524} should result in the letter dt. 04.09.2001 to be an order which could be taken cognizance by CCE (Appeals) under Section 35A. The Ld. Advocate further submits that the CCE (Appeals) could not remit the matter, subsequent to the amendment and had issued a notice to the DC/AC Central Excise Division K2 M-IV to present the case of the department. The department opted to remain unrepresented, therefore, the order of the CCE (Appeals) based n submissions of the appellant cannot be faulted with and there is not even a ground taken to challenge the same on merit before the Tribunal.
3. After considering the rival submissions and the grounds taken in appeal before the Commissioner (Appeals) by the Respondents herein, it is found :
a) The letter dt. 04.09.2001 which is reproduced below -
F. No. V(54)17-Decl/190/2000 Mumbai, the 4th Sept., 2001 To, M/s. Radhballabha Silk Mills Pvt. Ltd., Plot No. 5A, 6 & 7, Shyam Nagar, Jogeshwari (E), Mumbai - 400 060.
Sub: Classification Declaration filed under Rule 173B.
By M/s. Radhaballbha Silk Mills, Mumbai - 60.
Please refer to your Classification Declaration Nos.
01/2001-02 w.e.f. 01.03.2001, 01/2000-01 w.e.f. 25.02.2001 w.e.f. 01.04.2001 filed by you under Rule 173B of Central Excise Rule, 1944.
In the above said classification declarations you have classified the products under Chapter Heading 5402.61 and 5402.62 of Central Excise Tariff Act, 1985, are not accepted.
As the matter is under investigation you as directed to classify the said products for which you are paying Central Excise duty under Chapter Heading 5402.31 & 5402.32 as earlier classification declaration No. 1/2000-01 dt. 12.12.2000."
indicates that it has a clear cut direction to classify the impugned entity in a particular manner even though enquiries/investigations were underway. No material is placed before us by Revenue, inspite of an order of this Tribunal in this case vide No. C-II/1535/03 -WZB dt. 26.02.2003 as follows :
"At the last hearing, the departmental representative requested that the appellant Commissioner may be permitted to file, fresh grounds of appeal relating to classification of the goods. The contented that this was question of law and could be raised at any stage.
Although initially we were not inclined to accept this request, we are of the tentative view that, since classification of goods is a question of law it can be raised at any stage, accordingly the appeal is relisted on 13th August 2003. If any application filed by the Commissioner for additional grounds received, is to be listed for consideration."
No fresh grounds pursuant to the above to arrive at the classification have been filed. It is therefore not possible at this stage to conclude as to what is the result of the completion of the said enquiry, which was underway when 'directions to classify in a particular fashion' were arrived at and ordered on 04.09.2003. Whether the results of the said enquiry/investigation, on completion, confirm that classification direction in Revenue's view or not, cannot be ascertained. We are only told that a Show Cause Notice has been issued answerable to the Commissioner demanding duties. No copy of the same has been produced before us.
b) The findings herein above induce us to conclude that the letter dt. 04.09.2001 is an order on classification arrived at after enquiries, albeit incomplete; the order for classification in the manner directed, determines and declares rights and imposes an overall fiscal liability on the assessee. Such directions cannot be mere communication of an private opinion or advise by the proper officer. The tests laid down in the case of Jaswant Sugar Mills Ltd (Supra), relied by both sides, are satisfied. The letter dt. 04.09.2001 is found to be a decision/order that could be taken cognisance by Commissioner (Appeals) in the facts of this case when Section 35A of Central Excise Act, 1944 is considered.
c) The fact that Commissioner (Appeals) has issued notice to the proper officer to remain present and represent the department's case and the fact that the matter was under investigation and material has been collected by the proper officer, it is to be held that the order on merits, relying in detail on the submissions of the assessee, is an order Passed by the CCE (Appeals), behind the back of Revenue especially when the CCE (Appeals) had conducted that the Revenue should be present and heard in this case. The Commissioner (Appeals) should have granted another opportunity to the 'proper officer' to remain present and obtained the material collected during the enquiries / investigation and thereafter passed an order. In not doing so, the order arrived on merits cannot be upheld.
d) Considering that CCE (Appeals) was not empowered to remand the matter, at the relevant time, and no grave in justice would be done if the matter is remitted back to the CCE (Appeals) to re-decide the appeal on the grounds taken by the assessee before him i.e. on merits, after hearing both sides i.e. the assessee and the proper officer. This issue is to be remanded after setting aside the order to consider the material placed before him and thereafter finalise the classification of the impugned product.
e) The plea, in the prayers of the Revenue now made, that lower adjudicating authority i.e. the proper officer should be allowed to decide the matter is not upheld since the proper officer's mind is exhibited in the edict dt. 04.09.2001 indicating that he has come to a conclusion directing a classification in a particular manner even though on incomplete enquiry/investigations. Having thus investigated and directed a particular classification in the matter, his eyes are not only clouded by the dust raised in the arena but bloodshot also. Therefore, it would be in the interest of justice, that CCE (Appeals) determines the issues of classification after considering the results of the completed enquiry and upon hearing both sides.
3. Consequently, appeal allowed as remand to CCE (Appeals).
(Pronounced in Court)