Custom, Excise & Service Tax Tribunal
Siemens Ltd vs Commissioner Of Central Excise, Nasik on 27 January, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No.E/2765/03 (Arising out of Order-in-Appeal No.RK/35/Nasik/2003 dated 30/07/2003 dated passed by Commissioner of Central Excise & Customs (Appeals), Nagpur) For approval and signature: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.R. Chandrasekharan, 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 :
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?
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Siemens Ltd., Appellant
Vs.
Commissioner of Central Excise, Nasik Respondent
Appearance:
Shri.Naresh Thacker, Advocate for appellant
Shri.K. Lal, SDR, for respondent
CORAM:
Honble Mr. Ashok Jindal, Member (Judicial)
Honble Mr. P.R.Chandrasekharan, Member (Technical)
Date of Hearing : 27/01/2011
Date of Decision : 27/01/2011
ORDER NO
Per: Ashok Jindal
1. The appellants are in appeal against the impugned order, wherein the appeal filed by the Revenue was allowed and the appeal filed by the appellant was rejected.
2. The brief facts of the case are that the appellants are engaged in the manufacturing of AD/DC drives and had filed classification list, classifying their products under Chapter Heading 85.04 of the CETA, 1985 attracting Central Excise duty @ 5%. The said classification list was not accepted by the department and a show-cause notice was issued to classify their product under Chapter Heading 85.37 and 85.43 attracting duty @ 20% and 25% respectively. The classification was finally decided in favour of the appellants against the said order. The department preferred an appeal before the Commissioner (Appeals), who also confirmed the classification list filed by the appellants as their product is classifiable under Chapter Heading 85.04.
3. During this period the appellants were clearing their goods @ 20%/25% under protest and after decision of the Commissioner (Appeals) on classification issue in favour of the appellants, the appellants filed a refund claim of Rs.80,83,890/-, thereafter the appellants revised their refund claim and the same was reduced to Rs.43,45,739/-. The refund claim was rejected. The appellant preferred an appeal before the Commissioner (Appeals), who remanded back the case for denovo adjudication with the guideline that the reappraisal of the documentary evidence produced by the appellants can be done only through inquiry and verification with source and destination by the authorities at the original stage. Thereafter, the refund claim of Rs.38,06,579/- was sanctioned out of Rs.43,45,789/-. The appellant preferred an appeal before the Commissioner (Appeals) for denial of refund claim of balance amount of Rs.5,39,160/- and the Revenue preferred an appeal against the order of sanctioning of refund claim by the adjudicating authority. The Commissioner (Appeals) rejected the appeal filed by the appellants and allowed the appeal filed by the Revenue. Against the said order, the appellants are in appeal before this Tribunal.
4. The Ld. Advocate for the appellants submitted that the appeal filed by the Revenue before the Commissioner (Appeals) was not maintainable as the same was in contravention of provisions of Central Excise law. He also submitted that the Commissioner (Appeals) has rejected the appeal of the appellants on presumption by holding that the ultimate user of the goods might have raised the credit on the strength of GP1s @ 20% to 25%. This order is only on presumption and not on the basis of any evidence, hence, the said order is liable to be rejected. In support to his contention that the appeal is in contravention of provisions of Section 35E (2) of Central Excise Act, which provides how the appeal is to be filed by the Revenue before the higher authorities. To support his contention, he placed reliance on the decisions of Mrinal Kanti Sarkar Vs. CC (Prev.), West Bengal, reported in 2001 (135) ELT 1018 (Tri.Kolkata), CCE, Mumbai Vs. Interscape reported in 2009 (239) ELT 283 (Tri-Mumbai), Dhampur Sugar Mills Co. Ltd., Vs. CCE, Meerut, reported in 1999 (108) ELT 498 (Tribunal), CCE Vs. Silver Streak Welding Products India Pvt Ltd., reported in 2008 (226) ELT 704 (Bom) & CCE Vs. Maza Cosmetics, reported in 2007 (207) ELT 200 (Delhi High Court). He also submitted that as the adjudicating authority has sanctioned their refund claim and no show-cause notice has been issued under Section 11A of the Central Excise Act, 1944 for recovery of erroneous refund made to the appellants, the appeal filed by the Revenue is not maintainable, in view of the Circular No.423/56/98-CE dated 22/09/98. He also submitted that in this case the lower appellate authority has considered that the credit may be taken by the buyers, in that event the recovery should be made from the buyers for wrong availment of credit and not to the appellants as no credit is available on capital goods.
5. On the other hand, the Ld. DR submitted that the contention of the Ld. Advocate are not acceptable because in the case of CCE, Meerut Vs. Blue Star Spinning Mills Ltd., reported in 2005 (182) ELT 125 (Tri.-Del) this Tribunal has held that under Section 35E(4) the authorised officer can file the appeal. Further, he submitted that no show-cause notice is required as held by the Honble High Court of Karnataka in the case of Dynamatic Technologies Ltd., Vs. UOI, reported in 2005 (186) ELT 277 (Kar.).
6. Heard both sides.
7. On careful examination and the submissions made by both sides, we find that in this case the lower appellate authority has rejected the refund claim of the appellants on appeal filed by the Revenue. We have also seen the authorization given by the Commissioner, who filed the appeal before the Commissioner (Appeals) against the sanction of the refund claim of the appellants after exercising his power under Section 35E(2) of the Central Excise Act, 1944 to authorise the Assistant Commissioner of Central Excise, Nasik. We have also seen the provisions of Section 35E(2) and Section 35E(4) of the Act read as follows:-
35E. Powers of Board or Commissioner of Central Excise to pass certain orders.
(1) xxxxxxx (2) The Commissioner of Central Excise may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authorities 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 his order.
(3) xxxxxxxxxxx (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 of 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 in this case the Commissioner has exercised his powers under Section 35E (2), which specifically take note of that the Commissioner can direct such authority, who has passed the order to file an appeal before the Commissioner (appeals). In this case, the adjudicating authority is the Additional Commissioner and the Commissioner has authorised to the Assistant Commissioner. Hence, as held by the Honble High Court of Bombay in the case of Silver Streak Welding Products India Pvt Ltd., (supra), wherein the Honble High Court has held that in Section 35E (2) of the Act, the power could have been conferred only to the adjudicating authority not to any other officer. Following the same ratio, we are of the view that in this case, the Asst. Commissioner was not the adjudicating authority, who has filed the appeal before the Commissioner (Appeals) and the Commissioner (Appeals) has not dealt the same in accordance to law. Hence, the appeal filed by the Revenue before the Commissioner (Appeals) is not maintainable, following the decision of Maza Cosmetics (supra) and Silver Streak Welding Products India Pvt Ltd., (supra). The case laws relied upon by the Ld. DR is of no help to the facts of this case as in this case the Commissioner has exercised his power under Section 35E (2) and not on under Section 35E (4). Hence, the facts are distinguishable from the facts of the case of Blue Star Spinning Mills Ltd., (supra).
9. Accordingly, we hold that the appeal filed by the Revenue is not maintainable before the Commissioner (Appeals). Hence, we set aside the order of Commissioner (Appeals) allowing the appeal of the Revenue against the order of the sanctioning of refund claim of the appellants by the adjudicating authority as the said appeal is not maintainable before the Commissioner (Appeals)under Section 35E (2) of the Central Excise Act, 1944.
10. On the second issue for the denial of refund claim of Rs.5,39,160/-, we find that the refund claim has been denied on the presumption that the buyer might have taken credit. The Courts do not decide the matter on the presumption. To decide any issue, Courts requires evidence and confirming the demand only on presumption is not sustainable. More specifically, in this case the credit is not available to the buyers on capital goods and if any of the buyer has taken credit of this capital goods, then the liability to recover the amount wrongly availed credit is of the buyers and not of the supplier. Moreover, in this case, the verification has not been done by the adjudicating authority properly and they have done only on random basis. Accordingly, the order of denial of refund claim of Rs.5,39,160/- is also set aside and the matter is sent back to the original adjudicating authority to re-examine the claim of the appellants and to decide the same in accordance with the law after giving reasonable opportunity to present their case. With these observations, the appeal is disposed of.
(Pronounced in Court) (P.R. Chandrasekharan) Member (Technical) (Ashok Jindal) Member (Judicial) pj 1 2