Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Central Excise vs Arihant Micro Computers Pvt. Ltd. on 10 August, 2006
Equivalent citations: 2006(112)ECC175, 2006ECR175(TRI.-CHENNAI), 2006(204)ELT350(TRI-CHENNAI), 2006[4]S.T.R.18
ORDER P.G. Chacko, Member (J)
1. M/s. Arihant Micro Computers (P) Ltd. (AMPL, for short) the respondent herein, had Central Excise licence for manufacture of computers and parts/accessories thereof. M/s. Arihant Computers (P) Ltd. (ACPL, for short), a trading company, placed orders on M/s. AMPL for supply of computer systems of specified configuration. Acting upon these purchase orders, M/s. AMPL manufactured and supplied the goods ordered for, after filing price lists with the department. These clearances were made during November, 1991 to March, 1994, on payment of duty as applicable to Heading 84.71 of the CETA Schedule. The department, after investigations into these transactions, came to the conclusion that M/s. AMPL had supplied semi-finished goods to M/s. ACPL and had undervalued these goods with a view to benefit the buyer, who was found to be related to the seller. It was found that both the companies were controlled and managed by one Shri Chander Kothari. Accordingly, a show-cause notice was issued to M/s. AMPL, M/s. ACPL and Shri Chander Kothari, for recovering differential duty of over Rs. 52 lakhs from M/s. ACPL for the aforesaid period by invoking the extended period of limitation and for imposing penalties on M/s. AMPL and Shri Chander Kothari. The proposals were contested by the noticees. In adjudication of the dispute, learned Commissioner of Central Excise dropped the above proposals, after recording a finding that M/s. ACPL were only trading in computers and not manufacturing them. The Commissioner's order was reviewed by CBEC. The operative part of the Board's review order dated 07.12.1995 reads as under:
4.12 Thus, M/s. ACPL appears to have contravened various provisions of Law and evaded duty, being the duty payable on the computers manufactured and sold by them by wilful mis-statement and suppression of facts with intention to evade duty. Therefore, extended period of 5 years as provided in Section 11A is invokable for the demand of the aforesaid duty. Also both the units have rendered themselves liable for a penalty under Rule 9(2), 52A and 173Q and Shri Chander Kothari is liable for a penalty under Rule 209A of CER, 1944. Commissioner has erred in dropping the proceedings altogether.
5.0 The Board, therefore, under the provision of Section 35E(1) directs the Commissioner to apply to the Customs, Excise and Gold (Control) Appellate Tribunal for correct determination of the following points arising out of the said order:
i) whether after taking into consideration the fact stated above, the order of the Commissioner is a legally correct and proper order,
ii) Whether by an order passed under Section 35C, the Tribunal should set aside or modify the order passed by the Commissioner and pass an order to confirm the full demand under the extended period as raised in SCN and impose suitable penalty considering the gravity of the offence, or pass such other as may be deemed fit.
The present appeal of the department is pursuant to the Board's direction. This appeal filed by the same Commissioner contains the following prayer:
It is therefore prayed that the Order of the Commissioner of Central excise (adjudication) may be set aside to the extent of dropping demand and confirm the Central Excise Duty in full as mentioned in Show Cause Notice as ordered in the review application No. 295/R/98 dated 07.12.1998 and impose an appropriate penalty on the duty sought to be evaded by the assessee or pass such other order as may be deemed fit.
2. When this appeal arose for hearing before the Bench on 31.07.2006, learned Counsel for the respondents viz. M/s. AMPL, raised a preliminary objection which was to the effect that, as no appeal had been filed by the department as against M/s. ACPL, demand of duty on whom was dropped by the Commissioner, the present appeal citing. M/s. AMPL as the only respondent was liable to be dismissed. Learned SDR wanted time to clarify as to whether separate appeals had been filed as against M/s. ACPL and Shri Chander Kothari. Accordingly, the case is arising today before us. It is submitted by learned SDR that there is no separate appeal.
However, it is submitted, an application under Rule 28C of the CESTAT (Procedure) Rules, 1982 has been filed by the appellant seeking to amend the cause-title of the memorandum of appeal. We have perused this application available on record. This is an application for substituting M/s. ACPL for M/s. AMPL as respondent. With reference to this application, it is opined by learned Counsel that this is an attempt by the appellant to achieve indirectly what cannot be directly obtained. Under the CESTAT (Procedure) Rules, 1982, the appellant should have filed so many appeals as there were parties against whom reliefs were sought. In this connection, reliance is placed on the Tribunals decision in Commissioner of Central Excise, Mangalore v. L.P. Shenoy 2003 (163) E.L.T. 297 (Tri.-Bang). Learned SDR has not cited any contra binding judicial authority on the point.
3. After considering the submissions, we find that the Board's review order had directed the Commissioner to file appeals with this Tribunal for reliefs against all the three parties viz. M/s. ACPL, M/s. AMPL and Shri Chander Kothari. As against M/s. ACPL the demand of duty was sought to be revived and as against M/s. AMPL and Shri Chander Kothari, penalties were sought to be imposed. But the Commissioner in this appeal cited M/s. AMPL as the only respondent. As against M/s. ACPL and Shri Chander Kothari, the Commissioner's order became final and binding on the department long ago for want of departmental appeal. In other words, the situation today is that the department has no grievance against dropping of demand of duty proposed on M/s. ACPL. If that be the case, they can hardly have any grievance against dropping of the penalty proposed on the respondent viz. M/s. AMPL. Hence the appeal filed by the department for the relief prayed for against the respondent is liable to be dismissed.
4. The case law cited by learned Counsel is found to be squarely applicable to the aforesaid facts. In that case, the Board had passed a review order for filing appeals against an order of the Commissioner which was in favour of a company and its Directors. The Board's advice was to file appeals as against the company and the Directors. But an appeal was filed by the department citing only the company as respondent. Later on, they filed an application for amendment of the cause-title of the appeal memo, wherein the Directors of the company were sought to be added as respondents. That application was rejected by the Tribunal. The decision cited by learned Counsel appears to support learned Counsel's point.
5. In the result, this appeal of the department gets dismissed.
(Dictated and pronounced in open Court)