Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Central Excise vs Ashok Leyland Ltd. on 13 October, 1999
Equivalent citations: 2003(162)ELT822(TRI-MUMBAI)
ORDER
Gowri Shankar, Member (T).
1. The appeal filed by the department is against the order of the Collector (Appeals), in setting aside the order of the Assistant Collector impugned before him on the ground that he had exercised powers in the case of adjudication in excess of the limit prescribed by the Board.
2. We have heard both sides.
3. The Department's appeal contends that the Collector was in error in applying the Circular of the Board No. 3/92, dated 4-8-1992 since there is prohibition in Section 11A of the Act restraining the Assistant Collector from adjudicating the matter. It is also contended that the question of jurisdiction was never raised before the Assistant Collector and therefore should not be dealt with by the Collector (Appeals).
4. The departmental representative emphasises these contentions. The latter ground hardly calls for any discussion. The Collector (Appeals) was fully within his right in taking up and allowing the appeal on the aspect of jurisdiction which is a question of law. As to the first ground that this Bench of the Tribunal in its order in CCE v. Paradise Conductor Pvt. Ltd. in appeal E/675/94 held that the circular of the Board in question was binding. It had expressed its inability to follow the decision of the Tribunal in CCE v. Jaypee Agro Chemicals Ltd. and Ors. - 1999 (109) E.L.T. 819 (T) = 1998 (27) RLT 681, holding to the contrary.
5. However the matter before the Assistant Collector was not one relating to demand under Section 11A. It related to recovery of Modvat credit alleged to have been erroneously taken. The notice therefore could have been issued under Rule 57-I. The Board's circular restricts the powers of the Assistant Collector (now Assistant Commissioner) only to demand for duty under Section 11A of the Act. It said nothing about demands for Modvat credit to be issued under Rule 57-I. The Advocate for the respondent cites a Single Member decision of the Tribunal in CCE v. A.B.B. Ltd. - 1999 (106) E.L.T. 473 in support. In that decision the Bench was of the view that confining the circular only to demand of duty under Section 11A and not to demand under Rule 57-I would be highly technical and would not be justified since Modvat credit of duty is after all duty on input, and such credit is utilised for payment of duty.
6. We do not think it would be correct to say that limiting the scope of the circular to the subject of which it was issued would be a technical view. We have in the order referred to above extensively discussed reasons holding the circular as binding and so to be taken note of by the Tribunal in determining the jurisdiction. On that principle it would follow that it would not be appropriate to extend the scope of circular to areas with which it was not concerned. We are also unable to agree that, for the purpose circular no distinction exists between Modvat credit and duty payable on manufactured goods. The legislature itself has recognised a distinction between the two by providing separate sets of rules for them. Recovery of Modvat wrongly taken also separately dealt with under Rule 57-I, and not under Section 11A of the Act, as would be the case of both Modvat credit and duty are the same. The provisions for refund of these two duties also differ significantly. If the two are the same, it would in effect attribute redundancy to Rule 57-I.
7. We must therefore hold that the Board's circular applies only to demands of duty under Section 11A and not Modvat credit. It would then follow that the Collector (Appeals)'s order is not maintainable. However, the Commissioner (Appeals) would now have to decide upon the merits of the case.
8. Accordingly we allow the appeal and set aside the impugned order. Commissioner (Appeals) shall dispose of the appeal before him according to law.