Customs, Excise and Gold Tribunal - Tamil Nadu
Roots Multiclean Ltd. vs Commissioner Of C. Ex. on 26 July, 2004
Equivalent citations: 2004(174)ELT123(TRI-CHENNAI)
ORDER P.G. Chacko, Member (J)
1.These appeals filed by the assessee are directed against an order passed by the Commissioner of Central Excise (Appeals). In the impugned order, ld. Commissioner (Appeals) dismissed two appeals of the assessee as time-barred. Appeal Nos. E/667 & 668/2003 before us are against this part of the impugned order. In the remaining part of the impugned order, ld. Commissioner (Appeals) upheld the demands of duty against the assessee in respect of two items of goods manufactured and captively used for the manufacture of final products falling under Heading 96.03 of the CETA Schedule which were chargeable to "Nil" rate of duty.
2. Heard both sides. It appears from the records that the lower appellate authority was dealing with eight appeals filed against equal number of Orders-in-Original. The normal period of limitation for an appeal to be filed with the said authority was three months under Section 35(1) of the Central Excise Act as the provision then stood. The appellate authority was empowered to condone delay beyond this period, up to three months, under the proviso to Section 35(1). Appeal No. 360/97 was filed beyond six months (normal period of limitation of 3 months + condonable period of delay of 3 months) from the date of communication of the relevant Order-in-Original and the same was dismissed as time-barred. Appeal No. E/667/2003 before us is against this dismissal. After considering the submissions in this appeal, we note that it is settled law that a Commissioner (Appeals) has no power to condone any delay beyond the maximum period prescribed under the proviso to Sub-section (1) of Section 35 of the Central Excise Act, 1944 and the dismissal of any appeal by the Commissioner (Appeals) on the ground of the appeal having been filed beyond the condonable period of limitation is final. The above appeal No. 360/97 was filed after the period of delay condonable under the proviso to Section 35(1). In the result, appeal No. E/667/2003 is dismissed.
3. Appeal No. 140/2000 filed by the assessee before the Commissioner (Appeals) was delayed only by two days beyond the period of limitation of three months from the date of communication of the relevant Order-in-original. The appeal was very much within the condonable period of three months. Ld. Commissioner (Appeals) did not condone this delay for want of application therefor. After hearing both sides and considering the submissions, we have not been able to find fault with the stand taken by the lower appellate authority. Condonation of delay of any appeal under Section 35 is a quasi-judicial function. The proviso to Sub-section (1) of Section 35 empowered the appellate authority to condone delay of up to three months where it was satisfied that the appellant was prevented by sufficient cause from filing the appeal within the prescribed period of limitation. Such satisfaction of the appellate authority could be recorded only upon sufficient reasons having been shown by the appellant for belated filing of the appeal. The reasons must be part of the record. Thus it is implicit in the above provision that the appellant should make an application for condonation of delay of the appeal, wherein he should state the reasons for the delay. No such application was filed by the appellants before the Commissioner (Appeals) along with appeal No. 140/2000. Hence the dismissal of the appeal as time-barred. The appeal has staled the reason for the delay of two days vide Ground No. 1. Ld. Counsel for the appellants also has explained the delay to our satisfaction. Accordingly, we condone the delay. Appeal No. E/668/2003 filed against the order of the Commissioner (Appeals) in the assessee's appeal No. 140/2000 will be considered on merits. The substantive issue involved in this appeal and the rest of the appeals will be addressed now.
4. The issue is whether the denial of exemption to the assessee in respect of Brush Shaft Fabrication Assembly and Washer is justifiable. In respect of Brush Shaft Assembly, the assessee claimed the benefit of "Nil" rate of duty applicable to "goods (other than Tooth Brush) falling under Heading 96.03 of the CETA Schedule" which were chargeable, unconditionally, to "Nil" rate of duty under the relevant Notifications relating to the various periods of dispute covered by the show cause notices. In the impugned order, the Commissioner (Appeals) upheld the department's view that the classification of the said item had not been finalised and, therefore, till the finalisation of classification, the benefit of "Nil" rate, claimed by the assessee, could not be granted. The assessee has contended that the classification-related ground had not been raised by the department in the show cause notices, and, therefore, the benefit of exemption cannot be denied on the ground stated by the Commissioner (Appeals). Both sides have put forth their respective positions before us. Ld. Counsel has made a further point that the Commissioner (Appeals) ignored two earlier orders passed, in the same assessee's case, by the predecessor - Commissioner (Appeals). Copies of the two Orders-in-Appeal have also been produced by the Counsel and we have perused the same. These are Order-in-Appeal No. 289/01 (CBE) (GVN), dated 23-11-2001 and Order-in-Appeal No. 132/2002 CBE (GVN), dated 28-6-2002 passed by the Commissioner (Appeals), Trichirappalli. The relevant portion of Order-in-Appeal No. 289/01 reads as under :-
"In respect of Brush Shaft Assembly, the lower authority confirmed the same on the ground that a declaration under Rule 173B is required to be filed. When a declaration under 173B has been filed claiming Nil rate of duty for home consumption, there can hardly be any requirement for filing any declaration for claiming exemption for captive consumption. When the product is attracting Nil rate of duty for domestic clearance, it can by no stretch of imagination be said that it would suffer duty when it is captively consumed." (Emphasis added)
4. Ld. Counsel has submitted that the above view expressed in Order-in-Appeal No. 289/2001 as well as in Order-in-Appeal No. 132/2002 has been accepted by the department. It is pointed out that the impugned order itself has acknowledged this fact. Therefore, the Revenue now cannot argue against the above view. This argument of the Counsel has tremendous force. The view expressed by the Commissioner (Appeals) in Orders-in-Appeal No. 289/2001 and 132/02 is now binding on the Revenue. This legal position is supported by a decision of this Tribunal in WPIL Ltd. v. CCE, Calcutta reported in 2003 (153) E.L.T. 565 (T) cited by the ld. Counsel wherein this Tribunal held that, where an order passed by the Commissioner (Appeals) earlier on the same issue in favour of the assessee was not appealed against, it was liable to be followed in the same assessee's subsequent case by the appellate authority unless there was valid reason for taking a view different from the one expressed in the said order. Though, in the present case, the ld. Commissioner (Appeals) noted that the department had accepted the view taken in Orders-in-Appeal Nos. 289/01 and 132/02, he did not follow the same, nor did he attempt to distinguish the case on hand. Upon a perusal of the said Orders-in-Appeal, we find that those orders were passed on sets of facts similar to those of the instant case. There is no reason why those orders should not be followed. In the result, we hold that the appellants are entitled to the benefit of exemption in respect of Brush Shaft Assembly and the demand of duty on the said goods is not sustainable.
5. In respect of Washer, the appellants have claimed SSI exemption under Notification No. 1/93-C.E., dated 28-2-93. This benefit was denied by both the lower authorities. Whereas, the original authority denied the benefit on the sole ground that the appellants had not claimed it in Rule 173B declaration, the Commissioner (Appeals) denied it mainly on a different ground. The lower appellate authority held that the assessee was not eligible for the benefit of SSI exemption in respect of Washer as they were simultaneously availing the benefit of Modvat credit on inputs used in the manufacture of dutiable final products. The authority relied on the Tribunal's decision in CCE v. Metal Pack [2000 (122) E.L.T. 161]. It has been submitted by ld. Counsel that the above ground cited by the lower appellate authority is beyond the scope of the show cause notice and further that the decision relied on by it is not good law. Ld. Counsel has also relied on the Tribunal's decision in Aromate (Cal) Private Ltd. v. CCE, Bolpur [1999 (106) E.L.T. 468 (T)] wherein it was held that it was open to an assessee to avail the benefit of SSI exemption and the benefit of Modvat credit simultaneously in respect of two different final products. It is noticed that, in the cited case, the Tribunal relied on its decision in the case of Faridabad Tools (P) Ltd. [1993 (63) E.L.T. 759] affirmed by the Supreme Court [1996 (82) E.L.T. A149]. Hence Metal Pack (supra) cannot be accepted as good law on the point as rightly submitted by Counsel. We follow Faridabad Tools (supra) and hold that the denial of SSI exemption to the appellants on the ground cited by the lower appellate authority in respect of Washer is unsustainable. The exemption under Notification No. 1/93-C.E. was available to the assessee in respect of the Washers captively used in the manufacture of exempted final product during the relevant period even while they were availing the benefit of Modvat credit in respect of dutiable final products. The demand of duty on the Washers is liable to be set aside.
6. In the result, appeal Nos. E/662 to 666/2003 and E/668 & 669/03 are allowed. The impugned order is set aside to this extent.