Madras High Court
The Commissioner Of Central Excise vs Vadapalani Press on 21 November, 2014
Bench: R.Sudhakar, R.Karuppiah
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 21.11.2014
CORAM
THE HON'BLE MR.JUSTICE R.SUDHAKAR
AND
THE HON'BLE MR.JUSTICE R.KARUPPIAH
C.M.A.No.2424 of 2007
The Commissioner of Central Excise
Chennai II Commissionerate
692, MHU Complex, Anna Salai
Nandanam, Chennai 600 035. .. Appellant
Vs.
1. Vadapalani Press
A-4, 1st Main Road
Ambattur Industrial Estate
Ambattur, Chennai 600 058.
2. Customs, Excise and Service Tax Appellate Tribunal
Southern Zonal Bench, Sasthri Bhavan Annexe
No.26, Haddows Road, Chennai 600 006. .. Respondents
Prayer: Appeal against the Final Order No.101 of 2007, dated 31.1.2007 passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Chennai.
For Appellant : Mr.K.Mohanamurali
Standing Counsel
For Respondents : Mr.Raghavan Ramabadran
for M/s.Lakshmikumaran
for 1st respondent
J U D G M E N T
(Delivered by R.SUDHAKAR,J.) This appeal is filed by the Department challenging the Final Order No.101 of 2007, dated 31.1.2007 passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Chennai, by raising the following questions of law:
(a) Whether the benefit of Central Board of Excise and Customs Circular No.212/46/95-CX, dated 20.5.1996 is available to the first respondent under the context (goods not exported by Merchant Exporters, goods not exported from the Unit and goods used in the packing of other products which might have been exported) and strict compliance of its subsequent circular No.648/39/2002-CX.6, dated 25.7.2002?
(b) Whether the conditions and procedures prescribed under Notification No.43/2001 CE (NT), dated 26.6.2001 can be altogether ignored and benefit extended to the first respondent?
2.1. The first respondent is engaged in the manufacture of printed cartons and they availed the 'Small Scale Industries' exemption under Notification No.8/2002-CE, dated 1.3.2002, which exempts goods cleared for home consumption from payment of duty up to aggregate value of Rs.1 Crore.
2.2. It is the case of the department that the said Notification dated 1.3.2002 does not apply to the transaction in question and accordingly, they issued a show cause notice on 19.4.2005 proposing to deny the exemption granted under notification dated 1.3.2002. The first respondent submitted their reply on 8.9.2005. The Commissioner of Central Excise, by order dated 26.9.2005, confirmed the demand of duty as proposed in the show cause notice and imposed penalty and interest.
2.3. The first respondent preferred an appeal to the Tribunal. The Tribunal, on an interpretation of the said Notification dated 1.3.2002, allowed the appeal filed by the first respondent with a direction to the Commissioner of Central Excise to verify the particulars of export to see whether the goods supplied under Form 'H' were exported and pass fresh orders.
2.4. Aggrieved by the said order, the department has filed the present appeal on the questions of law, referred supra.
3. We have heard the learned Standing Counsel for the department and the learned counsel for the first respondent and perused the order passed by the Tribunal and other documents.
4. At the outset, the learned counsel for the first respondent objected to the maintainability of the appeal before this Court on the above questions of law raised by the department. It is the plea of the learned counsel for the first respondent that Section 35G of the Central Excise Act, 1944 provides that an appeal on the issue relating to rate of duty of excise or value of goods for purposes of assessment would not lie before this Court. He placed strong reliance on the decision of the Supreme Court in Navin Chemicals Manufacturing and Trading Co. Ltd. v. Collector of Customs, 1993 (68) ELT 3 (SC), wherein it is held as under:
11. It will be seen that sub-section (5) uses the said expression determination of any question having a relation to the rate of duty or to the value of goods for the purposes of assessment and the Explanation thereto provides a definition of it for the purposes of this sub-section. The Explanation says that the expression includes the determination of a question relating to the rate of duty; to the valuation of goods for purposes of assessment; to the classification of goods under the Tariff and whether or not they are covered by an exemption notification; and whether the value of goods for purposes of assessment should be enhanced or reduced having regard to certain matters that the said Act provides for. Although this Explanation expressly confines the definition of the said expression to sub-section (5) of Section 129-D, it is proper that the said expression used in the other parts of the said Act should be interpreted similarly. The statutory definition accords with the meaning we have given to the said expression above. Questions relating to the rate of duty and to the value of goods for purposes of assessment are questions that squarely fall within the meaning of the said expression. A dispute as to the classification of goods and as to whether or not they are covered by an exemption notification relates directly and proximately to the rate of duty applicable thereto for purposes of assessment. Whether the value of goods for purposes of assessment is required to be increased or decreased is a question that relates directly and proximately to the value of goods for purposes of assessment. The statutory definition of the said expression indicates that it has to be read to limit its application to cases where, for the purposes of assessment, questions arise directly and proximately as to the rate of duty or the value of the goods.
12. This, then, is the test for the purposes of determining whether or not an appeal should be heard by a Special Bench of CEGAT, whether or not a reference by CEGAT lies to the High Court and whether or not an appeal lies directly to the Supreme Court from a decision of CEGAT: does the question that requires determination have a direct and proximate relation, for the purposes of assessment, to the rate of duty applicable to the goods or to the value of the goods. (emphasis supplied)
5. The present appeal is filed under Section 35G of the Central Excise Act, 1944 and it is apposite to refer to Section 35G(1) of the Central Excise Act, 1944, which reads as under:
Section 35G. Appeal to High Court.(1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment), if the High Court is satisfied that the case involves a substantial question of law. (emphasis supplied)
6. In the present case, the issue that arises for consideration is what will be the rate of duty that is payable by the first respondent, but for the notification in question. Therefore, the objection of the learned counsel for the first respondent is sustained.
7. The above said view of this Court is fortified by a decision of the Gujarat High Court in Commissioner of Central Excise v. JBF Industries Ltd., 2011 (264) ELT 162 (Guj.), wherein it is held as under:
10. In the light of the aforesaid judicial pronouncements, it is apparent that the question as to the applicability of a notification or a circular which has a bearing on the determination of the rate of duty is a question which has a direct and proximate relationship to the rate of duty and to the value of goods for purposes of assessment. In the circumstances, the present appeal which relates to the applicability of the above referred circular, relates directly to the determination of rate of duty for the purpose of assessment and as such, in the light of the provisions of Section 35G read with Section 35L of the Act, this Court has no jurisdiction to entertain the appeal. (emphasis supplied) For the foregoing reasons, we hold that this appeal is not maintainable and accordingly, the same is dismissed. Since the appeal is held not maintainable, we do not propose to go into the merits of the questions of law raised for consideration. No costs.
(R.S.J.) (R.K.J.)
21.11.2014
Index : Yes
Internet : Yes
sasi
To:
The Assistant Registrar
Customs, Excise and Service Tax Appellate Tribunal
South Zone Bench, Sasthri Bhavan Avenue
1st Floor, Haddows Road, Chennai 600 006.
R.SUDHAKAR,J.
and
R.KARUPPIAH,J.
(sasi)
C.M.A.No.2424 of 2007
21.11.2014