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TAXAP/695/2009 9/ 9 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No.695 of 2009
For
Approval and Signature:
HONOURABLE
MR.JUSTICE D.A.MEHTA Sd/-
HONOURABLE
MS.JUSTICE H.N.DEVANI
Sd/-
===================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
YES
2
To
be referred to the Reporter or not ?
YES
3
Whether
their Lordships wish to see the fair copy of the judgment ?
NO
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
NO
5
Whether
it is to be circulated to the civil judge ?
NO
===================================================
THE
COMMISSIONER,
CENTRAL
EXCISE AND CUSTOMS VADODARA-II-Appellant(s)
Versus
WELSPUN
GUJARAT STAHL ROHREN LIMITED - Opponent(s)
===================================================
Appearance
:
MR DARSHAN M PARIKH for
Appellant(s) : 1,
None for Opponent(s) :
1,
===================================================
CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HONOURABLE
MS.JUSTICE H.N.DEVANI
Date
: 03/03/2010
ORAL
JUDGMENT
(Per
: HONOURABLE MR.JUSTICE D.A.MEHTA)
Appellant
revenue has proposed following three questions said to arise out of
order dated 11.12.2008 made by Customs, Excise & Service Tax
Appellate Tribunal (Tribunal):
Whether
the CESTAT was correct in law in not upholding the demand by the
Revenue from the assessee when the assessee had in fact recovered
from its buyers in an amount of 8% as excise duty, which in fact was
an amount of 8% required to be paid/reversed from the CENVAT Credit
on inputs already taken since the assessee had not maintained
separate accounts for inputs of exempted/non-exempted goods?
Whether
the CESTAT was correct in allowing the appeal filed by the assessee
without considering the Board’s circular No.599/36/2001 CX. Dated
12.01.2001?
Whether
the CESTAT was correct in passing order in favor of the assessee
despite their failure to maintain separate accounts under Rule 6 of
CENVAT Credit Rules 2002 and without paying 8% amount in terms of
Section 11D?
Heard
learned advocate appearing for the appellant. Various extracts from
the Order-in-Original made by the Adjudicating Authority were read
out emphatically to submit that the Tribunal had committed an error
in law so as to give rise to substantial questions of law as
proposed, or as may be formulated by the Court. It was contended
that in fact respondent assessee had recovered from its customers an
amount of 8% of the invoice value as excise duty which was required
to be paid to the exchequer in terms of Section 11D of the Central
Excise Act, 1944. That the Board Circular dated 12.01.2001 had been
referred to and relied upon by the Adjudicating Authority but was
not considered by the Tribunal. Lastly, it was submitted that the
two orders of Bangalore and New Delhi Benches of Tribunal referred
to in the impugned order were wrongly relied upon by the Tribunal in
the present case because in subsequent orders made by the Delhi
Bench and Chennai Bench of the Tribunal a different view, i.e. a
view in favour of the department, had been adopted. Learned
advocate, therefore, contended that the proposed questions be
formulated as substantial questions of law, after admitting the
appeal.
Section
11D of the Act requires that every person, who is liable to pay duty
under the Act or the Rules made thereunder, and has collected any
amount in excess of the duty assessed or determined, from the buyer
of such goods in any manner as representing duty of excise, shall
forthwith pay the amount so collected to the Central Government.
Hence, in the first instance it has to be found that a person is
liable to pay duty under the Act; secondly, such person has
collected any amount in excess of the duty assessed/determined and
paid on any excisable goods under the Act from the buyer of such
goods; and thirdly, the amount so collected should be representing
the duty of excise. Then such person is duty bound to forthwith pay
the amount so collected to the credit of the Central Government.
In
the facts of the present case the stand of the Revenue has been
stated by the Tribunal as:
.
. . The stand of the Revenue is that the amount has been collected
as excise duty whereas no duty has been paid but only amount
as required under Cenvat Rules. . . .
The
Tribunal has not accepted this stand. In light of this finding it is
not possible to accept the contention on behalf of the appellant
that the amount had been collected as excise duty as per the
findings recorded by the Adjudicating Authority in the
Order-in-Original. If, there is an apparent conflict as to a finding
of fact between two orders it is for the person who is alleging such
conflict to seek a clarification from the superior forum. The High
Court, in exercise of its jurisdiction to determine whether a
substantial question of law arises, cannot be called upon to
undertake an exercise to find facts and record whether finding of
fact recorded by the Adjudicating Authority is correct and discard
the finding recorded by the Tribunal. The only exception being a
case where the order of Tribunal is challenged by specifically
raising a question as to the order suffering from vice of
perversity, urging the same at the time of hearing and establishing
perversity by cogent evidence in support, in light of well settled
parameters in law as to perversity. The Order-in-Original in fact
stands merged in the order of Tribunal and the High Court is only
required to consider whether the order of Tribunal gives rise to a
substantial question of law.
Even
on facts of the present case when the order of Tribunal is read as a
whole it is clear that the stand adopted by Revenue has not found
favour and Tribunal has not accepted that the amount collected by
respondent-assessee was duty of excise which was liable to be paid
to the Central Government under provisions of Section 11D of the
Act.
In
so far as proposed Question No.1 is concerned, the earlier part of
question is suggestive in relation to a finding of fact and hence,
cannot be termed to be a question of law, much less a substantial
question of law.
Similarly,
proposed Question No.2 merely raises an issue as to whether the
Tribunal was justified in allowing appeal filed by the assessee
without considering the circular referred to in the question. There
is nothing on record to suggest that the representative appearing on
behalf of the Revenue before the Tribunal pressed the circular in
service before Tribunal and yet the Tribunal did not consider the
same. Merely because the Adjudicating Authority has referred to the
circular in its order does not necessarily mean that the superior
forum is required to consider everything that is stated in the order
of the Adjudicating Authority. An appellate authority is required to
only decide issues raised before it not only by way of the
memorandum but those that may be urged at the time of hearing. In
the present case Revenue was the respondent in appeal and if any
particular aspect of the matter was required to be urged before
Tribunal the representative of the Revenue was duty bound to point
out the same to the Tribunal, more so when the order made by the
Adjudicating Authority was under challenge.
In
so far as proposed Question No.3 is concerned, there is no
requirement under Rule 6 of the CENVAT Credit Rules, 2002, and no
other provision is pointed out obliging the Tribunal to pass an
order in favour of the Revenue merely because the assessee has
failed to maintain separate accounts. The frame of the questions,
therefore, leaves a lot to be desired. The latter part of the
question is also a suggestive statement of fact in absence of any
finding which would oblige the assessee to discharge any liability
under provisions of Section 11D of the Act.
The
Court also does not find any other question so as to treat the same
as a substantial question of law arising out of impugned order of
Tribunal.
The
appeal is accordingly dismissed.
Sd/-
[D. A.
MEHTA, J]
Sd/-
[
H.N.DEVANI, J]
***
Bhavesh*
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