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TAXAP/27/2008 8/ 8 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 27 of 2008
=====================================================
COMMISSIONER,
CENTRAL EXCISE & CUSTOMS - Appellant(s)
Versus
AMBIKA
INDUSTRIES - Opponent(s)
=====================================================
Appearance :
MR
MTM HAKIM for Appellant(s) : 1,
None for Opponent(s) :
1,
=====================================================
CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HON'BLE
SMT. JUSTICE ABHILASHA KUMARI
Date
: 22/10/2008
ORAL
ORDER
(Per
: HON’BLE SMT. JUSTICE ABHILASHA KUMARI)
1. The
appellant Revenue has challenged the order dated 5.6.2006 passed by
the Customs, Excise & Service Tax Appellate Tribunal, West Zonal
Bench, at Mumbai (the Tribunal) in appeal of respondent assessee and
order dated 5.12.2006 passed by the Tribunal in Rectification of
Mistake Application filed by the appellant revenue, by proposing the
following questions :
[a] Whether
the Tribunal is justified in rendering a finding that the benefit of
deemed credit under the relevant Notification No.6/2002-CE dated
1.3.2002 cannot be denied specially when the assessee concerned
received bleached fabrics in its unit which are ineligible for
benefit under the notification in terms of Explanation-3 thereof
which provides that the notification shall not apply where processed
fabrics itself are used as input for further processing?
[b] Whether
the Tribunal is justified in applying the Notification No.6/2002-CE,
dated 1.3.2002 despite Explanation-3 which stipulates that provisions
of the said notification shall not apply where processed fabrics
itself is used as an input for further processing?
[c] Whether
the Tribunal is justified in recording a finding that the factum of
receipt of grey fabrics by the respondent which was allegedly sent
for job work was not challenged by the revenue despite finding and
evidence to the contrary and despite the respondent having accepted
that they were receiving bleached fabrics?
[d] Whether
the Tribunal was justified in dismissing the rectification of mistake
application filed by the department on the ground that such
application would not be maintainable for re-appreciating the case on
merits and would be maintainable only for correcting the mistake only
of the nature of clerical and arithmetic?
[e] Whether
the Tribunal was justified in remanding the matter to the
adjudicating authority?
2. The
respondent assessee filed claim for availing of deemed credit which
was adjudicated by the adjudicating officer after issuing show cause
notice and decided in favour of respondent assessee. The revenue
challenged the same before the Commissioner (Appeals) and succeeded.
The assessee carried the matter in appeal before the Tribunal. After
hearing the parties, the Tribunal re-produced extract from the show
cause notice issued to the respondent assessee and thereafter,
recorded the following findings :
[3.5] In
the instant case, the noticee had received the grey fabrics, which
exempted from payment of duty (thus credit of duty deemed to have
been paid declared input viz. Yarn, could not be availed), from
merchant exporter. The grey fabrics were being sent directly to the
job worker for process of mercerizing and bleaching. The mercerizing
and bleaching process were carried out without the aid of power,
hence, processed fabrics was exempted from payment of duty, thus
credit of duty deemed to have been paid could not be availed by the
job worker…..
This
would indicate that the appellant had received the grey fabrics and
the same were sent for job work, since this fact has not been
challenged by the Revenue, before the Commissioner (Appeals), we have
to go on the footing that what was received by the processor, who are
the appellants herein, was grey fabrics which was sent out for
bleaching and mercerizing. Therefore, prima facie, we cannot deny
the benefits of deemed credit under the relevant notification as
granted by the Deputy Commissioner. We find that this fact whether
grey fabrics were received or it was mercerized and bleached fabrics
that were received are issues which are being contended before us
since prima facie we find that grey fabrics were admitted and not to
have been challenged, as having been received as were found by the
original authority, we cannot deny the benefit of notification,
however, keeping in mind the other issues raised by the learned
advocate for the appellants, as regards the eligibility, we do not
arrive at any findings thereon since, we are intending to remand
these matters back to the original authority to determine and grant
the credit, if grey fabrics were received by the processors and
thereafter sent for job work of bleaching and mercerizing even
without physical receipts, and bleached and mercerized fabrics were
thereafter received back for further processing. The objection of
cotton fabrics not being mentioned in notification No.214/86 and the
procedure for job working not being intimated and permission taken
are not issues on which the benefits of job work could be denied,
following the decision in the case of M.Tex V/s CCE 2001 (136)
ELT-73, approved by the apex court as reported in 2002 (146) ELT
A-309.
[3] In
this view of the matter, we would set aside the orders in appeal
No.1613-1625 and remand the matter back to the original authority to
redetermine and also arrived at a finding on the other submission
which the appellant may like to raise and thereafter determine the
eligibility to the quantum of Modvat credit eligible and the refund
due in these cases.
3. The
revenue is aggrieved by the observation made by the Tribunal that the
fact that the assessee had received grey fabrics and same were sent
for job work was not challenged by revenue before Commissioner
(Appeals), whereas in fact, according to the revenue, the said fact
had been challenged. The revenue, therefore, preferred a
Rectification of Mistake Application before the Tribunal which came
to be rejected by the Tribunal.
4. The
learned counsel for the appellant revenue has submitted that the
Tribunal has committed an error in remanding the matter after
observing that the revenue had accepted the fact of the assessee
being in receipt of grey fabrics instead of assessee being in receipt
of mercerized and bleached fabrics and therefore, the order of remand
would prove futile as the revenue would not be in a position to
decide the said issue afresh.
5. As
can be seen from the aforesaid extract of the Tribunal’s order, it is
apparent that the Tribunal has merely recorded prima facie opinion,
but at the same time, the Tribunal has also observed after using the
term however , that the matter is remanded back to the original
authority to redetermine. Therefore, it is not possible to state
that, any question of law, as proposed or otherwise, much less a
substantial question of law, arises from the impugned order of the
Tribunal dated 5.6.2006.
6. Insofar
as the second order of the Tribunal is concerned, the Tribunal has
merely stated that, in a Rectification of Mistake Application, the
Tribunal is not entitled to re-appreciate the case on merits and
thus, rejected the application. In relation to this finding, suffice
it to state that the position in law is well settled: The Tribunal is
entitled to correct an apparent error on record. If the Tribunal has
come to a conclusion that no error apparent on record exists, the
High Court cannot determine merely on the basis of an application
moved by the revenue that there is an error apparent on record which
the Tribunal ought to have rectified. There has to be some evidence
beyond an application. Therefore, it is not possible to state that,
any question of law, as proposed or otherwise, much less a
substantial question of law, arises from the impugned order of the
Tribunal dated 5.12.2006.
7. Even
otherwise, as noted hereinbefore, the earlier order of Tribunal dated
5.6.2006 does not operate to the prejudice of any side. Accordingly,
the appeal is dismissed.
(D.A.Mehta,J)
(Smt.Abhilasha Kumari,J)
arg
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