Cce vs Matrix Clothing Pvt. Ltd. And … on 28 November, 2007

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Customs, Excise and Gold Tribunal – Delhi
Cce vs Matrix Clothing Pvt. Ltd. And … on 28 November, 2007
Equivalent citations: 2008 (126) ECC 30, 2008 (152) ECR 30 Tri Delhi, 2008 (224) ELT 599 Tri Del
Bench: S Kang, Vice, S T T.V.


ORDER

S.S. Kang, Vice President

1. Common issue is involved in these appeals. Therefore, they are being taken up together for disposal.

2. The revenue filed these appeals against the impugned order whereby the Commissioner (Appeals) has remanded the matter to the adjudicating authority. The contention of the revenue is that after amendment of the proviso to Section 35-A of Central Excise Act w.e.f. 11.5.2001, the power of remand of Commissioner (Appeals) has been withdrawn. Therefore, the impugned order is not sustainable.

3. The revenue relied upon the decision of the Hon’ble Supreme Court in the case of Mil India Ltd v. CCE Noida reported in 2007 (79) RLT 1(SC) and decision dated 8.3.2007 of the Hon’ble High Court of Punjab & Haryana in the case of CCE Amritsar v. Enkay (India) Ruber Co Pvt Ltd. The contention of revenue is that Hon’ble Punjab & Haryana High Court in the case of Enkay (India) Rubber Co Pvt Ltd supra after taking into consideration the amended provisions of Central Excise Act, held that the Commissioner (Appeals) after 11.5.2001, has no power to remand. The ratio of the above decision is fully applicable on the facts of the case.

4. The respondents submitted that if after the amendment the Commissioner (Appeals) has power to pass such order as it deemed fit, modify the decision which also includes power to remand.

5. We find that the Hon’ble Supreme Court in the case of Mil India Ltd v. CCE Noida has held as under:

In our view, the High court had erred in holding that the Tribunal could not have examined the question of dutiability, once on merits, the order of the Commissioner (Appeals) dated 22.3.2000 became final. Firstly, one must understand that excisability is a matter of principle. The Tribunal is the highest authority in hierarchy to decide on facts whether the bought out items were dutiable or not. The Tribunal was not bound by the decision of the Commissioner (Appeals) on the question of durability or excisability. By order dated 22.3.2000, the Commissioner (Appeals) had remanded the matter to the adjudicating authority the question of quantification. Therefore, it was open to the appellant to appear before the adjudicating authority and submit contentions on quantification of duty liability. In the present matter in the second round, the appellant appeared before the adjudicating authority and pointed out in the alternative that the duty demanded from the appellants at the rate of Rs. 94,03,5000/- was erroneous as the appellants were entitled to the benefit of modvat credit. From this it cannot be said that the question of excisability or dutiability had become final. The conclusion of the Commissioner (Appeals) in his order dated 22.3.2000 was not binding on the Tribunal. Further one needs to understand the concept of assessment. An order of assessment under the taxing law does not become final before the adjudicating authority in every matter. It is subject to appeal before the Commissioner (Appeals). The Commissioner (Appeals) can even add or subtract certain items from the order of assessment made by the adjudicating authority and that order of the Commissioner (Appeals) could also be treated as an order of assessment. In complicated cases where costing is involved in the adjudicating authority can also refer the matter to an expert. The Act also makes provision for special audit. However, when the principle of law is evolved an appeal lies to the appellate Tribunal under the said Act. In fact, the power of remand by the Commissioner (Appeals) has been taken away by amending Section 35A with effect from 11.5.2001 under the Finance Bill, 2001. Under the notes to Clause 122 of the said Bill, it is stated that Clause 122 seeks to amend Section 35Aa so as to withdraw the powers of the Commissioner (Appeals) to remand matters back to the adjudicating authority for fresh consideration. Therefore, the Commissioner (Appeals) continues to exercise the powers of the adjudicating authority in the matters of assessment. Under Section 35-B any person aggrieved by the order of the Commissioner as an adjudicating authority is entitled to move the Tribunal in appeal. Section 35-B indicates that the decision of order passed by the Commissioner (Appeals) shall be treated as an order of an adjudicating authority. In the circumstances the high Court had erred in holding that the assessee was not entitled to agitate the question of durability in appeal before the Tribunal.

6. Further we find that the Hon’ble Punjab & Haryana High Court under whose jurisdiction the respondents are situated, in the case of Enkay India rubber Co. (supra) held that after amendment to Section 35-A, the Commissioner has no power to remand. In these circumstances, the impugned orders are set aside and the Commissioner (Appeals) is directed to decide the appeals on merits in accordance with law. The appeals are allowed as indicated above.

(Order dictated and pronounced in the open Court).

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