Cce, Pondicherry vs M/S. Arunachalam Sugar Mills Pvt. Ltd

Customs Excise and Service Tax Appellate Tribunal23 March 2015

CitationAppeal No. 15/2005 dated 25.07.2005, passed by the Commissioner of Central Excise (Appeals)

Ratio decidendi

The rule this decision rests on

Where a penalty is linked to the admissibility of a credit that is itself the subject of a pending, related appeal arising from the same common order, the penalty question cannot be decided independently; it must be decided together with, and in consequence of, the determination of eligibility of the credit. Where a final order rejects an appeal on a ground resting on a premise that is contradicted by the record (here, that a related appeal on the eligibility of credit had been decided when it was still pending), the order is vitiated by a mistake apparent on the record and may be recalled under the rectification jurisdiction.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

IN THE CUSTOMS, EXCISE & SERVICE TAXAPPELLATE TRIBUNALSOUTH ZONAL BENCH AT CHENNAIE/ROM/40562/2014 & E/953/2005

(Arising out of Order-in-Appeal No. 15/2005 dated 25.07.2005, passed by the Commissioner of Central Excise (Appeals), Chennai).

For approval and signature

Honble Shri R. PERIASAMI, Technical Member

CCE, Pondicherry : Applicant

Vs.

M/s. Arunachalam Sugar Mills Pvt. Ltd. : Respondent

Appearance

Ms. Indira Sisupal, AC (AR), for the applicant

None for the respondent

CORAM

Honble Shri R. PERIASAMI, Technical Member

Date of Hearing/Decision: 23.03.2015

FINAL ORDER No. 40342 / 2015

Revenue filed application for rectification of mistake against the Tribunals Final Order No. 40677/2013 dated 23.12.2013.

2. None appeared on behalf of the respondent. Ld. AR reiterated the ROM. Revenue pleaded that the Commissioner (Appeals) in his order No.15/2005 dated 25.07.2005 had rejected the Revenue appeal, which was filed against waiver of penalty. Initially the adjudicating authority has disallowed the cenvat credit in Order-in-Original No.02/2004 dated 29.01.2004 and also waived the penalty. Against this order the respondents had filed appeal No. E/953/2005. The Commissioner (Appeals) in his Order-in-Appeal No.66/2004 dated 05.08.2004 had remanded the case to the adjudicating authority with a direction to verify the facts. Against this order, Revenue preferred appeal in No. E/1286/2004.

3. The present revenue appeal E/953/2005 is arising out of OIA No. 15/2005, where the lower appellate authority has rejected the revenue appeal on the penalty. This Tribunal vide Final order rejected the Revenue appeal on the ground that there is no reason to impose penalty when the credit was already allowed by the Commissioner (Appeals) in his earlier order. It is a fact that when the revenue appeal No. E/1286/2004 relating to the eligibility of the credit is still pending before the Tribunal, the Revenue appeal E/953/2005 against the waiver of penalty was rejected by the Tribunal in the present order. Therefore, there is a mistake apparent on record. Accordingly, the Tribunal order dated 23.12.2013 is recalled and ROM is allowed.

4. After allowing the ROM, I take up the appeal itself is for disposal. The AR submits that the Revenue appeal E/1286/2004 has been disposed of subsequently. On perusal of the Tribunals Final Order No. 40239/2014 dated 27.03.2014 I find that the Revenue appeal was allowed by way of remand to the lower authority to verify the eligibility of cenvat credit. Relevant para 3 & 4 of the said order is reproduced as under:-

3. After hearing the learned AR on behalf of Revenue and on perusal of the records, I find that the issue involved is whether the respondent is eligible to avail CENVAT credit on the capital goods on the basis of photocopy of Bill of Entry. The learned AR submits that the Tribunal, in a recent decision, in the case of Hi-Tech Inks P. Ltd. Vs. CCE, Daman 2013 (296) ELT 365 (Tri. Ahmd.) held that credit is not admissible on the basis of photocopy of the Bill of Entry as no efforts were made for acquiring necessary certification from the jurisdictional officer regarding duty paying nature of inputs and the copy of the FIR does not mention loss of concerned documents.

4. In my considered view the adjudicating authority should examine the above case law at the time of verification of the documents as directed by the Commissioner (Appeals) and decide the matter afresh in the denovo adjudication. The appeal filed by the Revenue is disposed of in the above terms.

5. The entire issue of eligibility of credit and waiver of penalty is arising out of one single common order-in-original No. 2/2004 dated 29.01.2004, and two Commissioner (Appeals) orders one dated 5.8.04 another dated 25.7.05. Considering the above facts and this Tribunal has already remanded the case to the adjudicating authority to verify the admissibility of modvat credit, the imposition of penalty is linked to the eligibility of credit. Therefore, it is appropriate that the adjudicating authority while deciding the appeal denovo on the eligibility shall consider the imposition of penalty afresh. Accordingly, the Revenue appeal is allowed and OIA No. 15/05 is set aside and remanded the matter to the adjudicating authority with a direction to decide imposition of penalty on merits. It is needless to say that the adjudicating authority shall give opportunity to the responded before deciding the matter. Appeal is disposed of by way of remand.

(Order pronounced and dictated in the open Court)

(R. PERIASAMI) TECHNICAL MEMBER

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