M/S SANJAY ALLOYS PVT LTD V. COMMISSIONER OF CENTRAL EXCISE

CEA/67/2017

AI Insights

The case involves M/s. Sanjay Alloys Pvt. Ltd., the appellant, who filed an appeal against the order of the Customs, Excise & Service Tax Appellate Tribunal, which had dismissed their appeal regarding the calculation of excise duty based on production capacity rather than actual production. The appellant argued that the Tribunal's decision was perverse and that the Tribunal had not addressed their contentions adequately. The respondent, Commissioner of Central Excise Bangalore II, supported the Tribunal's decision, citing a precedent that favored the Revenue. The High Court found that the Tribunal had not adequately reasoned its decision or applied the cited precedent to the specifics of the case, leading to the quashing of the Tribunal's order and a directive for a re-evaluation of the case.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 726765 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 04-03-2021
• Assessment Year: misc
• Other Referred Cases: CCE Chandigarh Vs. Doaba Steel Rolling Mills 2011 (269) ELT 298 (SC)
• Laws Referred To: Central Excise Act, 1944
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: VIKRAM HUILGOL
• Assessee Lawyers: RAGHURAMAN
• Keywords: Central Excise Appeal; Cryptic order; Non application of mind; Refund claim; Manufacture of hot re-rolled steel products
• Section: 3A; 96ZP; 35G

Judgement Text

"IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF MARCH 2021 PRESENT THE HON'BLE MR. JUSTICE ALOK ARADHE AND THE HON'BLE MR. JUSTICE ASHOK S. KINAGI C.E.A. NO.67 OF 2017 BETWEEN: M/S. SANJAY ALLOYS PVT. LTD., (PRESENTLY HAVING ADDRESS AT) No.77, B. OSMAN KHAN ROAD (OPP. MY SUGAR BUILDING) TOWN HALL CIRCLE BENGALURU - 560 002. …APPELLANT (BY SRI. RAGHURAMAN, ADVOCATE) AND: COMMISSIONER OF CENTRAL EXCISE BANGALORE II COMMISSIONERATE CENTRAL REVENUE BUILDINGS P.B. No.5400, QUEENS ROAD BENGALURU-560 001. …RESPONDENT (BY SRI. VIKRAM A HULIGOL, ADVOCATE) THIS CENTRAL EXCISE APPEAL IS FILED UNDER SECTION 35G OF THE CENTRAL EXCISE ACT, ARISING OUT OF ORDER 2 DATED 27.06.2017 PASSED IN FINAL ORDER No.20963 OF 2017, PRAYING TO (a) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE; (b) ALLOW THE APPEAL AND SET ASIDE THE ORDER OF THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL BEARING No.20963 OF 2017 DATED 27.06.2017; (c) PASS SUCH OTHER SUITABLE ORDERS INCLUDING ORDR AS TO COSTS AS THIS HONORABLE COURT MAY DEEM FIT TO GRANT IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE AND EQUITY. THIS CENTRAL EXCISE APPEAL COMING ON FOR HEARING THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT Mr. Raghuraman V., learned counsel learned counsel for the appellant. Mr. Vikram A. Huilgol, learned counsel for the respondent. 2. This appeal has been filed under Section 35G of the Central Excise Act, 1944 (hereinafter referred to as ‘the Act’, for short) by the appellant against the order dated 27.06.2017 passed by the Customs, Excise & Service Tax Appellate Tribunal, Bengaluru (hereinafter referred to as 'the Tribunal' for short). The appeal was admitted by a Bench of 3 this Court vide order dated 04.10.2018 on the following substantial questions of law: a) Whether the order of the Income Tax Appellate Tribunal passed without dealing with any of the submissions made by the appellant is perverse in law? b) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in relying on the decision in the case of CCE Chandigarh Vs. Doaba Steel Rolling Mills 2011 (269) ELT 298 (SC)? c) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in dismissing the appeal of the appellant thereby holding that the provisions of the Rule 96ZP of Central Excise Act, 1944 override the provisions of Section 3A of the Central Excise Act, 1944 ? 2. Facts giving rise to filing of this appeal briefly stated are that the appellant is engaged in manufacture of hot re- rolled steel products which are covered under CSH 72 as well as under Section 3A of the Central Excise Act, 1944, for payment of central excise duty on the basis of the capacity of annual production determined by the Commissioner in terms of Hot Re-rolling Steel Mills Annual Capacity 4 Determination Rules, 1997, which was in force from 01.08.1997. On account of non-availability of electricity, the appellant could not work their manufacturing unit between the period from 01.09.1997 to 02.10.1997. Under the above Rules, the Commissioner of Central Excise, Mangalore-II, Commissionerate, fixed the annual capacity of production at 6616.08 MT per annum for the year 1997-98 and fixed a quantity of 3859.38 MT for the period from 01.09.1997 to 31.03.1998 and the duty liability at the rate of Rs.300.00 per MT which was assessed at Rs.1,65,402.00 per month. It is the case of the appellant that they could work their unit from 01.09.1997 to 02.10.1997 and during the aforesaid period only a quantity of 149.989 MT of re- rolling steel products were produced and the unit was closed with effect from 03.10.1997. The appellant initially deposited a sum of Rs.1,85,000.00 for the period for which the unit was functional in terms of determination fixed by the 5 Commissioner. However, in view of the decision of the Supreme Court in Civil Appeal Nos.52-54, 56-58, 60-61 and 63 of 1998 and the decision of the Tribunal dated 30.07.2002 in the case of the assessee, the assessee filed a claim for refund of Rs.1,36,554.50 being the duty paid in excess on the ground that the assessee was liable to pay duty based on actual production instead of in terms of the actual capacity determined by the Commissioner. The adjudicating Authority by an order dated 27.12.2002 sanctioned the refund of Rs.1,36,555.00. 3. Being aggrieved by the order passed by the adjudicating Authority, the Revenue preferred an appeal before the Commissioner (Appeals), inter alia on the ground that the adjudicating Authority has wrongly interpreted the judgment of Hon'ble Supreme Court and had given relief to the assessee. The Commissioner (Appeals), by order dated 12.07.2004, allowed the appeal filed by the Revenue. Thereupon, the appellant filed an appeal before the Tribunal. 6 The Tribunal, by order dated 27.06.2017, has dismissed the appeal by placing reliance on the decision of the Hon'ble Apex Court in COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH VS. DOABA STEEL ROLLING MILLS [2011 (269) ELT 298 (SC)] held that the issue is squarely covered in favour of the Revenue by the aforesaid decision. In the result, the appeal was dismissed. Aggrieved by the said order, the assessee filed a review petition before the Supreme Court which was also dismissed. In the aforesaid factual background, this appeal has been filed. 4. Learned counsel for the appellant submitted that the order passed by the Tribunal suffers from the vice of non-application of mind inasmuch as no reasons worth accepting have been assigned by the Tribunal. It is further submitted that the impugned order is cryptic and the contentions raised by the appellant before the Tribunal have not been addressed. 7 5. On the other hand, learned Senior counsel for the respondent submits that the Tribunal has rightly placed reliance on the decision of the High Court of Madras in the fact situation of the case which squarely covers the issue against the assessee. It is further submitted that no case for interference in this appeal is made out. 6. We have considered the submissions made by both sides and it well settled in law that even quasi-judicial authority, while exercising its statutory powers, has to assign reasons and based on the reasons assigned by it, has to record the findings. In other words, the Tribunal exercising the statutory power under the Act is required to apply its mind and record the findings. In any case, if the Tribunal relies on a particular decision, it is duty bound to examine, by assigning reasons, as to how the ratio of the aforesaid decision applies to the fact situation of the case. At this stage, we deem it appropriate to reproduce para-6 of the order passed by the Tribunal: 8 \"6. After hearing both sides and perusal of the judgment of Hon'ble Supreme Court, I am of the view that the issue is squarely covered in favour of the Revenue by the decision of Hon'ble Supreme Court cited supra. By respectfully following the said decision of the apex court, I am of the view that there is no infirmity in the impugned order and the same is upheld by dismissing the appeal of the appellant.\" 7. On perusal of the aforesaid paragraph, it is evident that the Tribunal has merely relied on the judgment of the Hon'ble Supreme Court in the case of DOABA STEEL ROLLING MILLS (supra) and has not even assigned any reason as to how the aforesaid decision applies to the fact situation of the case. Thus, we find that the order passed by the Tribunal is cryptic and suffers from the vice of non-application of mind. We, therefore, in the fact situation of the case, are inclined to quash the order dated 27.06.2017 passed by the Tribunal and to remit the matter to the Tribunal for fresh adjudication after considering the submissions made at the Bar and to 9 decide the matter by a speaking order. The Tribunal shall make an endeavour to decide the appeal within 3 months from the date of receipt of copy of this order. Needless to state that all contentions which are permissible to be raised in law, are kept open. Accordingly appeal is disposed of. SD/- JUDGE SD/- JUDGE RD "