Commissioner - Central Excise and Customs vs Timewell Technics Pvt. Ltd.

Hon''ble S.G. Gokani, J.—This Appeal is preferred by the Revenue, being aggrieved by the order of the Customs, Excise & Service Tax Appellate Tribunal, Ahmedabad ["CESTAT" for short] dated 1st October 2008, raising following substantial questions of law :-

[A] Whether the exemption Notification No. 10/2003-CE dated 01.03.2003 is applicable to the goods exported out of India or otherwise ?"

[B] Whether the Tribunal was right in holding that the Standards of Weights & Measures Act, 1976 cannot be made applicable to the goods exported out of India ?"

[C] Whether in the facts and circumstances of the case and in law the Tribunal is justified in deciding the appeal though the Tribunal was not having jurisdiction ?"

We have heard learned advocates Shri Kalpesh Shastri appearing for the appellant and Ms. Muskan Gogiya for the Opponents. The short question that requires to be addressed by this Court is as to whether the Tribunal has jurisdiction to decide the question which was raised before it, and therefore, instead of addressing the Questions {A} & {B}, Question {C} straightway is being addressed.

It is submitted by learned advocate Shri Shastri that the Tribunal has no jurisdiction to entertain the Appeal, considering the provision of proviso (b) to Section 35B [1] of the Central Excise Act, 1944 [hereinafter referred to as, "the Act"]. He also urged further that the Tribunal ought not to have decided the issues on merit, when the issue of jurisdiction was at large before it. He, therefore, urged the Court to intervene in setting aside the impugned order.

Learned counsel for the opponent has urged that this Court does not have jurisdiction for the reason that the question concerns payment of rate of duty in respect of the export goods in terms of the Notification dated 1st March 2003. She also relied upon a decision of this Court rendered in case of Commissioner of Central Excise v. JBF Industries Limited, where considering the provisions of Section 35G read with Section 35L of the Act, this Court has held that when there is a question of applicability of a notification or a circular, which has a bearing on the determination of the rate of duty which has a direct and proximate relationship to the rate of duty and to the value of goods for the purpose of assessment, this Court would have no jurisdiction to entertain the appeal.

On having considered the submissions of both the sides and on perusal of the record, it appears that the Tribunal vide its Order dated 21st June 2005; in absence of the present Opponent, heard the Department and it was pointed out to the Tribunal that the question pertains to rebate under the Central Excise Rules, and therefore, it would have no jurisdiction to entertain the appeal and it accordingly so held. However later on an application for restoration of appeal was made before it and the Tribunal vide its order dated 4th April 2006 heard both the sides and held that the dispute relates to payment of full rate of duty i.e., 16% in respect of the export goods whereas, the appellants were paying concessional rate of duty i.e., @ 8% in terms of the Notification No. 10/03-CE dated 1st March 2003 in respect of the goods cleared for home consumption. At that stage also, it was urged before the Tribunal that question of rebate was consequential to the finalization of issue of duty, as is being contended by the opponent here. And, the Tribunal agreed to such submission and held that the basic dispute relates to the valuation of the goods, and accordingly it had recalled its order.

It appears that thereafter, the Tribunal decided entire issue on merit and order impugned has been passed on 1st October 2008.

In the order impugned, the aspect of jurisdiction is not being touched and one of the submissions before us was also that no challenge was made to the order of recall passed on dated 4th April 2006, and therefore also, at such belated stage, such challenge to the jurisdiction should not have been entertained.

We are of the considered view that the said contention merits no consideration for the following reasons.

It appears that from the beginning, the stand of the Department had been that the Tribunal does not have jurisdiction for this case falls essentially under proviso (b) to Section 35B [1] of the Act and that stand had also been upheld by the Tribunal when it chose to dismiss the appeal ex parte on 21st June 2005 and later on, when the present opponents made a request for restoration, it had recalled its earlier order and later on decided the matter on merit against the Department. And therefore, both the orders would have an effect of merging and even if there is no separate challenge made by the Revenue, that may not deprive the Department from raising such an issue at this stage with this effect.

It would be profitable to reproduce at this stage, proviso (b) to Section 35B of the Act.

35.B Appeals to the Appellate Tribunal-[1] Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order-

(a) a decision or order passed by the Commissioner of Central Excise as an adjudicating authority;

(b) an order passed by the Commissioner (Appeals) u/s 35-A;

(c) an order passed by the Central Board of Excise & Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) (hereinafter in this Chapter referred to as the Board) or the Appellate Commissioner of Central Excise u/s 35, as it stood immediately before the appointed day;

(d) an order passed by the Board or the Commissioner of Central Excise, either before or after the appointed day, u/s 35-A, as it stood immediately before that day :

Provided that no appeal shall lie to the Appellate Tribunal and the Appellate Tribunal shall not have jurisdiction to decide any appeal in respect of any order referred to in clause (b) if such order relates to-

(a) xx xx xx xx

(b) a rebate of duty of excise on goods, exported to any country or territory outside India or on excisable materials used in the manufacture of goods which are exported to any country or territory outside India.

On examination of the material clearly it appears essentially a question of refund of rebate and not of the duty as sought to be argued.

We are of the firm opinion that this issue since pertains to rebate, the Tribunal had no jurisdiction, and therefore, we answer Question {C} in favour of the Department. And therefore, in absence of jurisdiction, its order on merit consequently shall also fall. Thus, Appellant succeeds in this appeal. However, this will not affect the chance of the opponent to approach appropriate authorities prescribed under the law for the claim of the refund of rebate which shall decide the question in accordance with law without being influenced by any of the observations made hereinabove. Tax Appeal accordingly stands disposed of. Notice stands discharged with no order as to costs.