Commissioner of C.E., C. and S.T. vs Western Electric and Engineering Co.

Akil Kureshi, J.—In this appeal filed by the Revenue challenging the order of CESTAT dated 6-11-2009 in Appeal No. 3252 of 2000, we had issued Notice for final disposal by our order dated 24-3-2011 making following observations :

Counsel for the Revenue submitted that the High Court had remanded the matter before the Tribunal only with respect to penalty, in view of the decision of the Apex Court in the case of Union of India v. Dharamendra Textile Processors. Upon remand, the Tribunal, by the impugned orders, further remanded the proceedings before the original Adjudicating Authority not only on the question of penalty but on other questions, which the assessee had never challenged.

Considering the submissions made, issue notice for final disposal, returnable on 7th April 2011.

Having heard learned Counsel for the parties, we noticed that undisputedly the Tribunal''s previous order disposing of Appeal No. 3252 of 2000 was carried in appeal before the High Court by the Revenue in Tax Appeal No. 820 of 2005. The High Court by an order dated 18-2-2009 disposed of the appeal in following manner.

Heard the learned counsel appearing for the parties.

In view of the judgment of the Apex Court in the case of Union of India (UOI) and Others Vs. Dharamendra Textile Processors and Others, , the matter is required to be remanded to the Tribunal for fresh consideration and decision in accordance with law. The order of the Tribunal is therefore set aside. The matter is remanded to the Tribunal for fresh consideration and decision in accordance with law. The Tribunal shall decide the issue afresh within a period of three months from the date of receipt of a copy of this order.

The appeal stands disposed of accordingly.

It is also undisputed that pursuant to such remand order of the High Court, the Tribunal by the impugned order dated 6-11-2009 further remanded the proceedings before the adjudicating authority making following observations;

We have considered the submissions. We agree with learned advocate that matter has to be considered afresh as per the direction of the Hon''ble High Court. It is settled law that the officers of the department when acting as adjudicating authorities are required to follow judicial discipline and therefore we find that Commissioner (Appeals) has not dealt with the issue relating to applicability to Section 11AC of Central Excise Act, 1944 properly. Further, we also find that there have been several decisions on the issue of suppression when two show cause notices have been issued. This aspect also has not been dealt with in greater detail. Therefore, both these issues are required to be considered afresh. Another contention put forth by the learned advocate was that cum duty benefit has not been extended. We find that this is also correct. In view of the above submissions we consider that it would be appropriate to remand the matter to the Original Adjudicating Authority who shall consider the issue afresh. We make it clear that Original Adjudicating Authority shall consider the issue of limitation in the light of the fact that two show cause notices have been issued, liability of penalty u/s 11AC of Central Excise Act, 1944 and interest u/s 11AB of Central Excise Act, 1944 in respect of duty, demand relating to the period prior to 21-9-96 and after working out the liability of duty, consider quantum of penalty under Rule 209A on Shri Narendra Buth. We make it clear that the Original Adjudicating Authority shall extend the cum duty benefit while working out the duty demand. We also direct the Original Adjudicating Authority shall also consider whether option of payment of duty, interest and penalty to the extent of 25% of duty within thirty days of the adjudication order is required to be extended or not in accordance with law. Accordingly, appeals are allowed by way of remand.

We find that the Tribunal committed an error in further remanding the proceedings to the adjudicating authority and reopening several issues which were never at large before us. We may recall that against the previous order of the Tribunal, assessee had carried no further appeal to the High Court. Insofar as the assessee is concerned, therefore the Tribunal''s view was final. It was only on the Revenue''s appeal on the issue of reduced penalty that the High Court remanded the proceedings for fresh consideration before the Tribunal.

In that view of the matter, we find that the order of the Tribunal further remanding the proceedings before the adjudicating authority reopening the entire issue needs to be set aside. Ordered accordingly. Resultantly, Appeal No. 3252 of 2000 stands restored to the Tribunal. Tribunal is requested to dispose of the same bearing in mind the observations of the High Court in Tax Appeal No. 820 of 2005 order dated 18-2-2009.