Commissioner of Central Excise vs Mahindra and Mahindra Ltd.

This appeal is directed against the order passed by the Tribunal disposing of finally the appeal at the stage of considering and deciding an application for stay/waiver of pre-deposit. By the impugned order delivered on 22-2-2012 the Member (Judicial) and the Member (Technical) of the Tribunal disposed of finally the appeal preferred by the respondent. The respondent had challenged the Order-in-Original and that was dated 31-3-2011. That order was passed by the Commissioner of Central Excise, Mumbai-V, confirming the demand of duty. A show cause notice was issued calling upon the appellant to show cause as to why the benefit which has been availed of and namely a Cenvat credit attributable to input services used in or in relation to the manufacture of exempted goods, should not be recovered. It is stated that an amount to the extent of Rs. 67,92,731/- was to be recovered under the provisions of Section 11A(1) of the Central Excise Act, 1944 read with Rule 14 of the Cenvat Credit Rules, 2004, and why interest and also penalty should not be recovered. The respondent-assessee replied to the show cause notice and while denying the allegations disputed the demand. The Adjudicating Authority, thereafter, heard both the sides and by the order referred to above viz. Order-in-Original dated 31-3-2011 confirmed the demand.

The aggrieved Assessee filed an appeal before the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench, Mumbai and applied for stay. At the hearing of stay application, attention of the Members of the Tribunal was invited to a judgment of this Court and which was stated to be covering the case squarely. That was the ground on which the assessee prayed for unconditional stay. The appellant before us never agreed to the appeal being decided finally. The Tribunal noted this objection, but without setting out the facts and allegations in the show cause notice, the reply of the respondent-assessee, the stand of the department and the Order-in-Original in detail, proceeded to quash and set aside the impugned order of the Adjudicating Authority. There are no reasons assigned save and except observing that the issue is covered by the judgment of this Court. At best this was enough for disposal of the application for stay. Further, the observations could be at the most holding that there is a strong prima facie case made out by the Assessee, the balance of convenience is also in favour of the Assessee and hence, this is a fit matter for waiving the requirement of pre-deposit in its entirety. However, we find that the appeal could not have been disposed of by such a short order. The matter concerns interpretation of some rule. If that interpretation accords with the view taken by this Court and sought to be cited by the Tribunal, then, that is something which has to be gone into and decided in depth. By merely referring to that judgment of this Court, the issue cannot be said to be covered. This is one more case where we have an occasion to comment and adversely on unsatisfactory disposal of the appeal by the Customs Excise and Service Tax Appellate Tribunal. The Judicial Tribunal has been set up in order to decide not only the appeals against the Order-in-Original but even against the first Appellate Authority. Such a Tribunal is expected to apply its mind Judiciously, independently and impartially. The Tribunal is expected to act as a final fact finding Authority. It is, therefore, required to meticulously go into the versions, the documents produced and thereafter render its conclusion and final opinion, and that is to be rendered by dealing with the rival contentions and the case laws on it. If this is how the Judicial Authority is expected to decide the matter and in accordance with law then the present order falls short of the required standard. This itself gives rise to substantial questions of law and namely, whether in the facts and circumstances and in law the CESTAT was justified in disposing off the Appeal of the assessee finally at the stage of considering an application for Stay/waiver of pre-deposit.

Once the appeal has been disposed of in the manner noted above and without the consent of both sides, then, we are proceed to admit this appeal. Since we have found that the Appellant-Revenue has suffered serious prejudice on account of such dismissal of the appeal by a Judicial Tribunal then interest of justice would be served if we set aside the impugned order to the extent it disposes of the appeal finally. We, therefore, dispose of the present appeal by clarifying that the impugned order shall stand confined and restricted to the disposal of the application for stay, and that it would not dispose of the appeal finally. The appeal would now be placed for hearing and final disposal on merits and in accordance with law. We keep open the rival contentions. We are clarifying further that the Tribunal should dispose of the appeal uninfluenced by its tentative and prima facie observations.

We have noted that after admission of such an appeal by this Court it need not be kept pending on our file, that would only amount to delaying the proceedings further. If after final hearing of this appeal, we are required to pass an order of remand then it is desirable that it has to be passed expeditiously and at this stage itself.

In the above circumstances, we restore the appeal on the file of the Tribunal for disposal on merits and in accordance with law. The order passed on 22-2-2012 shall only dispose of the stay application. This Tribunal was justified in waiving the requirement of pre-deposit because a strong prima facie case has been made out by the respondent-assessee and the balance of convenience was also in its favour, hence, order to the extent it waives condition of pre-deposit does not require interference in the appellate jurisdiction of this Court. It does not raise any substantial question of law and to that extent. The appeal-is disposed of in the above terms. No costs.